Joplin And Natural Disasters: They’re Called “Emergencies” For A Reason
I’ve been writing a lot this week about congressional Republicans’ new approach to disaster relief funds in large part because I find it rather amazing, even for a contemporary GOP that no longer seems capable of surprising.
For all of our differences over party, ideology, and creed, we know that when disaster strikes and our neighbors face a genuine emergency, America responds. We don’t ask what’s in it for us; we don’t weigh the political considerations; we don’t pause to ponder the larger ideological implications.
We act. It’s who we are; it’s what we do.
The problem isn’t that conservative Republicans necessarily disagree with this principle. Rather, the problem is, they place other principles above this one when prioritizing how and whether to act.
While much of Joplin, Mo., is still under rubble from a devastating tornado, conservatives in Congress are starting to argue for a tougher approach to disaster aid, demanding that any funding be offset by cutting federal money elsewhere.
Disasters will no longer be considered “emergencies” if conservatives win this battle to redefine the way Congress funds aid packages for states and cities stricken by natural and man-made catastrophes. […]
Traditionally, the government has responded to disasters — hurricanes, tornadoes, floods and acts of terrorism — by using its power of the purse to aid the affected areas with “emergency” dollars that add to the debt because they don’t count against annual spending caps.
When hurricanes Katrina and Rita slammed into Louisiana and Mississippi in 2005, a vocal minority in the House called for offsetting tens of billions of dollars of spending with cuts to other programs. At the time, House Republican leaders shut them down. But now, as much of the Southern and Midwestern parts of the country have been hit by a series of catastrophic acts of nature, that vocal minority has become a controlling majority — at least in the House.
It was House Majority Leader Eric Cantor (R-Va.) who presented the new way of looking at disaster relief. He was willing to approve a $1 billion emergency package for Southwest Missouri, but on a condition — he wanted to cut money from a clean-energy program to pay for it. His party agreed.
The callousness becomes even clearer in the larger context. If the oil industry wants taxpayer subsidies, conservative Republicans don’t blink, and certainly don’t wonder how we’ll pay for the incentives. When Wall Street needed a bailout, the entire Republican leadership was on board with writing a very large check, without much thought to fiscal responsibility.
But when working-class communities get slammed by a natural disaster, through no fault of their own, suddenly the GOP grows miserly. Republicans’ first thought isn’t, “How can we help these struggling Americans get back on their feet?” Instead, it’s, “How will we block disaster relief aid unless we get corresponding spending cuts?”
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, May 27, 2011
John Boehner’s Unreality Check On The Deficit
The news out of House Speaker John Boehner’s speech to the New York Economic Club was his demand for “cuts of trillions, not just billions” before the debt ceiling can be raised. Not just broad deficit-reduction targets, the Ohio Republican insisted, but “actual cuts and program reforms.”
That’s alarming enough. It is all but impossible to get this done in the available time. It certainly can’t be accomplished on Boehner’s unbending, no-new-taxes terms. And if the speaker truly believes that it would be “more irresponsible” to raise the debt ceiling without instituting deficit-reduction measures than not to raise it at all, we’re in a heap of trouble.
Even more alarming, because it has consequences beyond the debt-ceiling debate, is the incoherent, impervious-to-facts economic philosophy undergirding Boehner’s remarks.
Reporters naturally tend to ignore this boilerplate. Journalistically, that makes sense. Boehner’s economic comments were nothing particularly new. Indeed, they reflect what has become the mainstream thinking of the Republican Party. But that’s exactly the point. We become so inured to hearing this thinking that we neglect to point out how wrong it is.
My argument with Boehner is not that he believes in a more limited role for government than I do, not that he is more skeptical of government intervention and regulation, and not that he is more worried about the economically stifling implications of tax increases. Those are legitimate ideological differences. American politics is better off for them.
I’m talking about statements that are simply false.
“The recent stimulus spending binge hurt our economy and hampered private-sector job creation in America.”
Reasonable economists can disagree about the effectiveness of the stimulus spending and whether it was worth the drag of the additional debt, but no reasonable economist argues that it hurt the economy in the short term.
The Congressional Budget Office estimates the stimulus added, on average, about one percentage point annually to economic growth and reduced the unemployment rate by half a point between 2009 and 2011. And that’s the low-end estimate. The high-end numbers show the stimulus spending adding more than 2 percentage points annually to economic growth and cutting the unemployment rate by more than 1 percentage point.
The CBO is not alone. Economists Alan Blinder and Mark Zandi estimated in a July 2010 paper that without the stimulus spending, the unemployment rate would be 1.5 percentage points higher.
“The massive borrowing and spending by the Treasury Department crowded out private investment by American businesses of all sizes.”
Crowding out occurs when government spending drives up interest rates and makes borrowing unattractive to the private sector. As economist Joseph Minarik of the Committee for Economic Development explains, “When interest rates are on the floor, you can’t say federal government borrowing is crowding out business investment.” The lackluster investment climate reflects low consumer demand and underutilized capacity. You can’t be crowded out of a room you’re not trying to enter.
“The truth is we will never balance the budget and rid our children of debt unless we cut spending and have real economic growth. And we will never have real economic growth if we raise taxes on those in America who create jobs.”
Never? Under President Clinton, taxes were raised, primarily on the wealthy. During the eight years of his administration, the economy grew by an average of close to 4 percent.
“I ran for Congress in 1990, the year our nation’s leaders struck a so-called bargain that raised taxes as part of a bipartisan plan to balance the budget. The result of that so-called bargain was the recession of the early 1990s. It wasn’t until the economy picked back up toward the end of that decade that we achieved a balanced budget.”
Boehner blames the budget deal for tanking the economy, but the recession actually started in July 1990, two months before the agreement was reached. And that revived economy? It came despite the supposed dead weight of the Clinton tax increase.
“A tax hike would wreak havoc not only on our economy’s ability to create private-sector jobs, but also on our ability to tackle the national debt.”
During the early 1980s, taxes were cut and public debt ballooned, from 26 percent of GDP in 1980 to 40 percent by 1986. In 1993, taxes were increased (and spending cut); debt as a share of the economy fell, from 49 percent to 33 percent. In 2001 and 2003, taxes were cut. By the time President Obama took office, debt had climbed to 40 percent of GDP.
Listening to Boehner, I began to think the country suffers from two deficits: the gap between spending and revenue, and the one between reality and ideology. The first cannot be solved unless we find some way of at least narrowing the second.
By: Ruth Marcus, Opinion Writer, The Washington Post, May 10, 2011
Boehner The Extortionist: “Give Us Trillions In Cuts In Medicare and Medicaid Or We Blow Up The Economy”
Stripped of its politician’s gloss, this is the message that House Speaker John Boehner delivered to Wall Street Monday in discussing the price Republicans demand for raising the debt ceiling.
Boehner portrays himself as a reluctant extortionist: “It’s true that allowing America to default would be irresponsible.” But he told the barons of Wall Street he has no choice. The Tea Party made him do it: “Washington’s arrogance has triggered a political rebellion in our country. And it would be more irresponsible to raise the debt ceiling without simultaneously taking dramatic steps to reduce spending and reform the budget process.”
Notice the Speaker’s phrasing. He curses deficits and debt but he isn’t focused on them. He is focused on “our spending addiction.” “Everything is on the table,” he says, “with the exception of tax hikes.”
And even that is a half-truth, since Boehner and his party have also no appetite for real cuts in the defense budget. Boehner isn’t pushing to get out of Iraq and Afghanistan and roll back the costly U.S. global police role. In the budget that Boehner pushed through the House, Republicans voted to give the Pentagon back most of the relatively nominal defense cuts that Defense Secretary Robert Gates had projected over the next years. And many harshly censored the president for suggesting that another $400 billion in cuts might be chipped out of the more than $8 trillion the Pentagon will spend over the next 12 years.
So if tax hikes aren’t allowed—even though the wealthiest Americans are now paying a lower effective tax rate than their chauffeurs—and defense cuts are off the table, how does Boehner propose to get “trillions” in spending cuts? Medicare and Medicaid get the ax. Or as Boehner puts it in politician speak, “Everything on the table” includes “honest conversations about how best to preserve Medicare.”
The budget math is inescapable. The federal government, as Paul Krugman puts it, is basically an insurance system for our retirement years that also has an army. About half of the government’s spending is in retirement programs—Social Security, Medicare, much of Medicaid and other insurance programs. Defense is half of the rest. All of the rest of government —public health, environmental protection, the IRS, the FBI and Justice Department, education, Pell grants, roads, health research, R&D—consumes the last fourth. When Republicans take taxes and defense off the table, and call for trillions in spending cuts and you have no choice but to go after Medicare, Medicaid and/or Social Security.
Which of course is what they are doing. The House budget cuts nearly $800 billion out of Medicaid over the next five years—and ends Medicare as we know it.
There is a bitter irony to this. The current deficits stem largely from three sources—the Bush tax cuts, the two wars that were fought on the tab, and the Great Recession that cratered tax revenues and lifted spending on everything from unemployment to food stamps to the recovery spending. Boehner argues that “adding nearly a trillion to our national debt—money borrowed mostly from foreign investors—caused a further erosion of economic confidence in America.” But he ignores the trillions added to the debt by the Bush tax cuts, the wars and the Great Recession, focusing only on the Obama recovery spending, which made the smallest contribution of all of these to the deficits. And, he rules out reversing the top-end tax cuts or cutting the military spending to address the deficits that they helped to create. (And if we actually adopt his policies, he’s likely to extend the Great Recession as well).
Boehner argues that adopting his position would show that Washington is “starting to get the message” from the American people. But Boehner isn’t hearing what most Americans are saying. Americans are concerned about deficits, and they are certain that government wastes significant portions of their money. They also oppose the billions squandered on subsidies and tax breaks for Big Oil, Big Pharma, Agribusiness and the like—tax breaks that Republicans defend, arguing that repealing them constitutes a tax increase.
In fact, the vast majority of Americans don’t agree with Boehner’s priorities. The Campaign for America’s Future, which I help direct, has started an American Majority campaign to remind the media of this fact. Three quarters oppose cutting Medicare to help balance the budget. Two thirds oppose raising the retirement age. Three fourths oppose cutting state funding for Medicaid. Over 60 percent favor raising taxes on those making over $250,000 to help reduce the deficit. A growing majority think defense cuts ought to be on the table.
Boehner wants to extort his cuts now—at a time when the economy is struggling, and the country is suffering from mass unemployment. With interest rates near record lows, the construction industry idle and our infrastructure in deadly state of disrepair, the country would be well advised to use this occasion to invest in rebuilding the country, and put workers back to work.
Instead, Boehner offered Wall Streeters a shower of conservative shibboleths, stuck randomly like pieces of lint on a serge suit. “The massive borrowing and spending by the Treasury Department crowded out private investment by American businesses of all sizes,” he argued to what must have been a bemused audience well aware that with interest rates low, and business sitting on trillions in capital waiting for demand to pick up, the only “crowding out” comes from ideology displacing reality in Boehner’s head..
Boehner argues that business people crave stability. Even the mere threat of tax hikes causes them to retreat from investments they might otherwise make. Regulatory changes are similarly disruptive:
“For job creators, the ‘promise’ of a large new initiative coming out of Washington is more like a threat. It freezes them. Instead of investing in new employees or new equipment, they make the logical decision to stand pat.” Sadly, Boehner didn’t explain why the threat to blow up the economy if he can’t get trillions in unidentified spending cuts doesn’t constitute the “promise” of a large new initiative coming out of Washington.”
What happens now? Boehner’s position is untenable. He is holding a hostage—the economy—that he dare not shoot. He is demanding trillions in cuts from programs that he dare not name. He is looking for a back room negotiation in which he can get the president to give him cover in enacting cuts that are unpopular to the American people and likely to be ruinous to the economy. If the president falls for it, Republicans make progress in dismantling the Medicare program that they have always opposed, and the president takes the rap for the bad economy.
What’s to be done? Jonathan Chait gets it right. The president—and the country—would benefit from an open discussion, not a backroom negotiation. The president needs to call Boehner out. What are the trillions in cuts that he wants as the price for letting the economy go free? If he lays them out, as in passage of the House budget plan that ends Medicare as we know it, the President can show Americans why they are unacceptable, and use the bully pulpit to take the case to the country. If Boehner isn’t prepared to lay out his cuts, call his bluff. Surely he can’t long threaten to cripple the economy if he doesn’t get cuts that he isn’t prepared to define.
One thing Boehner says rings true. Americans are sick of the arrogance in Washington. But it is hard to imagine a more arrogant politician than one threatening to blow up the economy if he doesn’t get his way.
By: Robert Borosage, CommonDreams.org, May 10, 2011
How Grover Norquist’s Pledge Blocks Real Deficit Cuts
Eli Lehrer has an incisive piece on this page about Tom Coburn’s “Gang of Six” tax proposals. I believe however that the proposals deserve a warmer endorsement than Eli offers.
An important cause of America’s long-term debt problem is the intellectual cul-de-sac into which Republicans have driven themselves. Republicans have accepted a total ban on any kind of tax increase as party orthodoxy. And they have submitted to the authority of Grover Norquist of Americans for Tax Reform to determine what constitutes a “tax increase.”
Norquist takes the view that any action that increases the revenue column of the federal government must be deemed a tax increase – and that such increases are only permissible if they are offset by an equivalent cut to the spending column.
The trouble is that a lot of federal spending – especially the spending done by Republicans – takes the form of tax remission.
The federal government offers a tax credit of up to $9,500 for the purchase of plug-in electric cars. How exactly is that different from writing a check to every plug-in buyer? Yet canceling this program would count as a tax increase under Grover Norquist’s test.
Adopt a child and you can qualify for a tax credit of up to $13,100. You can even get credit for the cost of meals and lodging while traveling in a foreign country to receive the child. You can say a lot of things about this measure. But is it a “tax cut”? Hardly.
Enrolled in college or university? You can deduct up to $4,000 of qualified tuition expenses.
Over 65? Or disabled? Adjusted gross taxable income of less than $17,500? Tax credit for you.
And so on. The point is not that these tax expenditures are all necessarily ill-advised. (It’s genuinely more expensive to be disabled, and public money to help the disabled cope with the costs imposed on them by nature or accident seems a reasonable response by a civilized society.) The point is: they are expenditures, disguised as tax cuts.
This point – so obvious with the smaller tax expenditures – is true also of many of the larger tax expenditures, even if familiarity blinds us to the fact. Mortgage interest deductibility and the tax exclusion of employer-provided fringe benefits: these are subsidies too, no less subsidies for being widely rather than narrowly used.
Yet on the Norquist system and by the Norquist rule, the US cannot address these subsidies contained in the tax code unless and until they are simultaneously matched exactly with other subsidies and benefits that happened to have been framed as outlays. Economically, the rule makes little sense. Politically, it has the job of making deficit reduction twice as difficult as it needs to be. With consequences that …. well let’s leave that for a second post.
By: David Frum, Frum Forum, April 25, 2011
We Don’t Have A Spending Problem, We Have A Fraud Problem
Conservatives seem to have a knack for changing the subject whenever their backs are up against the wall. Over the last several weeks, there has been an orchestrated chorus by the House Republicans in particular to define the so-called “deficit problem” in terms of a wild spending binge by the federal government and the Obama administration. They seem to have easily forgotten who got us into this mess in the first place. That aside, everyone from Speaker John Boehner to Sen Mitch McConnell have been bellowing throughout the halls of Congress and at every available microphone that “We don’t have a revenue problem, we have a spending problem”.
It’s amazing how we all have bought into this line. The media, in its usual rush to get a headline or sound bite, immediately picked up this line and has been the waterboys for the GOP by enabling this hoax on the American people. The focus in most circles has been on spending cuts. Well, we need to re-characterize what is actually going on here. We don’t have a spending problem..we have a fraud problem.
This fraud has been played on the American people by an ideologically depraved Republican party for at least the last ten years. They have made everybody believe that if we just make the wealthy wealthier, somewhere down the road, we will all benefit. There would be job creation with full employment, small businesses would thrive, home prices would fall, gas would cost less than two dollars a gallon and there would be a chicken in every pot. And we believed it hook, line and sinker. Now we are back to square one. None of these things have happened except the fact that we have indeed made the wealthy wealthier. In 2010, the 400 Americans with the highest adjusted gross revenue incomes averaged $345 million. The average federal income tax was 17%, down from 26% in 1992. The income gap just keeps getting wider. Why does this continue to happen? Because we let it happen.
Just last week, Standard and Poor’s accentuated the Republican clarion that the sky is falling. This call comes from the same S&P who supported every toxic waste subprime security under the sky, the same S&P who sold its ratings to the highest bidder. Regulators have also assisted the GOP in their fraud. The Office of the Currency has gone out of its way to protect its clients, ie the banks. Efforts to reign in the banks and stop their predatory loan practices have been foiled at every turn. Even the banks are too big to fail. Profits for banks, corporations, CEO’s, Wall St and the wealthy just keep soaring. There is a lot of back scratching going on here, by and for a lot of wealthy people.
Now that the cat is out of the bag, all of these wealthy people are trying to figure out a way to take the spot light off themselves. They are beginning to see that they may not be able to stave off demands any longer that they pay their fare share. People who have been adversely affected for so many years are now demanding that this fraud be stopped. Teachers and other low wage earners, the poor, seniors, students and union members have all come to believe that they have sacrificed enough. Even some tea party members are beginning to see the light.
For too many years, the Republicans and their wealthy friends have had their hands in everybody’s pockets. Your pocket was the revenue stream for them. General Electric and the Koch Brothers were probably happier than anyone. The Republicans were also happy because their happy friends provided the cover that allows them to do whatever they want to in terms of policy. Being the ideologues that they are, this protection gives them unimpeded opportunity to push forward with their agenda, from dissolving women’s rights, overturning the Affordable Care Act, union busting, replacing Medicare with vouchers and completely eliminating any sense of environmental protection just to name a few. With happy and contented wealthy backers behind you for so many years, how could you go wrong. My, how things are changing.
The revenue stream that the Republicans have depended on for so long is now drying up…that stream is you. They are finding that when they put their hands in your pockets now, they are feeling the seam of the sewn pocket. There just isn’t any more money there. They become flushed and filled with extreme panic, finally realizing that they are going to have their taxes raised after all these years. Their backs are against the wall. So what do they do now? Change the debate..”Let’s raise taxes on everybody”. Nice try!
It’s well past time that shared sacrifice mean exactly what it says. It is no longer acceptable that the poor, under privileged, seniors and the disenfranchised continue to carry the load for corporations, Wall St and their deadbeat tax-evading friends. No, let’s not raise taxes on everybody. Let’s end the fraud and insist that the wealthy start paying taxes just like everyone else. This being Easter Sunday, this may be a good symbolic time to increase taxes only for the rich. We should leave that rate in place for oh say, the next 40 years. Besides, they have accumulated a fair amount of wealth over the years and should easily be able to live off that profit during that time. Perhaps take a trip or two or just wander around the world enjoying their spoils. We will pledge to re-visit this issue after that time. If, and only if, the middle class has reached a level playing field, then we can talk about lowering the tax rate for the wealthy. I think Moses and the Pharaoh’s would be happy with this compromise. So it is written, so let it be done.
By: raemd95, mykeystrokes.com, April 24, 2011
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