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“The People’s Republic Of Nebraska?”: Nebraska’s No-Stalemate, Commie Legislature

Forget everything you know about Nebraska. Placidity, Midwestern aw-shucks-ness, red-meat exports and red-state politics? Nope, nope, nope, nope. In the past few days, the Cornhusker State’s legislature has astonished the nation with the kind of legislative assertiveness that could make Congressional Tea Partiers sputter in rage.

On May 27, the state legislature voted to override Republican Gov. Pete Ricketts’ veto of legislation that repealed the death penalty, making it the first red state in decades to bar executions. The next day, the state overrode the governor’s veto of legislation letting DREAMers—immigrants whose parents brought them into the country illegally when they were young—get driver’s licenses. And if that doesn’t have conservatives diving for the smelling salts, get this: These moves came just two weeks after the legislature overrode a veto of a hike on the gas tax.

So in the last few whirlwind weeks, a state mostly known for its corn products and youth football players has banned the death penalty, started giving driver’s licenses to ILLEGAL IMMIGRANTS!!, and—take a deep breath—raised taxes. But, despite appearances, this isn’t because carpetbagging liberal interlopers have launched a subversively successful campaign to turn the state into Vermont for college football fans. Rather, the structure of the state’s legislature makes weird alliances and inter-party strategizing the norm, not the exception. And people troubled by the partisanship that dominates national politics would be well-served to take note.

Instead of having a house and senate like the other 49 states, Nebraska has a single, unicameral legislative chamber. On top of that, party distinctions are invisible there: No majority and minority leaders, no whips, no partisan caucusing, none of that. State Sen. Colby Coash said that gives lawmakers significantly more latitude to vote their consciences than legislators in other states have. He said that delegations from other states sometimes visit their Capitol and look on with envy. Those lawmakers, he added, sometimes fear that if they break party lines, party whips will threaten to take away their office space, their staff budgets, and even their parking spots.

“When you don’t have a party boss on either side, I think it frees you to use your mind and to make decisions that you think are right,” the senator said.

On top of that, every bill that legislators introduce gets an open, public committee hearing, so legislators don’t worry that their bills will get shelved indefinitely, and they don’t feel the same pressure to suck up to any party leadership.

“In most states you can introduce anything you want—but if you aren’t in the right party or don’t know the right person, you don’t even get a hearing on your bill,” Coash said. Nebraska’s political culture is very different, he added.

This unique independence played a huge role in the passage of the death penalty repeal, he said. Though the governor has been an adamant, vocal, and dogged advocate of keeping the death penalty, a critical mass of Republican lawmakers didn’t fear bucking him.

“My words cannot express how appalled I am that we have lost a critical tool to protect law enforcement and Nebraska families,” Ricketts said in a statement after the override vote, USA Today reported. The unicameral was “out of touch” with the state’s voters, he added.

Lawmakers, obviously, didn’t share those qualms.

“The Nebraska structure fosters a culture of people voting on their conscience rather than by politics,” said Shari Silberstein, executive director of Equal Justice USA, who helped organize the anti-death-penalty push that unified conservatives and progressives.

Stopping executions was just the start. The legislature’s decision to override the governor and implement a gas tax might be even more surprising, given the pressure national anti-tax groups put on state legislators to resist these kind of hikes. The state currently taxes gas at 26.5 cents per gallon, and it hasn’t raised that number in years. Advocates of the tax hike argued that the state needed to spend more on road and bridge maintenance, and that their options for finding the funds were slim.

“There’s just potholes everywhere here,” said Perry Pirsch, a prominent Lincoln attorney and spokesman for Citizens for a Better Lincoln PAC. “And there’s bridges that are in rough shape and potentially could crumble if they’re not worked on in the years to come, and we were overdue for an increase.”

And Jim Vokal, CEO of the Platte Institute for Economic Research, said his typically anti-tax group favored the hike, but wished it had been part of a broad tax reform bill.

“Typically the unicameral has operated with an independent mindset and that was certainly evident this year,” he added.

The fact that Nebraska decided to raise taxes to pay for infrastructure funding puts it in stark contrast with Wisconsin, where Gov. Scott Walker proposed issuing bonds to fund road improvement projects.

And who’s going to be paying higher gas taxes to drive on hopefully improved roads and bridges in the People’s Republic of Nebraska? Undocumented immigrants are going to be paying (some of) those taxes, thanks to even more bipartisan leadership-bucking. When the legislature overrode Ricketts’ veto, Nebraska became the last state in the country to let undocumented immigrants who came to the country as children get driver’s licenses.

So depending on your perspective, Nebraska is either a corn-fed, post-partisan Utopia or an anarchic pit of death-penalty-free chaos. Nebraskans seem inclined to think the former.

“There’s a lot of people in Nebraska who feel very strongly about their independent-mindedness,” said Ari Kohen, a political science professor at the University of Nebraska-Lincoln. “And to see it play out this way and have the nation see it play out this way, there’s a pride in that.”

 

By: Betsy Woodruff, The Daily Beast, May 30, 2015

May 31, 2015 Posted by | Death Penalty, Nebraska Legislature, Pete Ricketts | , , , , , , | 2 Comments

“A Dangerous Direction”: Corporate Tax Break Scheme Is Gaining A Momentum We Must Stop

There is no real argument over whether the nation needs to do more to improve its infrastructure – its transportation, water, power and information networks. But there is an argument over how best to pay for it all – and that argument is increasingly turning in a dangerous direction.

Financially stressed working-class households who are at best treading water, if not actually sinking, in today’s economy aren’t eager to dig deeper into their own pockets to foot the bill. That’s even more true of the plutocrat class, which has an army of lobbyists at the ready to shut down any suggestion that those who arguably would benefit the most from such things as better roads and public transportation should shoulder the larger share of the load.

Politicians of both parties in Washington are therefore increasingly relying on one of the schemes in the voodoo economics toolbox: give corporations hoarding money overseas to avoid taxation a form of tax holiday in exchange for increased corporate funding for infrastructure.

The Bond Buyer financial news site reports that Sen. Rand Paul (R-TX) and Sen. Barbara Boxer (D-CA) are close to agreeing on a plan that would give multinationals a deep tax reduction on money they currently have stashed overseas if they bring the money back into the United States, also known as repatriation. Money collected would be deposited into the Highway Trust Fund, which is dedicated to paying for federal transportation projects.

Paul’s promoting of this idea is not new; he had a bill last year that would have permanently cut the tax rate on profits corporations hold overseas, with the funds going into an emergency fund for what it considered high-priority highway projects. But his collaboration with Boxer is likely to give the idea more political momentum.

Meanwhile, the chairman of the House Transportation and Infrastructure Committee, Rep. Bill Shuster (R-PA), told the U.S. Conference of Mayors last week that raising the gasoline tax to pay for transportation improvements – the most logical near-term solution since that tax hasn’t been raised in almost 22 years – is off the table in his committee. Instead, “the number one source that’s being talked about is this repatriation of funds,” he said, according to The Hill newspaper.

Rep. John Delaney (D-MD) is a leading proponent of a repatriation-for-transportation-funding scheme. In December he filed a bill expected to be reintroduced this year that would allow multinational corporations to bring back overseas profits at a tax rate of 8.75 percent instead of the current statutory tax rate of 35 percent. The revenue collected would be placed in the Highway Trust Fund and in a $50 billion America Infrastructure Fund, which would be used to leverage up to $750 billion worth of state, local and private funding for infrastructure projects around the country.

With the White House giving its tacit blessing to such schemes while refusing to support proposals to raise funding in other ways, tapping profits now held overseas at a deeply discounted tax rate is becoming the default position for how to begin covering a more-than-$1 trillion infrastructure investment deficit.

But is rewarding tax avoidance really the way to fund our public infrastructure needs?

The biggest problem with the Delaney proposal, and the similar proposal from Paul, is that “it would allow companies such as Apple and Microsoft, which have parked hundreds of billions of dollars of US profits in offshore tax havens, to pay a US tax rate of no more than of 8.75 percent, instead of the more than 30 percent tax they should pay on these profits,” says an analysis by Citizens for Tax Justice.

These profits – more than $2 trillion – are usually laundered through foreign subsidiaries in low-tax or no-tax countries in ways designed to avoid US taxes. That can be done as simply as having that online purchase you think you are making through an American-based company actually handled by a Swiss or Irish subsidiary, or by transferring a patent to an overseas subsidiary so that revenues on licensing that patent flow through the subsidiary. Sometimes, the money isn’t even actually overseas, but is deposited in US banks and is being used for domestic purposes. In any event, regardless of where the money ends up being deposited, it is not “trapped overseas,” as corporate lobbyists and their supporters in Congress often say; it’s just that they don’t want to pay a higher tax on that money.

The last time corporations got a repatriation tax holiday in exchange for the promise to use the profits in job-creating investments, in 2004, corporations instead ended up using the money brought back into the country to boost shareholder dividends and buy back stock (which drives up stock prices and, often, the compensation of CEOs). There is little reason to believe that the same thing wouldn’t happen again in 2015.

Setting a bargain-basement tax rate for profits booked through foreign subsidiaries serves as nothing more than an incentive for corporations to escalate the schemes – or a wedge to convince lawmakers that if an ultra-low corporate tax rate is good for profits repatriated from overseas, perhaps all corporate profits should be taxed at that rate.

In any event, it is the rest of us who end up being the losers. When multinational corporations don’t pay their fair share in taxes, the rest of us have to make up the difference – or suffer the inability to pay for the things that we need, like good roads and public transportation. That includes businesses who don’t have the capacity to set up the fancy tax dodges that their competitors use.

What we need is honest tax reform that makes corporations and the wealthy pay their fair share, closing the door for good on the loopholes and schemes they use to avoid paying taxes. We also need an honest and equitable way to pay for the infrastructure improvements we need. Both are possible, but not without considerable heat from an aroused public. Congress will have to decide this year how it will pay for a multiyear transportation bill. We can’t let the default option be coins from the table of corporate tax avoidance.

 

By: Isaiah J. Poole, Campaign For America’s Future, January 26, 2015

January 28, 2015 Posted by | Corporate Welfare, Multinational Corporations, Tax Loopholes | , , , , , , , , | Leave a comment

“Foot-Dragging Tedium Can Become Dangerous”: Senate Republicans Are Already Frustrated With John Boehner’s Crazy Caucus

There’s an any-port-in-a-storm quality to Speaker John Boehner’s piloting of the House, and nothing illustrates that better than Republican squabbling over whether and how to fund the Department of Homeland Security.

Why is the Department of Homeland Security about to run out of money? Because back in December, conservatives wanted to use a government funding deadline to pick a big fight with President Obama over his deportation relief policies, and rather than risk a shutdown, or wrest the till back from the hardliners, GOP leaders decided to give them whatever they could cobble together. What they came up with was a harebrained scheme to fund all government operations except for Homeland Security through the end of the fiscal year. Meanwhile, they extended DHS funding through February only, and promised to fight Obama’s deferred action programs in the context of a narrower threat to shut down the department that enforces immigration policy.

The problems with this strategy were obvious from the outset. As I observed at the time, denying DHS an appropriation wouldn’t freeze Obama’s deportation programs, because the agency implementing them is self-financing. In fact, denying DHS an appropriation wouldn’t accomplish very much at all; as a national security hub, most of its functions are considered essential, and thus exempt from the kinds of closure protocols that apply to national parks and Social Security administrative offices.

The upshot is that Republicans are threatening to infuriate DHS employees and their allies, weaken DHS functionality, and, in a losing p.r. campaign, surrender the mantle of national security back to Democrats—all unless Obama agrees to rescind his own executive actions. As muggings go, this isn’t much different than screaming, “Your money or my life!” No less an immigration hardliner than Representative Steve King understands that the plan has always amounted to capitulation.

But having promised a brawl, Boehner must now go through the motions, which look more and more contrived as prominent Republicans—particularly in the Senate—step in to admit that they will fund DHS, come what may.

This week, John Cornyn, the number two Senate Republican, told CNN “we’re not going to take any chances with the homeland.” Cornyn is showing his cards here, but he’s also putting the House’s strategy up for ridicule. Because House Republicans must proceed as promised, Cornyn et al must now pledge not to incur the mostly-imagined risk that his House counterparts are supposedly inviting. When Republicans let appropriations lapse in 2013, and DHS was just one of the many agencies ensnared in the shutdown, domestic security wasn’t the core political concern. By centering the fight around DHS alone, though, conservatives have left themselves no choice but to swallow Democratic demagoguery—their strategy is premised on the notion that Obama will relent when the threat to national security becomes too great. There are no national park closures to obscure the fact that the fight is over something called the Department of Homeland Security, and you gain no leverage by threatening to withhold funds from DHS, if you admit that withholding funds from DHS doesn’t really accomplish much.

Senate Republicans have other political concerns as well.

Dean Heller, a Republican senator from Nevada, worries that forcing a fight with Obama over immigration policy, in the context of an appropriation, invites the risk that certain members lapse into referring to affected immigrants “in a way that is offensive.” Mark Kirk of Illinois—a vulnerable incumbent—believes any “government shutdown scenario” would be “a self-inflicted political wound for Republicans.”

Where Senate Republicans would like to avoid deadline-driven fights altogether, Boehner promises to drag them into those fights at the behest of conservatives, even when he knows he can’t win. His inability to admit the obvious, while Republican senators feel unencumbered, reflects the dramatically different pressures a House speaker and a Senate majority leader face. The strategic rift thus isn’t limited to DHS, but will emerge any time Senate Republicans see political dividends in a compromise that House hardliners won’t accept.

To avoid an embarrassing, damaging lapse in highway funding, for instance, senate Republicans, including Orrin Hatch, who helms the tax writing committee, are warming to the idea of replenishing the highway trust fund by increasing the gas tax. Collapsing gas prices have made the prospect of a higher gas tax less punitive, and lent an obvious idea bipartisan support.

Naturally, Boehner can’t accept this.

At least not yet. The logic of a higher gas tax might become more appealing to him as the funding deadline nears, just as we assume the logic of extending DHS funding cleanly will overwhelm him before too long. As a template for addressing pressing national business, taking symbolic stands like these is more tedious than dangerous. But foot-dragging tedium can become dangerous when the pressing business is increasing the debt limit or responding to unanticipated crises.

 

By: Brian Beutler, The New Republic, January 14, 2015

January 17, 2015 Posted by | Congress, House Republicans, Senate | , , , , , , , | Leave a comment

“Build We Won’t”: Weakening The Economy In The Short Run While Undermining Its Prospects For The Long Run

You often find people talking about our economic difficulties as if they were complicated and mysterious, with no obvious solution. As the economist Dean Baker recently pointed out, nothing could be further from the truth. The basic story of what went wrong is, in fact, almost absurdly simple: We had an immense housing bubble, and, when the bubble burst, it left a huge hole in spending. Everything else is footnotes.

And the appropriate policy response was simple, too: Fill that hole in demand. In particular, the aftermath of the bursting bubble was (and still is) a very good time to invest in infrastructure. In prosperous times, public spending on roads, bridges and so on competes with the private sector for resources. Since 2008, however, our economy has been awash in unemployed workers (especially construction workers) and capital with no place to go (which is why government borrowing costs are at historic lows). Putting those idle resources to work building useful stuff should have been a no-brainer.

But what actually happened was exactly the opposite: an unprecedented plunge in infrastructure spending. Adjusted for inflation and population growth, public expenditures on construction have fallen more than 20 percent since early 2008. In policy terms, this represents an almost surreally awful wrong turn; we’ve managed to weaken the economy in the short run even as we undermine its prospects for the long run. Well played!

And it’s about to get even worse. The federal highway trust fund, which pays for a large part of American road construction and maintenance, is almost exhausted. Unless Congress agrees to top up the fund somehow, road work all across the country will have to be scaled back just a few weeks from now. If this were to happen, it would quickly cost us hundreds of thousands of jobs, which might derail the employment recovery that finally seems to be gaining steam. And it would also reduce long-run economic potential.

How did things go so wrong? As with so many of our problems, the answer is the combined effect of rigid ideology and scorched-earth political tactics. The highway fund crisis is just one example of a much broader problem.

So, about the highway fund: Road spending is traditionally paid for via dedicated taxes on fuel. The federal trust fund, in particular, gets its money from the federal gasoline tax. In recent years, however, revenue from the gas tax has consistently fallen short of needs. That’s mainly because the tax rate, at 18.4 cents per gallon, hasn’t changed since 1993, even as the overall level of prices has risen more than 60 percent.

It’s hard to think of any good reason why taxes on gasoline should be so low, and it’s easy to think of reasons, ranging from climate concerns to reducing dependence on the Middle East, why gas should cost more. So there’s a very strong case for raising the gas tax, even aside from the need to pay for road work. But even if we aren’t ready to do that right now — if, say, we want to avoid raising taxes until the economy is stronger — we don’t have to stop building and repairing roads. Congress can and has topped up the highway trust fund from general revenue. In fact, it has thrown $54 billion into the hat since 2008. Why not do it again?

But no. We can’t simply write a check to the highway fund, we’re told, because that would increase the deficit. And deficits are evil, at least when there’s a Democrat in the White House, even if the government can borrow at incredibly low interest rates. And we can’t raise gas taxes because that would be a tax increase, and tax increases are even more evil than deficits. So our roads must be allowed to fall into disrepair.

If this sounds crazy, that’s because it is. But similar logic lies behind the overall plunge in public investment. Most such investment is carried out by state and local governments, which generally must run balanced budgets and saw revenue decline after the housing bust. But the federal government could have supported public investment through deficit-financed grants, and states themselves could have raised more revenue (which some but not all did). The collapse of public investment was, therefore, a political choice.

What’s useful about the looming highway crisis is that it illustrates just how self-destructive that political choice has become. It’s one thing to block green investment, or high-speed rail, or even school construction. I’m for such things, but many on the right aren’t. But everyone from progressive think tanks to the United States Chamber of Commerce thinks we need good roads. Yet the combination of anti-tax ideology and deficit hysteria (itself mostly whipped up in an attempt to bully President Obama into spending cuts) means that we’re letting our highways, and our future, erode away.

 

By: Paul Krugman, Op-Ed Columnist, The New York Times, July 3, 2014

July 5, 2014 Posted by | Economy, Infrastructure | , , , , , , | Leave a comment