“We Are Not A Deadbeat Nation”: Do Your Duty Congress, Or We’ll All Suffer The Consequences
By the time the president was making his case for the fourth time, the responses started getting a little repetitious, but Obama’s line didn’t change: we’ve already made enormous progress on debt reduction, he’s willing to do more, but a hostage strategy based on the debt ceiling isn’t acceptable.
In fact, the president spent a fair amount of time trying to explain to the public what some reporters occasionally overlook:
“The debt ceiling is not a question of authorizing more spending. Raising the debt ceiling does not authorize more spending. It simply allows the country to pay for spending that Congress has already committed to.
“These are bills that have already been racked up, and we need to pay them. So while I’m willing to compromise and find common ground over how to reduce our deficits, America cannot afford another debate with this Congress about whether or not they should pay the bills they’ve already racked up. […]
“So to even entertain the idea of this happening, of the United States of America not paying its bills, is irresponsible. It’s absurd…. And Republicans in Congress have two choices here: They can act responsibly and pay America’s bills or they can act irresponsibly and put America through another economic crisis. But they will not collect a ransom in exchange for not crashing the American economy. The financial well-being of the American people is not leverage to be used. The full faith and credit of the United States of America is not a bargaining chip.”
It doesn’t sound like he’s ready to cave. On the contrary, it sounds like the president is issuing a not-so-subtle challenge to congressional Republicans: do your duty or we’ll all suffer the consequences.
The president went on to say:
“[T]he issue here is whether or not America pays its bills. We are not a deadbeat nation. And so there’s a very simple solution to this. Congress authorizes us to pay our bills.
“Now if the House and the Senate want to give me the authority so that they don’t have to take these tough votes, if they want to put the responsibility on me to raise the debt ceiling, I’m happy to take it. Mitch McConnell, the Republican leader in the Senate, had a proposal like that last year, and I’m happy to accept it.
“But if they want to keep this responsibility, then they need to go ahead and get it done. And you know, there are no magic tricks here. There are no loopholes. There are no, you know, easy outs. This is a matter of Congress authorizes spending. They order me to spend. They tell me: You need to fund our Defense Department at such-and-such a level. You need to send Social Security checks. You need to make sure that you are paying to care for our veterans.
“They lay all this out for me, and — because they have the spending power. And so I am required by law to go ahead and pay these bills.
“Separately, they also have to authorize a raising of the debt ceiling in order to make sure that those bills are paid. And so what Congress can’t do is tell me to spend X and then say, but we’re not going to give you the authority to go ahead and pay the bills.”
Obama added that he’s ready to negotiate on debt reduction, and he’s even open to entitlement changes, but he doesn’t intend to reward Congress for doing what it must do anyway.
What’s more, of particular interest was the president highlighting Republicans’ philosophical goals, which have less to do with debt reduction, and more to do with undermining public institutions.
“[I]t seems as if what’s motivating and propelling at this point some of the House Republicans is more than simply deficit reduction. They have a particular vision about what government should and should not do. So they are suspicious about government’s commitments, for example, to make sure that seniors have decent health care as they get older. They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending money on medical research. So they’ve got a particular view of what government should do and should be.
“And that view was rejected by the American people when it was debated during the presidential campaign. I think every poll that’s out there indicates that the American people actually think our commitment to Medicare or to education is really important, and that’s something that we should look at as a last resort in terms of reducing the deficit, and it makes a lot more sense for us to close, for example, corporate loopholes before we go to putting a bigger burden on students or seniors.”
I’m glad Obama reminded the political world of this basic truth; I get the sense folks sometimes forget what the driving motivations are behind many of our ongoing partisan fights.
By: Steve Benen, The Maddow Blog, January 14, 2013
“An Ossified Movement”: Bold New Conservative Ideas Still Mostly Involve Screwing The Poor
The Republicans, we’re told, are going to have to start making some big changes if they want to start winning elections again. (Besides all the congressional elections they handily win.) Americans are tired of their stale rhetoric and old, white standard-bearers. The party needs fresh blood and bold ideas. It needs people like Louisiana Gov. Bobby Jindal, a GOP rising star and highly regarded “ideas” guy.
After the election, Jindal told Politico that the Republicans had to totally rebrand themselves to escape being known as “the party of big business, big banks, big Wall Street bailouts, big corporate loopholes, big anything.” And so Bobby Jindal’s big new idea for Louisiana is … eliminating all income taxes. And shifting the tax burden onto poor and working people.
NEW ORLEANS, Jan 10 (Reuters) – Republican Governor Bobby Jindal said on Thursday he wants to eliminate all Louisiana personal and corporate income taxes to simplify the state’s tax code and make it more friendly to business.
Bold! Fresh! New! But how will Louisiana get money to pay for stuff? Easy!
Political analyst John Maginnis, who on Thursday reported in his email newsletter LaPolitics Weekly that Jindal will propose balancing the tax loss by raising the sales tax, now at 4 percent, said the strategy fits with the governor’s interest in keeping a high national profile.
While we don’t yet know the sales tax rate Jindal will propose, any hike would make Louisiana’s sales tax technically higher than New York state’s, which is also 4 percent. The tax will be still greater in many Louisiana parishes, including New Orleans, where the combined sales tax rate is currently 10 percent, making it already higher than New York City’s 8.875 percent.
The thing about sales taxes is that they are inherently and extremely regressive, hitting poorer people much harder than richer people, because the poor spend a greater proportion of their income on goods subject to the sales tax than rich people do.
The Institute on Taxation and Public Policy has already whipped up a little report, and, surprise, eliminating Louisiana’s income tax and replacing it with higher sales taxes means taxing rich people much less and poor people much, much more. According to ITEP, while Louisiana millionaires would receive a tax cut of around a quarter of a million dollars, “[the] poorest 20 percent of taxpayers, those with an average income of $12,000, would see an average tax increase of $395, or 3.4 percent of their income, if no low income tax relief mechanism is offered.” (And if a low income tax relief mechanism is offered, it will have to be paid for, almost definitely on the backs of the middle 20 percent, with average incomes around $43,000.)
This is the fresh new plan from a guy regularly touted as the future of the party: A massive tax cut for rich people, in an already low-service state, paid for with a tax hike on poor people. Remember this the next time you read a story about how a major conservative figure — like Jindal or Marco Rubio or Paul Ryan — has announced that his party has to get serious about helping the poor or at least not actively hurting them: The movement these guys are products of is incapable of generating “new ideas” to help poor people, and is still dedicated to a policy agenda developed mostly before Reagan was president.
Jim DeMint is not a fresh face, but he’s the new head of the Heritage Foundation, the most influential and powerful of the conservative think tanks. Heritage’s mission is to decide the policy agenda of the conservative movement. If “new ideas” on poverty or anything else are going to gain acceptance on the right, they will likely have to come from the Heritage Foundation. And so DeMint published an Op-Ed in the Washington Post last week, laying out his agenda as the new face of the intellectual arm of the movement. It is atrocious. It is so lacking in anything resembling substance or argument that I can’t figure out why the Post published it. This is the closest it gets to an attempt at persuasion:
Conservative ideas work. Numerous states are demonstrating that low taxes, right-to-work laws, school choice, energy development and other common-sense policies improve the lives of everyone. Conversely, progressive central planning has failed throughout history and is still failing today.
OK, sure. “Conservative ideas work and liberal ideas don’t” is a very compelling message. Remember what I said about the policy agenda not changing for 30 years? The rest of the piece is mostly about welfare reform and missile defense. DeMint says Heritage will work very hard on convincing Americans that ideas like welfare reform and missile defense are good ideas. And then we’ll defeat the commies and show the Ayatollah who’s boss. Maybe we can fight a War on Drugs, too?
How’s that welfare reform working out for people, exactly? In the state of Georgia, where 300,000 families survive below the poverty line, 4,000 people are on welfare. The goal is zero people on welfare. Not “zero poor people,” but zero recipients of government benefits. Welfare reformers, whose goal is the shrinking of welfare rolls, not the aiding of impoverished people, would consider this a success story. Conservative ideas work!
The Republican Party will not “get serious” about poverty, or foreign policy or climate change or anything else, until it extracts itself from the conservative movement that rescued it after the collapse of the New Deal coalition. But there’s not a single GOP “leader” or rising star who isn’t a product of that movement through and through. They may fix their electoral problems with fresh rhetoric or new faces, but once in office they’ll govern as if nothing has changed since 1980, with disastrous results for every non-wealthy American.
By: Alex Pareene, Salon, January 14, 2013
“It’s All Or Nothing”: The Obama Administration Plays Hardball On Medicaid
When the Supreme Court upheld the Affordable Care Act, it also gave Republican states a gift by saying they could opt out of what may be the ACA’s most important part, the dramatic expansion of Medicaid that will give insurance to millions of people who don’t now have it. While right now each state decides on eligibility rules—meaning that if you live in a state governed by Republicans, if you make enough to have a roof over your head and give your kids one or two meals a day, you’re probably considered too rich for Medicaid and are ineligible—starting in 2014 anyone at up to 133 percent of the federal poverty level will be eligible. That means an individual earning up to $14,856 or a family of four earning up to $30,657 could get Medicaid.
Republican governors and legislatures don’t like the Medicaid expansion, which is why nine states—South Dakota, plus the Southern states running from South Carolina through Texas—have said they’ll refuse to expand Medicaid (many other states have not yet said whether they’ll do it). But some states asked the Obama administration whether they could expand Medicaid a bit—maybe not cover everyone up to 133 percent like the law says, but add a few people to the rolls. And yesterday, the administration said no. It’s all or nothing: either you expand Medicaid up to 133 percent, or you get none of the new money. Was that the right thing to do? Well first, let’s talk about that money.
These Republican states offer worries about cost as their reason for rejecting the Medicaid expansion. But in truth, it’s an incredibly sweet deal for them. Right now, the federal government generally pays half of the cost of Medicaid, with the state picking up the other half. But the federal government will pay 100 percent of the cost of new Medicaid recipients signed up because of the expansion between 2014 and 2016. After that the federal contribution will step down to 90 percent by 2020, where it will stay forever more. So the state gets to insure a whole bunch of its citizens for nothing at first, and eventually for only 10 cents on the dollar. And in return they get reduced costs for uncompensated care, and a healthier, more productive citizenry with more money to spend. Some studies have projected that states will more than make up for their 10 percent contribution with health care savings they’ll get from an insured population; that’s likely to be particularly true among those states whose Medicaid eligibility standards are currently the stingiest, who not coincidentally have the highest rates of uninsured citizens (and, also not coincidentally, are precisely those states where the Republican leadership is refusing to accept the expansion).
And yet, the most conservative among them won’t take the deal. The federal government is saying to the states, Here is a bunch of free money for you to give health insurance to your uninsured poor citizens. And these states are saying, No way! Their justification of budget worries is so unpersuasive that it’s impossible to avoid the conclusion that they would rather see people have no insurance, and thus be poorer, sicker, and die sooner, than get Medicaid via Obamacare. It’s truly a moral abomination.
By playing a little bit of hardball and not letting states get away with a partial expansion, the administration is betting that before long the states will find all this free money to insure their citizens irresistible. And they may be right. That’s what happened when Medicaid was established in 1965; few states signed up at first, but before long they all did. Right now these governments are being pressured by some powerful interests to take the expansion, particularly the hospitals who have to deal with patients with no way to pay their bills. If they expanded Medicaid a little but not fully, that pressure wouldn’t be as intense and they could claim they expanded coverage. This way they won’t be able to hide behind a partial expansion and claim they did the right thing. Let’s hope the administration is right, because millions of Americans’ futures depend on it.
By: Paul Waldman, Contributing Editor, The American Prospect, December 11, 2012
“Blue Light Special”: Walmart To Pass More Of Its Costs On To Taxpayers
The nation’s largest private employer, Walmart, has announced that beginning in 2013 it will begin drastically reducing the number of new hires who receive health insurance coverage, according to The Huffington Post.
The retail giant surprised many by supporting the drive for universal health care in 2007 and then the employer mandate in 2009.
However, its planned policy of not offering new employees health insurance if their hours dip below 30 a week indicates that they intend to take advantage of Obamacare’s new obligation to provide coverage for those who cannot afford it. And with several Republican governors promising to deny the funds for Medicaid expansion, the new policy could lead to a swift increase in the uninsured.
In several states, Walmart tops the list of employers whose employees seek government-funded health care and food assistance for their families, forcing taxpayers to subsidize its low prices and low wages.
Former Secretary of Labor Robert Reich points out that despite the incredible wealth of Walmart’s primary stockholders, the Walton family, its employees earn wages that may not even keep them out of poverty.
“The average Walmart employee earns $8.81 an hour. A third of Walmart’s employees work less than 28 hours per week and don’t qualify for benefits,” Reich wrote in one of his recent columns encouraging the retail giant’s employees to organize. Across the country a small percentage of Walmart’s employees walked out on Black Friday, protesting the company’s alleged retaliation against workers who speak out for better working conditions.
“Organizing makes economic sense,” Reich wrote.
In 2006, Walmart responded to criticism by greatly expanding the number of employees to whom it offered health insurance. They reduced the number receiving coverage in 2011.
“This is another example of a tremendous government subsidy to Walmart via its workers,” Nelson Lichtenstein, director of the Center for the Study of Work, Labor and Democracy at the University of California, Santa Barbara told The Huffington Post.
This change in policy will push the number of employees without benefits closer to one half.
Critics have said that Walmart provides a huge benefit to poor consumers by multiplying the value of food stamps with its low prices. But to Doug Henwood, that argument misses the central problem with the impact that Walmart has had on our economy:
And, yeah, it’s nice that Walmart has been able to provide a working class facing at best stagnant wages with lots of cheap stuff, but Walmart has itself had no small effect on dragging average wages down. It’s not just that they’ve been an inspiring business model for the rest for corporate sector, impressed by the chain’s growth and profitability. That’s led to endless rounds of outsourcing and speedup. But also by lowering the cost of reproduction of the working class, to use the old language, they’ve made it easier for employers to keep a lid on wages.
Add into the equation that taxpayers are subsidizing the costs of these wages and you have a formula for a permanent underclass underwritten by a government that can do little else than providing basic health care and sustenance.
By: Jason Sattler, The National Memo, December 3, 2012
“The Romney-Ryan Budget”: A Sketchy Plan That Makes Social Security Less Secure
With Election Day two weeks away, my series of posts on the Romney-Ryan budget plan is drawing to a close. Today I’m writing about the changes GOP candidates Mitt Romney and Paul Ryan have in store for Social Security, and in my final post I’ll cover other social programs on the chopping block and call attention to who stands to profit should Romney’s sketchy deal become reality.
First, any meaningful discussion of Social Security calls for the airing of three simple truths:
Truth #1 – Social Security has played a major role in reducing poverty in the United States for 75 years. Today, one in every six U.S. residents collects Social Security benefits. Included in this group are retirees, people with disabilities and young survivors of deceased parents. According to the Center on Budget and Policy Priorities, the program keeps 21.4 million women, men and children from living in poverty. People like Social Security because it works and it’s reliable. Wall Street is risky. But Social Security hasn’t missed a payment since the first benefit was issued in 1937.
Truth #2 – Social Security is even more important to women because we live longer than men and typically retire with less savings than men. When you think about it, it’s not hard to see why that is so. On average, women are paid less than men, either due to outright wage discrimination or because women are clustered into low-paying fields. Over a lifetime, this disparity really adds up. Additionally, women are less likely than men to work for employers that provide pensions, and we often take time out of the paid workforce to care for children or other family members. Women of color retire at an even greater economic disadvantage than white women.
Truth #3 – Wealthy conservatives have been after Social Security since its inception. This is not a delusion — it’s a fact. For decades, right-wing think tanks have hatched several key myths and sound bites that politicians have repeated over and over again: The program is going bankrupt; the money’s gone; it’s a Ponzi scheme. These messages have sunk so deeply into the consciousness of this nation that you often hear people under 40 or even 50 state that “Social Security won’t be there for me when I retire.” Encouraged financial moguls and their congressional water-carriers have made numerous moves toward privatizing Social Security, including a big push in the 1980s and again under the presidency of George W. Bush.
Here’s a compelling way of looking at the situation: Truth #1 — the success of Social Security and its corresponding support from voters — has prevented Truth #3 from producing any concrete progress. But Truth #2 keeps the efforts of Truth #3 alive — meaning, conservative elites are much more likely to continue trying to dismantle a social insurance system that disproportionately benefits women and particularly women of color. It’s so much easier to funnel other people’s money into the risky stock market when you truly do see them as different, undeserving, not peers — literally as “the Other.”
It should come as no surprise, then, that Romney and Ryan share the right-wing thirst for converting Social Security to a private program under which billions of previously safeguarded dollars would flow into Wall Street traders’ hands. But these guys know their agenda is so deeply unpopular with the vast majority of voters that they have to tread very carefully, blurring their ultimate goal.
So, the Romney-Ryan budget plan is fairly cryptic on the subject. Here’s what it has to say: “[T]his budget calls for action on Social Security by requiring both the President and the Congress to put forward specific ideas and legislation to ensure the sustainable solvency of this critical program.” The budget raises suggestions such as “reforms that take into account increases in longevity, to arrest the demographic problems that are undermining Social Security’s finances.” In other words, raise the retirement age. The Romney-Ryan plan claims that “[t]he solutions are clear,” but it doesn’t really commit to anything specific.
The Oct. 11 vice presidential debate did offer a glimpse at the contrasting philosophies held by those who want to quell the panic and take responsible steps toward protecting and improving Social Security versus those who want to stir up enough public distrust in the system that gambling on Wall Street will seem like a viable alternative.
When asked about the program, Rep. Paul Ryan pulled out a string of classic right-wing scare tactics: “If we don’t shore up Social Security, when we run out of the IOUs, when the program goes bankrupt, a 25 percent across-the-board benefit cut kicks in on current seniors in the middle of their retirement.”
Vice President Joe Biden replied: “If we had listened to Romney, Governor Romney, and the congressman during the Bush years, imagine where all those seniors would be now if their money had been in the market.”
Ryan pulled out the standard caveat that he’s not talking about changing the system for people who have already retired or are about to retire: “[W]hat I’ve always agreed is let younger Americans have a voluntary choice of making their money work faster for them within the Social Security system.”
But what about the single mom — one of Ryan’s “younger Americans” — who’s working two jobs trying to support her family when suddenly all the money in her private retirement account is gone because Wall Street had another collapse? Now she has to start all over again. Is that fair? Is it even remotely wise to put the people of our nation, the people who drive our economy, at such risk?
Romney and Ryan know that there is no compelling reason to turn Social Security over to the private market. Those with enough money to invest in the market can already do so. But most people need the economic security that comes from a stable system of retirement insurance that isn’t out to make its shareholders rich.
You may be asking yourself at this point: But isn’t Social Security in danger of falling behind, now that the Baby Boomers are starting to retire? Don’t we need to do something?
Yes, we do. But we don’t have to settle for what the privatizers are selling us. After all, they’re working for the one-hundredth of one percent, not us. In fact, the elites’ lobbyists have produced policies that are draining money from the Social Security trust fund. According to the Economic Policy Institute, “Low- and middle-income workers and their families would have had far better income growth over the past 30 years if economic policies had not directed the fruits of economic growth to the highest-income Americans.” In effect, fairer wages would have resulted in more payroll taxes going into the system for the last three decades.
Elites, meanwhile, have enjoyed drastically lower payroll tax rates than the rest of us. Currently, there is a cap on the amount of a worker’s wages that are subject to Social Security deductions: If you make less than $110,100, all of your salary is in play; if you are paid more than that, everything over $110,100 is in the clear. For most of us, the payroll tax is about six percent. But for someone earning $1 million per year, it’s 0.6 percent! You see, as income in this country increasingly shifts to higher earners, less and less money flows into the Social Security pool.
This May, the National Organization for Women Foundation put out a report along with the National Committee to Preserve Social Security and Medicare Foundation and the Institute for Women’s Policy Research. Unlike the Social Security raiders, we see the good in the system — its strengths and potential. Breaking the Social Security Glass Ceiling: A Proposal to Modernize Women’s Benefits presents 10 improvements, such as providing credits for caregivers, that would make Social Security more equitable while safeguarding benefits for women. Simply eliminating the cap on payroll contributions would pay for the vast majority of these improvements and ensure the system’s solvency for at least 75 years. A higher minimum wage and a lower unemployment rate would pay for the rest by creating higher payrolls, thus more contributions into the system. Small tweaks in the payroll tax rate are also both feasible and promising.
Big business and the wealthy, who have an outsized influence on our discourse, will fight tooth and nail against common-sense options like these. They will generously fund the campaigns of their wealthy friends, like Mitt Romney and Paul Ryan, and do all they can to control the media outlets from which the voters get their information.
Women like Linda, who would be completely dependent on her daughter if it weren’t for her monthly Social Security check, rarely have a voice in this process. But they do have a voice at the polls on Election Day. The people’s greatest defense against attacks on Social Security is our voting power. And politicians know it.
That is why Romney and Ryan are working so hard to downplay their Social Security plans. But we need to send them the message that women are not fooled. We may not have access to their billions of dollars, but we can and must use our votes to let them know: Social Security is ours, and we will continue to protect it for generations to come.
By: Terry O’Neil, President, National Organization for Women; The Huffington Post, October 22, 2012
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