By: Eugene Robinson, Opinion Writer, The Washington Post, January 26, 2012
“Larger Deficits, More Inequality”: The House Republicans’ Head Scratching Economics
Whether you worry about the sluggish recovery, budget deficits, or widening inequality, you should be scratching your head at what the House of Representatives is up to this week.
On the one hand, the House will likely pass the small business tax cut sponsored by House Majority Leader Eric Cantor, which adds $46 billion to the deficit, largely benefits very high-income taxpayers, and has little potential for creating jobs. On the other hand, the House Agriculture Committee has approved a proposal, as part of its deficit reduction mandate, to cut $36 billion from the Supplemental Nutrition Assistance Program—formerly food stamps—a program that goes mainly to low-income households and is one of the best policies we have for creating jobs in a weak economy.
In Tuesday’s post on the New York Times Economix blog, Bruce Bartlett, who held senior policy roles in the Reagan and George H.W. Bush administrations and served on the staffs of Reps. Jack Kemp and Ron Paul, asks the question, “Do small businesses create jobs?” He appropriately cites the research showing that politicians’ worship of small businesses as jobs creators is misguided, and that it is start-up firms, not small firms per se, that are the job creators. Moreover, many of those who would benefit from the tax cut are affluent doctors, lawyers, and stockbrokers—hardly the local mom and pop store that most people imagine when they hear the phrase “small business.”
Bartlett is scathing on the Cantor bill:
There may be policies that would increase the number of business start-ups and aid employment this way. But an across-the-board tax cut for every small business, defined only in terms of employment, is nothing but …[a] giveaway unlikely to create any jobs whatsoever.
Bartlett’s indictment is backed up by standard “multiplier” or “bang-for-the-buck” analyses from the Congressional Budget Office and private analysts like Mark Zandi, chief economist of Moody’s Analytics. In contrast to an increase in SNAP benefits, which they find to be among the most cost-effective measures for stimulating economic growth and job creation in a weak economy, both the Congressional Budget Office and Zandi find business tax cuts similar to the Cantor bill to be among the least effective. The economic growth and job creation impact per dollar of nutritional assistance spending is six to eight times larger than that of an across-the-board tax cut.
Here is what the House is doing with these two measures: It is adding $46 billion of tax cuts, nearly half of which will go to those making more than $1 million, to the budget deficit. According to the official Joint Committee on Taxation estimate, about $45 billion of it will be received in 2012-13, when the economy could in fact use a boost to jobs. At the same time, any stimulus from the tax cut will be wiped out by the $8 billion of the $36 billion SNAP cut that also would occur in 2012-13.
The bottom line on these actions is that they produce larger budget deficits, more inequality, and no net new jobs. So when I see the House moving in exactly the opposite direction of what is fair and makes economic sense, I’m inclined to ask: “Is it really more politically appealing to cut taxes for millionaires and increase the budget deficit than to maintain food benefits for the poor that also give an extra boost to the economic recovery?”
By: Chad Stone, Chief Economist at the Center on Budget and Policy Priorities, Washington Whispers, U. S. News and World Report, April 19, 2012
“Eric’s Zombie Lie”: Cantor Says It’s Time To Tax The Poor
House Majority Leader Eric Cantor justifies his latest big tax break for millionaires by dragging out an old, big lie.
CANTOR: We also know that over 45 percent of the people in this country don’t pay income taxes at all, and we have to question whether that’s fair. And should we broaden the base in a way that we can lower the rates for everybody that pays taxes. […]
KARL: Just wondering, what do you do about that? Are you saying we need to have a tax increase on the 45 percent who right now pay no federal income tax?
CANTOR: I’m saying that, just in a macro way of looking at it, you’ve got to discuss that issue. […] I’ve never believed that you go raise taxes on those that have been successful that are paying in, taking away from them, so that you just hand out and give to someone else.
Let’s just do this again, debunk that zombie lie. The more than 45 percent of people who “don’t pay income taxes” don’t pay federal income tax because they’re too poor!They pay federal payroll taxes. They pay sales taxes in most states. They pay a larger share of their income in taxes than rich people do. And they are students, and disabled people, and the elderly who don’t have income.
And you know who doesn’t pay income tax? Two dozen Fortune 500 companies that avoided corporate income taxes altogether in 2011.
And Eric Cantor says that we need to take even more money away from poor Americans and give it directly to “those that have been successful.” That’s the Republican version of redistribution of wealth.
10:57 AM PT: The Cantor NASCAR/NFL owners tax break just passed, 235-173. Ten Republicans voted no, one voted present, and 10 Democrats voted for it.
By: Joan McCarter, Daily Kos, April 19, 2012
“Greed Is Good?”: The GOP Seems To Be Okay With That
If you heard a loud “gulp” Tuesday night after President Obama’s State of the Union address, it probably came from Republican political strategists as they realized their party’s odds of capturing the White House this fall are getting longer. Obama may be no Ronald Reagan, but he’s no Jimmy Carter, either.
The obligatory list of accomplishments and initiatives was embellished with bits and pieces of what will likely be Obama’s standard campaign speech. At the heart of his argument for a second term is his assertion that the American dream of upward mobility has been hijacked — that the rich and the powerful have rigged our economic and political systems to favor their interests over those of the average citizen.
Obama sounded this theme several times, perhaps most effectively when he decried policies that allow billionaire Warren Buffett to pay a lower income-tax rate than does his longtime secretary, Debbie Bosanek, who sat with first lady Michelle Obama in her box Tuesday night:
“We don’t begrudge financial success in this country. We admire it. When Americans talk about folks like me paying my fair share of taxes, it’s not because they envy the rich. It’s because they understand that when I get a tax break I don’t need and the country can’t afford, it either adds to the deficit or somebody else has to make up the difference — like a senior on a fixed income, or a student trying to get through school, or a family trying to make ends meet.
“That’s not right. Americans know that’s not right. They know that this generation’s success is only possible because past generations felt a responsibility to each other, and to the future of their country, and they know our way of life will only endure if we feel that same sense of shared responsibility.”
There are some Republicans who can’t wait to take the issue of Buffett’s tax rate vs. Bosanek’s head-on. They are eager to argue that one of the world’s richest men deserves to pay a lower rate because his income derives from job-creating investments. These Republicans presumably consider his secretary a mere salaried employee who spends her money on such fripperies as, you know, food, shelter, clothing and transportation.
“The issue I think that’s going to play out this election is that question of Warren Buffett’s secretary,” House Majority Leader Eric Cantor, R-Va., said Wednesday on CNN. “We want her to make more money, we want her to have more hope for the future. . . . [But] this notion that somehow the income that Warren Buffett makes is the same as a wage income for his secretary, we know that’s not the same.”
In other words, it’s not just that the rich are better than the rest of us but also that their money is better than our money.
Is this really an argument the Republican presidential nominee is going to make? Not in so many words, surely. Newt Gingrich and Rick Santorum seem to understand that taking Cantor’s line would constitute political malpractice.
Mitt Romney may get it, too, but he has little room to maneuver. Romney’s wealth must be very special, indeed, to deserve vacations in Switzerland and the Cayman Islands, where he likes to park his money. But I digress.
Perhaps more of a political problem, from the GOP’s point of view, is Obama’s riff on shared responsibility. Republicans seem eager to double down on a “greed is good” ethos that has more resonance when the economy is booming, real estate values are soaring and everybody feels rich. Obama, by contrast, envisions a return to an America where the successful and fortunate lend a helping hand to those down on their luck, rather than coldly leave them behind. This seems much more in tune with the times.
Indiana Gov. Mitch Daniels, delivering the Republican response, offered an alternative that many voters might find cogent and unthreatening. He didn’t provide a lot of new ideas — basically, Daniels supports the same laissez-faire policies that got us into this crisis — but at least he didn’t sound like some kind of Ayn Rand acolyte who believes that economic Darwinism must always be allowed to run its course.
Daniels isn’t running for president, though, and the pragmatic conservatism he described — one that imagines a role for government — is out of touch with the radicalism that dominates his party. The Republicans who are running the party laugh at the concepts of fairness and collective responsibility. Soon they may find the joke’s on them.
“GOP Globetrotting”: It Sure Looks Like A Recess
The Democratic Congressional Campaign Committee had a little fun at the GOP leadership’s expense this week, mocking the Speaker and Majority Leader for their recent globetrotting. As Dems see it, these guys have more pressing matters at hand.
With House Speaker John Boehner and Majority Leader Eric Cantor on separate overseas trips, Democrats are taking shots in their absence.
A new DCCC website — http://www.whereintheoworldisjohnboehner.com — pounces on the GOP leaders for their globetrotting during congressional recess, when Democrats say they ought be at work tax cut plan. Of course, globetrotting during congressional recess is a time-honored, bipartisan tradition, so the dig does lose some of its punch.
The House is scheduled to return next week and is expected to pick up where it left off — fighting over how to pay for a yearlong extension of the payroll tax break.
Boehner has been traveling in Latin America, with stops in Brazil, Colombia, and Mexico, while Cantor visited the Middle East, by way of Paris. (The image the Dems posted shows Cantor with a photoshopped beret in front of the Eiffel Tower.)
With Fox News and other Republicans raising a fuss last month over President Obama’s trip to Hawaii, I suppose it stands to reason that Dems are going to try to return the favor.
But I had a slightly different question: if the Speaker and Majority Leader are gallivanting around the world, doesn’t that mean Congress is in recess? Indeed, the L.A. Times report defended their travels by saying “globetrotting during congressional recess is a time-honored, bipartisan tradition.”
But I thought Republicans said Congress isn’t in recess?
For that matter, Eric Cantor’s own website told visitors this week that Congress “is not in session.”
It’s probably a tidbit to keep in mind during the debate over recess appointments.
By: Steve Benen, Contributing Writer, Washington Monthly Politica Animal, January 14, 2012
Why Conservative Republicans Keep Rebelling Against John Boehner
The House GOP’s initial decision to reject the extension of the payroll tax cut was a bone-headed move. Indeed, it was impressively masochistic in the way it brazenly violated not only public opinion, but also the will of Republicans in the Senate, the vast majority of whom voted for the bill. But while Congressional Republicans were violating all manner of political common sense, that’s not to say that they weren’t following any sort of political logic at all. It just happens to be a logic of a particularly twisted sort.
One of the dominant factors motivating the decisions of rank-and-file right-wing House Republicans—and not just freshmen—is their lack of trust in Speaker John Boehner. They like him, but they just don’t believe he’s a dependable defender of their interests and beliefs. Those suspicions aren’t entirely groundless. Yes, Boehner has gone out of his way to cultivate the most conservative members of his caucus—every time he has hit an impasse, his first move is to the right, to accommodate them, not to the middle to replace some of them with willing Democrats. But the Speaker has also shown a penchant for compromise that right-wing House members can’t abide.
The first negotiation he conducted with President Obama was over the fiscal 2011 Continuing Resolution, which he billed as a sweeping reduction in spending with nearly $40 billion cut from the year’s collective appropriations. But it turned out in the cold light of day to be something else entirely, with only a fraction of a fraction of the cuts occurring in the remainder of that fiscal year. Next came the Speaker’s negotiations with Obama over a “grand bargain” on deficit reduction as the debt limit approached. No matter that Boehner extracted a range of concessions from the president, including cuts in discretionary spending and on Medicare—the package included a tax increase which conservative Congressmen deemed unacceptable. So when the Speaker appeared to again sign onto a deal laden with compromise—this time over the payroll tax cut that extended it for only two months, while including the main concession conservatives had demanded, action on the Keystone pipeline—those conservatives noisily rebelled.
Boehner’s trust gap is exacerbated by the fact that the rest of the GOP House leadership has been undermining his credibility as a negotiator. House Majority Leader Eric Cantor noisily dropped out of the debt limit negotiations the minute the tax issue was raised, saying it was above his pay grade and had to be carried out by the Speaker and the President—only to immediately disavow the agreement that Boehner and Obama reached. On the payroll tax negotiation, Boehner had no choice but to cave to aggrieved Tea Party members, lest he risk again having Cantor abandon him, leaving him exposed to right-wing attacks.
Ultimately, the root of the problem may lie in the stark lessons that the Republicans elected to Congress in 2010 seem to have drawn from an earlier cohort of conservative Congressmen—those that Newt Gingrich lead into the majority in 1994. Today’s Tea Partiers recognize that they share a similar governing philosophy with their forebears, but they believe almost uniformly that the Gingrichites sold out too quickly, blinking unnecessarily when the political heat got turned up. The conclusion many have drawn is that Gingrich made a huge mistake when he gave in after the disastrous government shutdown at the end of 1995—if Republicans had held out, lashed themselves to the collective mast and weathered the storm of public disapproval, Clinton would have caved and they would have succeeded at rolling back the welfare state.
There is, of course, zero evidence for this thesis, but that doesn’t matter. Some of this group will come back to DC in January believing that Boehner and sellouts like Mitch McConnell and John McCain have just repeated the error of 1995. That will make John Boehner’s task even more difficult as he moves to negotiate a new deal on the year-long extension of the payroll tax cut, and will compound his difficulties as he considers other key decisions, including the looming expiration of the Bush tax cuts. For Boehner, the nightmare will not only continue, but deepen.
By: Norman Ornstein, Roll Call December 24, 2011
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