Sen. Olympia Snowe Does Not Understand Budgets
It seems Sen. Olympia Snowe (R-ME) isn’t even trying to make sense any more:
Fiscal shenanigans such as permanent tax increases to pay for one-year temporary measures are precisely the problem that drove our nation into a $15 trillion debt crisis.
Huh? Passing a permanent tax increase to pay for a temporary measure would, logically, decrease debt, not increase it.
And, indeed, if we look back over history, we don’t see “permanent tax increases” as drivers of debt. Tax cuts, on the other hand — like those signed by Ronald Reagan and supported by Olympia Snowe and those signed by George W. Bush and supported by Olympia Snowe — have contributed to increasing deficits and debt. Meanwhile, tax increases — like those signed by Bill Clinton and opposed by Olympia Snowe in 1993 —reduced deficits.
Given Snowe’s ongoing embrace of Tea Party Economics and shunning of basic economic concepts —not to mention her record of supporting measures that increased the deficit and opposing things that cut it — it isn’t surprising that she’d adopt the up-is-down, black-is-white economic fantasy that tax increases cause deficits and tax cuts increase revenue. But it should help put to rest the notion that she’s some kind of “moderate” or “sensible” Republican.
By: Jamison Foser, Media Matters Political Corrections, December 7, 2011
Morgan Stanley Executive Calls For Higher Taxes On The Rich: ‘We Cannot Cut Our Way To Greatness’
Several wealthy bankers, investors, and entrepreneurs have called for higher taxes on the rich as an important part of reducing the nation’s deficit, led most prominently by Warren Buffett. “It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again,” wrote wealthy entrepreneur Nick Hanauer in an op-ed last week. “Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.”
Joining the list of those in financial positions of power that are calling for higher taxes on the rich is Morgan Stanley Chief Financial Officer Ruth Porat who, as the Huffington Post’s Bonnie Kavoussi reported, said over the weekend that it’s “inappropriate” that income inequality in the country is continuing to grow while taxes on the rich stay low:
“The wealthiest can afford to pay more in taxes. That’s a part of the deal. That makes sense. I don’t know anyone that doesn’t agree with that,” Porat said. “The wealth disparity between the lowest and the highest continues to expand, and that’s inappropriate.” “We cannot cut our way to greatness,” she added.
The rising compensation of executives and those in the banking industry is one of the major factors driving the nation’s income inequality. And at the same time that the rich have been getting richer, their tax rates have been plummeting. It’s refreshing to hear someone in the banking industry acknowledge these truths and want to rectify them, rather than decrying higher taxes on the rich as akin to the Nazi invasion of Poland.
By: Pat Garofalo, Think Progress, December 5, 2011
Has Grover Norquist Made Himself Unnecessary?
Republicans don’t need to be threatened into supporting tax cuts for the wealthy.
You should read Tim Dickinson’s long article in Rolling Stone about how the GOP became the party of the one percent. Essentially, the story is that while there was once a real substance to the idea of “fiscal conservatism”—that Republicans really did care about balancing the books and being good stewards of the public’s tax dollars—the last 20 years have brought the Republican Party to a much different place. While they once saw taxes as simply the way to pay for the things government does — they shouldn’t be too high, since conservatives want limited government, but they shouldn’t be so low that we run up deficits — they now see them as an outright evil that really has nothing much at all to do with deficits. Deficits are a handy tool to use when there’s a Democrat in the White House to force spending cuts, but not much more. Dickinson puts Dick Cheney at the center of this story, which one could quibble about, but there’s something here that I think calls for some discussion:
In retrospect, the true victor of the midterm elections last year was not the Tea Party, or even Speaker of the House John Boehner. It was Grover Norquist.
“What has happened over the last two years is that Grover now has soldiers in the field,” says [Bruce] Bartlett, the architect of the Reagan tax cuts. “These Tea Party people, in effect, take their orders from him.” Indeed, a record 98 percent of House Republicans have now signed Norquist’s anti-tax pledge – which includes a second, little-known provision that played a key role in the debt-ceiling debacle. In addition to vowing not to raise taxes, politicians who sign the pledge promise to use any revenue generated by ending a tax subsidy to immediately finance – that’s right – more tax cuts.
We often use this kind of language when talking about special interests, that members of Congress are “taking orders” from one group or another, but it can be misleading. It’s true that part of the genius of Norquist’s pledge is that it imposes a potential cost on any Republican who either refuses to sign it or votes for a tax increase after they have signed it. That cost is the risk of a well-funded primary campaign from the right, and many Republicans certainly fear it. But more important is that today’s Republicans, particularly the younger ones, believe it. You don’t have to threaten them to get them to keep working to cut rich people’s taxes, because they want nothing more. They came up through the party at a time when tax cuts for the wealthy was moving closer and closer to the center of conservative ideology. Today, there is nothing—not a belligerent foreign policy, not opposition to legal abortion, not support for large military budgets, not support for gun rights—that goes deeper to the core of conservative identity. The Republican Party will tolerate some small measure of dissent on almost anything else (there are still a few pro-choice Republicans hanging around, for instance), but not on tax cuts. If you don’t think the rich should pay less than they do, then you can’t call yourself a conservative in 2011.
Grover Norquist played a very important role in pushing along the evolution in the party that led them there. But at this point, his pledge is almost unnecessary. He acknowledges that himself: “‘It’s a different Republican Party now,’ he says. Norquist even goes so far as to liken the kind of Republicans common in Reagan’s day—those willing to raise taxes to strengthen the economy—to segregationists. The ‘modern Republican Party,’ he says, would no sooner recognize a revenue-raiser than the ‘modern Democratic Party would recognize George Wallace.'”
And it’s likely to stay that way for some time. If you’re a young Republican rising through the ranks — let’s say you’ve got your eye on a state rep seat, and you hope to run for Congress in 10 years—you’re marinating in a conservative world where tax cuts for the wealthy are the highest good. You don’t need to be threatened or cajoled into believing it. You’ve been convinced.
By: Paul Waldman, The American Prospect, November 17, 2011
Olympia “Snowe” Keeps Falling
Sens. Olympia Snowe (R-Maine) and Jeff Sessions (R-Ala.) published a joint op-ed in the Wall Street Journal the other day, calling for new measures to make the legislative process more difficult. No, seriously, that’s what they said.
For two years in a row, the Democratic-led Senate has failed to adopt a budget as required by law. Meanwhile, our gross national debt has climbed to almost $15 trillion — as large as our entire economy. Our bill puts in place a 60-vote threshold before any appropriation bill can be moved through Congress — unless both houses have adopted a binding budget resolution.
We can certainly have a conversation about the breakdown in the budget-writing process, but let’s think about what Snowe and Sessions are proposing here: they want to make it harder for Congress to approve appropriations bills, regardless of the consequences.
Jamison Foser explained, “Republicans, including Sessions and Snowe, have filibustered even the most uncontroversial of measures — and that knee-jerk opposition to just about anything the Senate majority wants to do is a significant part of the reason why the Senate hasn’t adopted a budget. Now Sessions and Snowe cynically use that failure to justify structural changes that would make it harder for the Senate to pass any appropriations bills.”
Snowe and Sessions went on to call for additional “reforms” that would make it far more difficult for Congress to approve “emergency” spending without mandatory supermajorities, too, because they’re horrified by efforts to “spend money we don’t have,” which might “bankrupt the country.”
Of course, Snowe and Sessions see no need for mandatory supermajorities when it comes to tax cuts, alleged “bankruptcy” fears notwithstanding.
But in the larger picture, have you noticed just how far Olympia Snowe has fallen lately? Last week she demanded the administration act with “urgency” to address the jobs crisis, only to filibuster a popular jobs bill just one day later. A week earlier, Snowe prioritized tax cuts for millionaires over job creation. Just a couple of weeks earlier, Snowe tried to argue that government spending is “clearly … the problem” when it comes to the nation’s finances, which is a popular line among conservatives, despite being wrong.
It’s tempting to think the fear of a primary challenge is pushing Snowe to the far-right, but the truth is, the senator’s GOP opponents next year are barely even trying. She may fear a replay of the Castle-O’Donnell fight that played out in Delaware, but all indications are that Snowe really doesn’t have anything to worry about.
And yet, she’s become a shell of her former self, leading to this op-ed — written with a right-wing Alabama senator, no less — demanding that the dysfunctional Senate adopt new ideas that make it more difficult to pass necessary legislation.
There is some prime real estate in the political landscape for genuine GOP moderates who could have a significant impact. Instead, Congress has Olympia Snowe, who now bears no resemblance to the centrist she used to be.
If I had to guess, I’d say most mainstream voters in Maine have no idea of the extent to which Snowe has moved to the right, which is a shame. I wonder how those who supported her in the past would even recognize her anymore.
By: Steve Benen, Washington Monthly Political Animal, October 25, 2011
The GOP’s Latest Tax Gimmickry: Soak The Poor
It’s one of the strangest things in our politics: The only “big” ideas Republicans and conservatives seem to offer these days revolve around novel and sometimes bizarre ways of cutting taxes on rich people.
Given all the attention that Herman Cain’s nonsensical and regressive 9-9-9 tax plan has received, the Republican debates should have as their soundtrack that old Beatles song that droned on about the number nine.
Now, Texas Gov. Rick Perry hopes to pump up his campaign with a supposedly bold proposal to institute a flat tax, which would also deliver more money to the well-off. Perry plans to outline his proposal this week, but he has already touted it as a sure-fire way of “scrapping the 3 million words of the current tax code.”
There is absolutely nothing new about this idea, and candidates who pushed flat taxes in the past saw their campaigns flat-line, most prominently businessman Steve Forbes in 1996 and again in 2000. Politically, the idea falls apart rather quickly when middle-income voters realize that its main effect is to cut taxes on the financially privileged while usually raising them on Americans who have more modest incomes.
Note to Perry: Voters are shrewd in figuring out whether tax proposals really benefit them. That’s why raising taxes on millionaires — the exact opposite of what Cain and Perry want to do — wins support from a broad majority.
But the more interesting question is: Why are today’s Republicans so enthralled by tax gimmicks? Their party, after all, was once innovative in thinking about affirmative uses of government. The Grand Old Party instituted the Homestead Act and created land-grant colleges, the interstate highway system, student loans, the Pure Food and Drug Act and even a prescription drug benefit under Medicare.
It was Richard Nixon who supported laws establishing the Environmental Protection Agency and the Occupational Safety and Health Administration. In signing the OSHA bill, Nixon called it “one of the most important pieces of legislation, from the standpoint of 55 million people who will be covered by it, ever passed by the Congress of the United States, because it involves their lives.” Yes, government regulations save lives, a view now heretical in the GOP.
Republicans have boxed themselves into a rejection of both their own traditions and the idea that government can do any good. Thus they have confined themselves to endless fiddling with the tax code. Almost everything conservatives suggest these days is built around the single idea that if only government took less money away from the wealthy, all our problems would magically disappear.
There is a history to this. The Republican fixation on taxes dates to the mid-1970s, when supply-side economics began taking hold. The late Jude Wanniski, an editorial writer for the Wall Street Journal who campaigned indefatigably on behalf of lower marginal tax rates, came up with the “Two Santa Clauses” theory. He argued that if Democrats earned support by giving voters benefits through government programs, Republicans should play Santa by giving people tax cuts.
Wanniski sold his tax ideas to Jack Kemp, one of the most ebullient political figures of his generation, who in turn sold them to Ronald Reagan. Reagan made Kemp’s 30 percent tax cut (co-sponsored with Sen. Bill Roth) a centerpiece of his 1980 campaign. The political scientist Wilson Carey McWilliams perfectly described the result in a 1981 essay. “After years of learning that ‘you don’t shoot Santa Claus,’ ” he wrote, “the Republicans decided to nominate him.”
But Republicans have a problem now. In the Kemp-Reagan days, they were selling across-the-board tax cuts. Most of their benefits flowed to the rich, but almost everyone got a piece. Today, many Republicans complain resentfully that less prosperous Americans don’t pay enough in taxes — overlooking the fact that citizens who don’t pay income taxes still shell out a significant share of their earnings in payroll, sales and (directly or through their rents) property taxes.
Reagan’s optimism has thus been replaced by crabby put-downs of the less affluent. Perry said it directly in his announcement speech: “We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax.” Considering the other injustices in our society, this seems an odd and mean-spirited obsession.
“Tax the poor” is a lousy political slogan. That’s why Cain’s 9-9-9 plan and Perry’s flat tax are doomed to fail. Among conservatives, Santa Claus has given way to Scrooge.
By: E. J. Dionne, Opinion Writer, The Washington Post, October 21, 2011
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