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“Poisonous Intra-Party Politics”: John Boehner’s Resignation Won’t Save Republicans From Themselves

For all his flaws, House Speaker John Boehner, who announced on Friday that he will resign from Congress at the end of October, was badly served by a lot of people.

Boehner’s decision is due not to any ostensible scandal or illness but to cruel political mathematics: His conference has become so dysfunctional that when a Republican speaker resigns, the House becomes less, not more, chaotic and reckless. The circumstances that prefigured his resignation are thus a fitting metaphor for his entire speakership and for the state of the Republican Party as a whole. It would be to Boehner’s credit to do everything in his power in the next month to protect his successor from the same fate.

What makes Boehner’s decision surprising is that the forces that drove him to it are familiar enough that they’ve become mundane. Up against a deadline to complete a basic function of government—in this case, to fund it—Boehner found himself beset by conservative demands that he condition Congress’ obligation to help run the country on President Barack Obama’s capitulating to partisan demands. This time the demand was to defund Planned Parenthood. In the past it’s been to change immigration policy, slash social spending, and defund the Affordable Care Act. In each instance, Boehner was confronted with a terrible choice: provoke a crisis, like the 2013 government shutdown, or capitulate to Obama, and face repercussions from unruly conservative members, who were constantly threatening to depose him.

These episodes of brinkmanship always resolved themselves, sometimes in damaging ways. In addition to the shutdown, Boehner’s 2011 decision to ransom the statutory debt limit brought the country within hours of an economically devastating credit default, and precipitated an agreement to impose automatic, indiscriminate spending cuts that harm the government and the economy to this day. More recently, he placated his members by embroiling the House in a lawsuit against the president, which, if successful, would precipitate a constitutional crisis. But he always maintained his brittle grip on power. Either he no longer believes he can, or doesn’t want the hassle anymore.

By stepping down, but not for a month, Boehner has freed himself from the poisonous intraparty politics that made it all but impossible for him to govern, and left himself a brief opening in which to settle some accounts, before the next speaker is elected.

If the succession of power goes as it has in recent years, his deputy—Majority Leader Kevin McCarthy of California—will become speaker. A conservative dark horse, like Representative Jeb Hensarling of Texas, could mount a challenge. But any insurgent candidate will have to overcome the fact that the speakership, unlike the majority leadership and other high-ranking posts, is determined by the entire House. Democrats, who can not elect a speaker on their own, are ultimately likelier to assure a victory for McCarthy over the devil they don’t know.

But no matter who comes next, the question is whether they’ll immediately confront the same tawdry dynamic that ultimately felled Boehner, or whether Boehner takes it upon himself to bring some stability to the chamber.

If he takes the path of least resistance, the next speaker will have all the same problems Boehner had, minus his years of experience. That path would end with a brief continuation of government funding—just enough to hand the same political mess over to a new leadership team. It would leave the government no less vulnerable to a shutdown, or another debt limit crisis, or a lapse in highway funding, and the party no less vulnerable to bearing responsibility for a crisis in the middle of election season. Call it Boehner’s curse.

Boehner probably can’t end the vicious cycle that hobbled his speakership. But he could plausibly clear the deck for his successor for long enough that the big issues Republicans want to fight over can play out in the election, rather than in the throes of governance. He could place legislation on the floor that funds the government for a year, extends the debt limit through 2016, and replenishes the highway trust fund, and allow Democrats to supply most of the votes required to restore calm. If Boehner were determined to make the next speakership less volatile than his own, and to end his own speakership on a note of responsible stewardship, he almost certainly could. What remains to be seen is whether he has one last fight left in him.

 

By: Brian Beutler, Senior Editor, The New Republic; September 26, 2015

September 27, 2015 Posted by | Conservatives, House Republicans, John Boehner | , , , , , , , , | 1 Comment

“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

“Boehner’s Imaginary Allegations”: Speaker Still Struggling To Explain Anti-Obama Lawsuit

No one seems quite as happy about House Speaker John Boehner’s (R-Ohio) anti-Obama lawsuit as President Obama himself. For the West Wing, the Republican litigation helps prove to the public, in a rather definitive way, that Obama’s governing while GOP lawmakers in Congress sit around and complain. Indeed, the frivolous case is effectively a bold announcement that the Republican-led House wants the federal government to be paralyzed indefinitely – which is hardly a winning message in an election year.

And so the president has ended up talking more about Boehner’s prospective lawsuit than Boehner has. “I told [the House Speaker], ‘I’d rather do things with you, pass some laws, make sure the Highway Trust Fund is funded so we don’t lay off hundreds of thousands of workers.’ It’s not that hard,” Obama said last week. “Middle-class families can’t wait for Republicans in Congress to do stuff. So sue me. As long as they’re doing nothing, I’m not going to apologize for trying to do something.”

Yesterday, Boehner responded with a CNN op-ed, defending the litigation he has not yet filed. It’s worth scrutinizing in detail.

[T]oo often over the past five years, the President has circumvented the American people and their elected representatives through executive action, changing and creating his own laws.

First, the Speaker needs to understand, in a “Schoolhouse Rock” sort of way, that the White House cannot create its own laws. That’s gibberish. Obama can create policies through executive orders and executive actions, but those aren’t literally new laws. Second, to help bolster his case about Obama abuses, Boehner referenced exactly zero specific examples.

What’s disappointing is the President’s flippant dismissal of the Constitution we are both sworn to defend.

No, holding the debt ceiling hostage, vowing to crash the global economy on purpose while ignoring the “Full Faith and Credit” of the United States is a “flippant dismissal of the Constitution.” Obama’s use of executive authority, on the other hand, is fairly routine.

I know the President is frustrated. I’m frustrated. The American people are frustrated, too. After years of slow economic growth and high unemployment under President Obama, they are still asking, ‘where are the jobs?’

Boehner may not remember this – 2008 seems like a long time ago – but Obama inherited the worst economic conditions since the Great Depression. The president proceeded to turn the economy around, no thanks to Boehner, who demanded a five-year spending freeze at the height of the crisis, and has fought ever since for fewer investments, less capital, less demand, and higher unemployment through laid off public-sector workers.

As for where the jobs are, the United States is currently on track for the best year for job creation since the 1990s and June was the 52nd consecutive month in which we’ve seen private-sector job growth – the longest streak on record. Why didn’t Boehner read the jobs report?

The House has passed more than 40 jobs bills that would help.

No, not really.

Washington taxes and regulations always make it harder for private sector employers to meet payrolls, invest in new initiatives and create jobs – but how can those employers plan, invest and grow when the laws are changing on the President’s whim at any moment?

First, if presidential whims periodically change American law outside the constitutional system, then Congress would have a responsibility to impeach the president. Since this allegation is imaginary, however, there’s no need. Second, if Boehner is concerned about employers’ confidence in economic stability, the Speaker can approve resources for the Highway Trust Fund and stop playing games with the economy (again).

If House Republicans have a legitimate complaint, shouldn’t it be easier for Boehner to make his case?

 

By: Steve Benen, The Maddow Blog, July 7, 2014

July 8, 2014 Posted by | House Republicans, John Boehner | , , , , , , , | 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

   

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