“The Great Wall Of China On The Rio Grande”: The Real Costs Of Foolish Plans To ‘Secure’ The Border
Sen. Ted Cruz launched his bid for the Republican presidential nomination this week by promising to “finally, finally, finally secure the borders” and put an end to unauthorized immigration. This will warm the hearts of restrictionists, no doubt. But it should scare Americans who love their pocketbooks and liberties more than they hate undocumented Latino immigrants.
Restrictionists accuse many of these immigrants of being welfare queens who come to America illegally and live off taxpayers. Cruz has contributed to the hysteria by proposing bills barring undocumented workers from ever receiving any means-tested benefits, presumably even after they become legal.
Accusations that undocumented Latinos strain the welfare system are a red herring. If anything, immigrants, legal and illegal, constitute something of a welfare windfall. How? By coming to this country during their peak working years, after another society has borne the cost of raising and educating them, they save our system a ton of money. Studies generally don’t take this windfall effect into account, and still find that the economic contributions of low-skilled Latinos far outpace their welfare use. For example, a Texas comptroller study found that although unauthorized workers consumed about $504 million more in public services than they paid in taxes, without them, the Texas economy would shrink by 2.1 percent, or $17.7 billion. A full accounting of these folks would likely show them to be an even bigger economic boon (especially since the employment participation rate of Latino men is higher than the native born, and their overall welfare use is lower).
Meanwhile, as Cruz and his ilk whine about the (exaggerated) welfare costs of immigrants, they act as if their own plans to erect the Great Wall of China on the Rio Grande would be costless. Nothing could be further from the truth.
Cruz wants to establish “100 percent operational control” of America’s southern border by completing a double-layer fence on the entire 2,000 miles, tripling the size of the border patrol, and quadrupling the number of helicopters and cameras.
This is beyond ill conceived. First of all, 45 percent of all illegal immigrants are visa over-stayers. So Cruz’s efforts are totally irrelevant for nearly half of America’s illegal immigrants. What’s more, even the Berlin Wall, the most fortified border in modern history, was successfully breached 1,000 times every year. That rate will be a gazillion times greater on America’s southern border, which is not a barren, open expanse of land. In fact, it has a varied and rugged terrain with mountains and valleys and national parks (one the size of Rhode Island) and rivers that the wall will have to hop, skip, and jump around.
The Rio Grande has myriad tributaries that feed millions of people on both sides of the border. If Cruz’s wall is anything like the current 18-foot-high structure with rust-red hollow posts sunk six inches apart in a concrete base, it will have to stop several miles short on each side to avoid damming the watershed, leaving major openings for people to walk through.
And what would a double-wall cost taxpayers?
It is very difficult to get a full grip, but the construction cost alone of a single-layer fence on the 1,300 or so unfenced miles would likely be upwards of $6 billion (assuming, as per a CBO study, pedestrian fencing costs of $6.5 million per mile and vehicle fencing costs of $1.7 million per mile). Annual maintenance costs would be hundreds of millions more.
Tripling the number of boots on the ground wouldn’t be cheap either. President Obama has already deployed 20,000 border patrol agents, over twice more than he inherited. Tripling this number would cost a whopping $7 billion or so more a year since, according to the CBO, the annual cost of an agent is about $171,400.
And the bill in dollars pales in comparison to the price Americans will have to pay in lost liberties.
Conservatives are outraged when the government confiscates private property for environmental or other ends. Indeed, Nevada rancher Cliven Bundy, a vile man with retrograde views on race, became an instant conservative hero when he stood up to Uncle Sam and let his cattle graze on land that the federal government had, in his view, illicitly obtained. Yet Cruz and his ilk have no qualms about authorizing Uncle Sam to perpetrate an even bigger property grab in the name of their Swiss-cheese wall.
Over half of the recently constructed 700 miles of fence was on private property that Uncle Sam deployed blatant strong-arm tactics to obtain. It confiscated ancestral land that had been in families for over 200 years and offered virtually peanuts to Texas landowners who couldn’t afford to hire expensive lawyers to duke it out with Uncle Sam in court. Oscar Ceballos, a part-owner of a small trucking business, recounts how a government lawyer went so far as to figure out how much his assets were worth to dissuade a free legal clinic from representing him in his fight against the government’s ridiculously low-ball initial offer. Cruz’s even grander wall ambitions will only compound such abuse.
Nor would Americans on the border be the only ones affected. The vast majority of undocumented workers are here because there are Americans, especially employers, who benefit from their presence. Hence, Cruz and his fellow anti-immigration fighters want to force all American employers to verify the work eligibility of potential hires — American or foreign, legal or illegal — against a federal database through E-verify. Should this program become mandatory, all Americans will be effectively required to obtain a government permission slip to work.
What’s ironic about Cruz’s crusade to build a wall between two free — and friendly — people, divert billions of taxpayer dollars to militarize the border, and abrogate the civil rights of Americans is that he is doing so while vowing to “stand for liberty.”
If this is his idea of liberty, what would tyranny look like under President Cruz? (Don’t answer that — I hope to never find out!)
By: Shikha Dalmia, The Week, March 27, 2015
“What A Gig, And At Your Expense”: Aaron Schock Still Eligible To Collect Taxpayer-Funded Pension
Rep. Aaron Schock, who announced his resignation today under suspicion of misusing public money, will be eligible for more of it in retirement.
Schock, a Republican from Illinois, could eventually collect hundreds of thousands of dollars in taxpayer-funded retirement benefits, depending on how long he lives.
Starting at age 62, he will be eligible for just under $18,500 annually, according to estimates by the National Taxpayers Union, a conservative nonprofit organization.
Douglas Kellogg, a spokesman for the National Taxpayers Union, added that members of Congress are also eligible for a 401(k)-style plan, but it’s unknown whether Schock has chosen to participate in it.
According to a June report from the Congressional Research Service, members of Congress who have completed at least five years of service are eligible for taxpayer-funded pensions beginning at age 62.
The amount of a former congressional member’s pension varies, but the payout is based on the number of years of service and an average of the member’s three highest years of salary.
Being a former member of Congress carries other perks, too, including access to the House floor.
Schock, known as perhaps the nation’s fittest congressman and who once posed shirtless for Men’s Health, will also still be allowed to use the House gym — he’ll just have to pay a fee.
In recent weeks, Schock has been hit with repeated questions about his spending.
He repaid the government $40,000, money he spent redecorating his office along a theme inspired by “Downton Abbey,” a PBS historical drama, and fielded inquiries about his charter plane use, luxury overseas travel, personal photographer and concert tickets.
Today, Politico reported Schock has been reimbursed for more in mileage than his car had been driven.
“The constant questions over the last six weeks have proven a great distraction that has made it too difficult for me to serve the people of the 18th District with the high standards that they deserve and which I have set for myself,” Schock said in a statement today.
An email to Schock’s spokesman wasn’t immediately returned.
Schock was first elected in 2008. His resignation will abruptly end ongoing congressional ethics investigations into his activities, although federal prosecutors could conceivably pursue the matter. Schock has not been charged with any crime.
The Federal Election Commission could also probe related accusations that Schock misused campaign money.
By: Paige Lavender, The Blog, the Huffington Post, March 17, 2015
“Crime-For-Profit Syndicates”: Why Are We Taxpayers Subsidizing Corporate Crime?
“Do the crime, do the time,” the old saying goes. Unless, of course, the criminals are corporate executives. In those cases, the culprits are practically always given a “Get out of jail free” card.
Even the corporate crimes that produce horrible injuries, illnesses, death, massive pollution, consumer ripoffs, etc. are routinely settled by fines and payoffs from the corporate treasury, with no punishment of the honchos who oversee what amount to crime-for-profit syndicates. The only bit of justice in these money settlements is that some of them have become quite large, with multibillion-dollar “punitive damages” meant to deter the perpetrators from doing it again. Yet the same bad corporate actors seem to keep at it.
What’s going on here is a game of winkin’ ‘n’ noddin’, in which corporate criminals know that those headline-grabbing assessments for damages they’ve caused have a secret escape hatch built into them. Congress has generously written the law so corporations can deduct much of their punitive payments from their income taxes! As Senator Pat Leahy points out, “This tax loophole allows corporations to wreak havoc and then write it off as a cost of doing business.”
For example, oil giant BP certainly wreaked havoc with its careless oil rig explosion in 2010, killing 11 workers, deeply contaminating the Gulf of Mexico and devastating the livelihoods of millions of people along the Gulf coast. So, BP was socked with a punishing payout topping $42 billion. But — shhhh — 80 percent of that was eligible for a tax deduction, a little fact that’s been effectively covered up by the bosses and politicians.
This crazy quirk in America’s laws to deter corporate crime forces victims to help subsidize criminals. Follow the bouncing ball here: First, a court orders a corporation to pay punitive damages to a victim of its criminal acts; second, the corporate offender pays up, and then merrily subtracts a big chunk of that payment from its income tax, effectively taking money out of our public treasury; third, while the criminal is counting its tax break, the victim is notified that the punitive damage money he or she received from the corporation will be taxed as “regular income;” fourth, that means a big chunk of the victim’s payment goes into the treasury to replenish the public money the corporate villain subtracted.
This is nothing but shameful pandering by government officials to rich and powerful criminals. It’s bad enough that corporate-financed lawmakers legalize such encouragement of criminality, but corporate-coddling judges are playing the same disgraceful game — drastically reducing the amounts that juries order corporations to pay. In a Montana case, for example, a jury awarded $240 million in punitive damages to the families of three people, including two teenagers, killed in a car crash. The deaths were blamed on a steering defect that South Korean automaker Hyundai was found to have known about and “recklessly” ignored for more than a decade. But a district judge has since supplanted the jury’s ruling with her own. While declaring that Hyundai’s “reprehensibility” certainly warrants a sizeable punishment, she cut the corporation’s punitive payment down to $73 million.
Hello — that’s not punishment to a $79-billion-a-year car giant, it’s pocket change. Why would Hyundai executives quit putting corporate profits over people’s lives if that’s their “punishment”?
Plus, we taxpayers and the victims’ families are still lined up to subsidize whatever “punishment” Hyundai ultimately pays. With subsidies and wrist-slaps, the corporate criminal whirligig will continue to spin, making a mockery of justice. Fortunately, Senator Leahy has had the good sense to introduce legislation to lock down this escape hatch for thieves, killers and other executive-suite villains. For more information on the moral outrage of ordinary taxpayers being forced to subsidize corporate criminals, contact U.S. PIRG at http://www.uspirg.org.
By: Jim Hightower, The National Memo, March 11, 2015
“American Society’s Real Moochers; CEOs”: It’s Not The Working Poor Who Deserve Public Scorn For Dependence On Government Handouts
Holiday bells are silent in the homes of America’s struggling working poor, even with gasoline prices at their lowest levels in years. These are people derided as moochers because their starvation wages force them to accept food stamps to feed their children.
On the other side of town, inside gated communities where guards demand photo ID even from Santa, CEOs’ Christmas plums are super-sugared with record-breaking corporate profits.
These are people somehow not derided as moochers, even though their million-dollar pay packages are propped up by tax breaks.
The parable of Charles Dickens’ A Christmas Carol springs to mind as Wall Street banks and law firms hand out six- and seven-figure year-end bonuses while Wal-Mart and fast food workers protest wages so low that their holiday meals are food pantry dregs. It is CEOs, not the working poor, who deserve public scorn for their dependence on government handouts.
The Institute for Policy Studies issued a report last month that details the mooching of the nation’s top corporations and CEOs. It’s called “Fleecing Uncle Sam.” The findings are pretty galling.
Of America’s 100 top-paid CEOs, 29 worked schemes that enabled them to collect more in compensation than their corporations paid in income taxes. The average pay for these 29: $32 million. For one year. And corporations mangle tax the code to deduct that too.
Though their corporations reported combined pre-tax profits of $24 billion, they wrangled $238 million in tax refunds out of the federal government. That’s refunds — the government gave money to highly profitable corporations.
That’s an effective tax rate of negative 1 percent.
That means middle class taxpayers helped cover the cost of million-dollar pay packages for CEOs. Middle class taxpayers, whose median family income is $51,324 and whose federal income taxes are withdrawn directly from their checks before they see a cent of pay, support CEOs who pull down $32 million a year.
That qualifies CEOs as first-class fleecers!
Their corporations pay nothing for essential government services that middle class taxpayers provide. That includes patent protection, the Commerce Department’s sanctions against foreign trade rule violations and federal court dispute resolution.
Some corporations haven’t developed schemes enabling them to tax the federal government. Instead, they pay, but not at that 35 percent rate they’re always whining about. Between 2008 and 2012, the average large corporation, according to Fleecing Uncle Sam, paid just 19.4 percent. Individuals earning $50,000 a year pay 25 percent. Clearly, corporations are not paying a fair share at 19 percent.
There’s this wacky theory that if governments excuse corporations from paying their share, then they’ll expand and create jobs. It’s wacky because it’s fiction. Highly profitable corporations aren’t expanding and creating jobs; they’re buying back their own stock.
A study by University of Massachusetts professor William Lazonick, president of the Academic-Industry Research Network, showed that between 2003 and 2012, S&P 500 corporations used 54 percent of their earnings – $2.4 trillion – to buy their own stock.
This isn’t creating jobs. This isn’t investing in a corporation’s future. This is adding to CEO wealth. It works like this: Stock buybacks push up stock prices. Forty-two percent of compensation for S&P 500 CEOs comes from stock options. Thus, as Lazonick points out, stock increases equal CEO pay raises.
Corporations don’t expand just because untaxed profits are sitting around anyway. They expand to meet demand. And corporate practices have deflated demand.
Part of the problem is that CEOs and top executives are taking an increasing portion while doling out less to workers. As the New York Times reported in January, wages have fallen to a record low as a share of gross domestic product, dropping to 43.5 percent last year. It was 50 percent in 1975. The decline means less demand.
But there’s more. Just last week, The New York Times noted two other trends that contribute to weak demand. One is wage theft. The U.S. Department of Labor found that more than 300,000 workers in New York and California are victims of minimum wage violations each month, costing them between $20 million and $29 million each week. If corporations didn’t cheat them out of those earnings, their spending would generate greater demand.
The other trend is insecure income. Millions of Americans are unsure week to week how much money will be coming into their households. This occurs for many reasons, but among the most prominent is the refusal of employers to provide workers with steady weekly hours and practices like sending workers home when retail or restaurant traffic is light. A survey by the Federal Reserve suggests the problem of unreliable income may have worsened as Wall Street has strengthened. Families that can’t pay their bills reduce demand.
Instead of giving workers raises and steady hours, corporations have rewarded only those at the top. The Fleecing Uncle Sam study found that companies that paid their CEOs more than they paid in federal income taxes gave those CEOs fat raises. The average pay of these CEOs rose from $16.7 million in 2010 to $32 million in 2013.
They’ve got trillions for CEOs and stock buy-backs, but nothing for workers or the federal government. This isn’t an accident. It’s not some invisible hand of the market. It’s CEOs freeloading.
No ghosts are going to show up to convert these Scrooges into humans. Instead, the first step in that process is recognizing that the moochers are the CEOs, not the hapless food stamp recipients who desperately want steady, full-time, decently-paid work. The second step is to demand that corporations pay their fair share of taxes and provide steady, full-time, decently-paid work.
By: Leo Gerard, President of the United Steelworkers International Union; In These Times, January 1, 2015
“The Government Problem”: The Central Issue Is Whom The Government Is For
Some believe the central political issue of our era is the size of the government. They’re wrong. The central issue is whom the government is for.
Consider the new spending bill Congress and the President agreed to a few weeks ago.
It’s not especially large by historic standards. Under the $1.1 trillion measure, government spending doesn’t rise as a percent of the total economy. In fact, if the economy grows as expected, government spending will actually shrink over the next year.
The problem with the legislation is who gets the goodies and who’s stuck with the tab.
For example, it repeals part of the Dodd-Frank Act designed to stop Wall Street from using other peoples’ money to support its gambling addiction, as the Street did before the near-meltdown of 2008.
Dodd-Frank had barred banks from using commercial deposits that belong to you and me and other people, and which are insured by the government, to make the kind of risky bets that got the Street into trouble and forced taxpayers to bail it out.
But Dodd-Frank put a crimp on Wall Street’s profits. So the Street’s lobbyists have been pushing to roll it back.
The new legislation, incorporating language drafted by lobbyists for Wall Street’s biggest bank, Citigroup, does just this.
It reopens the casino. This increases the likelihood you and I and other taxpayers will once again be left holding the bag.
Wall Street isn’t the only big winner from the new legislation. Health insurance companies get to keep their special tax breaks. Tourist destinations like Las Vegas get their travel promotion subsidies.
In a victory for food companies, the legislation even makes federally subsidized school lunches less healthy by allowing companies that provide them to include fewer whole grains. This boosts their profits because junkier food is less expensive to make.
Major defense contractors also win big. They get tens of billions of dollars for the new warplanes, missiles, and submarines they’ve been lobbying for.
Conservatives like to portray government as a welfare machine doling out benefits to the poor, some of whom are too lazy to work.
In reality, according to the Center for Budget and Policy Priorities, only about 12 percent of federal spending goes to individuals and families, most of whom are in dire need.
An increasing portion goes to corporate welfare.
In addition to the provisions in the recent spending bill that reward Wall Street, health insurers, the travel industry, food companies, and defense contractors, other corporate goodies have been long baked into the federal budget.
Big agribusiness gets price supports. Hedge-fund and private-equity managers get their own special “carried-interest” tax loophole. The oil and gas industry gets its special tax subsidies.
Big Pharma gets a particularly big benefit: a prohibition on government using its vast bargaining power under Medicare and Medicaid to negotiate low drug prices.
Why are politicians doing so much for corporate executives and Wall Street insiders? Follow the money. It’s because they’re flooding Washington with money as never before, financing an increasing portion of politicians’ campaigns.
The Supreme Court’s decision this year in McCutcheon vs. Federal Election Commission, following in the wake of Citizen’s United, already eliminated the $123,200 cap on the amount an individual could contribute to federal candidates.
The new spending legislation, just enacted, makes it easier for wealthy individuals to write big checks to political parties. Before, individuals could donate up to $32,400 to the Democratic or Republican National Committees.
Starting in 2015, they can donate ten times as much. In a two-year election cycle, a couple will be able to give $1,296,000 to a party’s various accounts.
But the only couples capable of giving that much are those that include corporate executives, Wall Street moguls, and other big-moneyed interests.
Which means Washington will be even more attentive to their needs in the next round of legislation.
That’s been the pattern. As wealth continues to concentrate at the top, individuals and entities with lots of money have greater political power to get favors from government – like the rollback of the Dodd-Frank law and the accumulation of additional corporate welfare. These favors, in turn, further entrench and expand the wealth at the top.
The size of government isn’t the problem. That’s a canard used to hide the far larger problem.
The larger problem is that much of government is no longer working for the vast majority it’s intended to serve. It’s working instead for a small minority at the top.
If government were responding to the public’s interest instead of the moneyed interests, it would be smaller and more efficient.
But unless or until we can reverse the vicious cycle of big money getting political favors that makes big money even bigger, we can’t get the government we want and deserve.
By: Robert Reich, The Robert Reich Blog, December 23, 2014
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