GOP Can’t Find “Job Creators” Against Surtax

 

So, NPR had a story this morning about the “Millionaire Surtax” that Democrats have proposed to help pay for an extension of the payroll tax holiday that has been in place since last year.

The GOP‘s argument against the surtax is that it will harm “job creators” who will refuse to hire people.

So, NPR requested to speak to some of the potential “victims” of the surtax:

We wanted to talk to business owners who would be affected. So, NPR requested help from numerous Republican congressional offices, including House and Senate leadership. They were unable to produce a single millionaire job creator for us to interview.

Undefeated, NPR next requested the same thing from business groups that have also fought the proposal. Again, no example could be produced.

Eventually, the reporters placed a request for business owners that would be affected by the tax to respond, and they did — only the answers they got were mostly like Jason Burger, co-owner of a company called CSS International Holdings.

Mr. Burger’s company is an international “infrastructure contractor”:

“If my taxes go up, I have slightly less disposable income, yes…But that has nothing to do with what my business does. What my business does is based on the contracts that it wins and the demand for its services.”

NPR added,

Burger says his Michigan-based company is hiring like crazy, and he’d be perfectly willing to pay the surtax.

“It’s only fair that I put back into the system that is the entire reason for my success,” said Burger.

So again, Republicans are manufacturing disastrous consequences for policy proposals that are quite sound.

Now, it is possible that the businesspeople who responded to NPR on Facebook are prone to be more liberal, but the fact that both the Republican party and business trade groups couldn’t provide a single example of an small entrepreneur who would decide not to hire based on his personal taxes is illustrative of how the conservative mind works.

Thinks are true because I feel they are true. Damn the evidence.

-Chris

Related articles

• GOP backs payroll tax extension but rejects surtax on millionaires (politicalticker.blogs.cnn.com)
• Does the GOP Really Love You? (inc.com)

In Education, Money IS the Key

Image by Sean MacEntee via Flickr

David Sirota, writing at Salon.com examines the results of two new studies on education and found that the principle factor deciding of students perform well is — money.

What real education reform looks like

He summarizes:

The first report, from Stanford University, showed that with a rising “income achievement gap,” a family’s economic situation is a bigger determinative force in a child’s academic performance than any other major demographic factor. For poor kids, that means the intensifying hardships of poverty are now creating massive obstacles to academic progress.

Because of this reality, schools in destitute areas naturally require more resources than those in rich ones so as to help impoverished kids overcome comparatively steep odds. Yet, according to the second report from the U.S. Department of Education, “many high-poverty schools receive less than their fair share of state and local funding.” As if purposely embodying the old adage about adding insult to injury, the financing scheme “leav(es) students in high-poverty schools with fewer resources than schools attended by their wealthier peers.” In practice, that equals less funding to recruit teachers, upgrade classrooms, reduce class sizes and sustain all the other basics of a good education.

Put all this together and behold the crux of America’s education problems in bumper-sticker terms: It’s poverty and punitive funding formulas, stupid.

For years, private education corporations have consistently blamed teacher unions for poor results in our nations schools, but the reports shoot down this myth. Sirota:

We’ve also learned that no matter how much self-styled education “reformers” claim otherwise, the always-demonized teachers unions are not holding our education system back. As the New York Times recently noted: “If unions are the primary cause of bad schools, why isn’t labor’s pernicious effect” felt in the very unionized schools that so consistently graduate top students?

The conclusion is that in order to improve education for all students, we must combat poverty and reform the funding system:

Instead, America’s youth need the painfully obvious: a national commitment to combating poverty and more funds spent on schools in the poorest areas than on schools in the richest areas — not the other way around.

Within education, achieving those objectives requires efforts to stop financing schools via property tax systems (i.e., systems that by design direct more resources to wealthy areas). It also requires initiatives that better target public education appropriations at schools in low-income neighborhoods — and changing those existing funding formulas that actively exacerbate inequality.

I have been saying something similar for years.

My two-part proposal has been 1) to create an affordable model school infrastructure and make sure all schools meet the standards (physical plant, class size, resources, and 2) pool all school funds at the state level and distribute them based on a per-student amount to every school.

Schools in poverty-stricken areas would be given additional funds to meet needs (nutrition, etc.) not found in wealthier areas.

As Sirota notes, it’s a tough sell in the current political environment, but it’s one of the most important obstacles to ensuring the prominence of American for generations to come.

-Chris

Related articles

• Education Reform=Turmoil and Disruption (seattleducation2010.wordpress.com)
• Historian blasts education reforms (seattletimes.nwsource.com)

More Entitlements, Less Deficits?

Image via Wikipedia

Today Ezra Klein posted an interesting piece about the Euro crisis that confirms what I have thought for some time.

You may have heard the standard right-wing talking point that the current economic woes in Europe are directly tied to entitlements. Conservatives made a similar claim about the US deficit, which is why we’ve been talking about that side of the equation instead of higher taxes until recently (thank you OWS).

Both claims, of course stretch the truth — a lot.

The economic downturn (due to the subprime mortgage disaster) and tax cuts for the wealthy are the prime factors in the US deficit.

Entitlements are also not the boogeyman in the European crisis.

Klein’s piece, “A larger welfare state can mean a lower deficit” highlights the case of Germany, which has a hefty welfare state — but didn’t suffer from any of the problems faced by Greece and other Euro-zone countries:

Take Germany. They have a pretty big welfare state: pensions, health care, paid vacations, unemployment benefits equal to two-thirds of one’s income. Indeed, the Organization for Economic Cooperation and Development keeps track of social spending — unemployment, old-age pensions, health care, etc — as a percentage of GDP. In 2007, Germany spent 25.2 percent of their GDP on such things. Greece spent 21.3 percent on social policies. Yet Greece is in crisis, and Germany is fine.

In fact, the reality is that a single-payer healthcare system — like the one in Canada — controls costs and actually reduces the deficit.

As recently as 1965, the cost of those two systems competed neck-and-neck. That year, Canada spent 5.9 percent of its GDP on health care. The United States spent 5.7 percent. But around that time, Canada was transitioning to its current single-payer system. Over the next four decades, the growth of health-care costs slowed in Canada while it accelerated in the United States. By 2009, Canada was spending 11 percent of its GDP on health care — and covering everyone. The United States was spending 17.4 percent of its GDP and leaving 45 million uninsured. In dollar terms, we’re spending $3,600 more per person, per year, than Canada.

I’m not an economist, but there seems to be some consensus in the articles that I have read that what Klein states is true.

I have seen no convincing evidence that European woes are principally caused by entitlement spending.

In fact, Klein makes a good argument that a strong healthcare system could act as a bulwark against deficit:

If the United States had Canada’s health-care system, and Canada’s per capita health-care costs, we would have a much “larger” welfare state, but we wouldn’t have a deficit problem. Assuming we weren’t spending that money elsewhere, we wouldn’t even have a deficit. Likewise, if any country in the euro zone maintained the United States’s health-care system and our health-care spending, it would have a smaller welfare state, but it would be sagging beneath a debt burden far more onerous than anything anyone in Europe is facing today.

-Chris

Related articles

• Contrary To Republican Rhetoric, Europe Is Not In Trouble Because Of Spending And Debt (thinkprogress.org)
• The European Debt Crisis in Three Graphs (bostongazette.wordpress.com)
• A Bankrupt Uncle Sam Hypocritically Lectures Europe On Debt (forbes.com)

Reversing ‘Citizens United’

American hero Bernie Sanders (I-Vt.)  has introduced a Constitutional Amendment to reverse the horrible Citizens United vs. the Federal Election Commission ruling:

Sanders Files ‘Saving American Democracy Amendment’

 

From the press release:

Sanders’ Saving American Democracy Amendment would make clear that corporations are not entitled to the same constitutional rights as people and that corporations may be regulated by Congress and state legislatures. It also would preserve the First Amendment guarantee of freedom of the press. It would incorporate a century-old ban on corporate campaign donations to candidates, and establish broad authority for Congress and states to regulate spending in elections.

This needs to be done.

Corporations have their hooks into every politician at almost every level, and right-wing media has done a nice job selling people on the idea that corporations ARE people.

The only way we will ever have a responsive government is if we get the corrupting power of money out of the game.

Ideas should be introduced and debated on an even playing field and live and die based on their merits — not on a marketing campaign by whoever spends the most.

A fact sheet linked from Sander’s press release makes a strong case:

Before Citizens United, corporations had to abide by the ruling in Austin v. Michigan Chamber of Commerce that limited their participation in elections to political action committees. PACS are funded by voluntary contributions from the employees of a corporation, as opposed to the general treasury fund. The Supreme Court also determined that limitations on corporate spending in elections were permissible in McConnell v. FEC, a decision that upheld portions of the McCain-Feingold reforms that aimed to reign in corporate electioneering.
Because of Citizens United, corporations are now allowed to tap into their profits to spend money advocating for or against candidates of their choosing. Even worse, they can do it anonymously. By undermining the very concept of campaign finance laws, like the ones limiting individual contributions to candidates, the Citizens United decision even threatens a 1907 law passed by Congress prohibiting corporations from directly contributing to candidates. If we don’t take action, before we know it, the Supreme Court could rule that corporations can directly to contribute to candidates for public office.

Read the proposed amendment here.

I’d love for this to pass, but I doubt there’s a chance of that happening.

-Chris

Andrew Sullivan on the Defense Authorization Bill

In today’s Dish, Andrew Sullivan discusses the Defense Authorization Bill:

The president has mercifully agreed to veto the bill that would allow the US military to seize and detain without any due process anyone, including American citizens, who are suspected of terrorism, even in the US itself. A future Republican president might throw torture in with this toxic brew.

The veto is a relief. But the US Senate has thrown its weight behind gutting the core, most basic freedom upon which all others follow: habeas corpus. It has endorsed the notion that the government can do whatever it likes to any citizen it merely suspects of being involved of terrorism. It is a hole through which the entire framework of the constitution could disappear. One more terror attack, and we would have authorized soldiers to break into citizens’ homes at will, round up any citizens the government deems suspicious, and deny them any recourse.

Having seen a number of Facebook posts on the subject and the silence from the right on this important issue, I agree with Sullivan on the following sentiment:

A healthcare mandate is an outrage; gutting habeas corpus is just fine. Go figure.

-Chris

Obama’s Silence

Image by ATIS547 via Flickr

Obama is getting “mic checked” in protest of his silence over the widespread abuse of protesters that was most recently illustrated at UC Davis.

Obama has a real problem with the progressive base of his party. His centrist stance and coziness with Wall Street are being noticed more and more.

His reluctance to call out and decry things that are obviously wrong and extremely anti-American also reflects poorly on his leadership.

He has repeatedly caved in to Republican demands, and has started negotiations squarely to the right of center — where the only compromise is to move to the far right.

To paraphrase a recent satirical segment on the highly recommended Onion News Network, Obama has reached an agreement with Republicans that will allow them to kick him in the balls whenever they like in exchange for nothing.

Obama is giving us few reasons to support him, and his seeming indifference to headlines like “Pregnant Seattle protester miscarries after being kicked, pepper sprayed” isn’t going to change that dynamic.

-Chris

Robert Reich has a Sensible Plan

Economist Robert Reich has a sensible plan to fix our deficit and debt woes.

In a November 19 post, Reich gives the following advice to the Deficit Supercommittee (which has since disbanded, after failing to reach an agreement):

1. Make no cuts before unemployment is back under control (down to 5%).

2. Make the boost big enough. We need a huge jobs program with components like the New Deal’s Civilian Conservation Corps and Work Progress Administration to restore our infrastructure.

3. Raise taxes on the super rich and tax all income (capital gains included) at the same rate. Restore the tax structure to pre-1980 levels and put a 2% surcharge on income over $5 million.

4. Cut the real welfare — military spending and corporate subsidies. Savings = $400 billion annually.

Reich’s closing plea, of course,  fell on deaf ears:

Do you hear me, Washington? Do these four things and restore jobs and prosperity. Fail to do these, and you’ll make things much, much worse.

Unfortunately, there’s not a chance any of this will get through in this political climate.

It seems like we are constantly in a battle to mitigate damage from bad policy and those actively on a misguided crusade to make things much worse, and not making any headway in actually fixing the problem.

-Chris

Low Expectations for State of the Union

Image via Wikipedia

I don’t have any great expectations for the State of the Union address tomorrow night.
Paul Krugman has been critical of the signalling coming out of the White House:
The Competition Myth

Robert Reich has a blog summarizing how our country got to it’s current state and what the president should do about it:
The State of the Union: What the Presideny Should Say

There’s much truth in what both of these economists say.

But Obama has spent much of his time trying to appease business interests and surrounding himself with the movers and shakers from the very corporate enclave that helped create our current economy.

It’s not clear exactly what helpful policies will be allowed to see sunlight in a setting in which the president is bending over backwards to satisfy big business.

-Chris

Related Articles

• Report: Obama to Call for New Investments in State of the Union (news.firedoglake.com)

Deficit Reduction and Social Security

Image via Wikipedia

In reviewing the proposal by the president’s bipartisan deficit reduction committee, there is one portion that I cannot disagree with more.

To be sure, this is a serious proposal, with pain all around, but the delay in benefits for Social Security recipients until the age of 68 is wrong, wrong, wrong.

I have always been a huge advocate of the much-derided lock box for Social Security.  The current system is solvent until 2037, but will rack up huge losses going out to 75 years from now.

Treating Social Security as just another part of the overall budget is one of the accounting tricks that have gotten us into this mess to begin with.

This is the first year since the 1980s that the Social Security will start paying out more than it has taken in.

This is due to the large number of Americans expected to retire. The 75 year shortfall is calculated at $5.3 trillion. Insurmountable, right?

Wrong.

Senate report says tweaks can sustain Social Security

Social Security faces a $5.3 trillion shortfall over the next 75 years, but a new congressional report says the massive gap could be erased with only modest changes to payroll taxes and benefits.

There are a few options to fix Social Security:

1. Increase the age where retirees qualify (as proposed by the committee)
2. Curb cost of living adjustments
3. Raise payroll taxes on EVERYONE

Social Security isn’t an “entitlement”. Everyone pays into it. It is an insurance policy that provides a modest safety net for retirees.

I agree with this letter writer to the Baltimore Sun on this point:

Cutting Social Security benefits is as bad as raising taxes

Social Security is said to be an “entitlement,” but the difference between an “obligation” and an “entitlement” is just a matter of point of view. Those of us who have been paying into the Social Security system for years are entitled to our promised benefits. The U.S. government is obligated to keep its promises.

Social Security and it’s problems should be addressed separately from the concerns of the burgeoning Federal deficit.

For too long, legislators have counted on being able to dip into the Social Security revenues to work their accounting magic and prop up a wasteful budget.

It’s long past time to end that practice.

-Chris

Related Articles

• Cenk Uygur: Cutting Social Security is the New TARP (huffingtonpost.com)
• Deficit Targets: Social Security, Mortgage Breaks (abcnews.go.com)

Deficit Rhetoric vs. Action

Image via Wikipedia

Two articles came to my notice today concerning the deficit.

The big news was that Obama’s bipartisan commission on the deficit released their report on cutting the budget deficit:
Panel Weighs Deep Cuts in Tax Breaks and Spending

The lead:

A draft proposal released Wednesday by the chairmen of President Obama’s bipartisan commission on reducing the federal debt calls for deep cuts in domestic and military spending starting in 2012, and an overhaul of the tax code to raise revenue. Those changes and others would erase nearly $4 trillion from projected deficits through 2020, the proposal says.

The recommendations are dead, dead, dead.

Why?

The plan would reduce Social Security benefits to most future retirees — low-income people would get a higher benefit — and it would subject higher levels of income to payroll taxes to ensure Social Security’s solvency for at least the next 75 years.

Italics are mine.

These are the tough choices that country faces, and this is a serious proposal to fix what’s broken. Politically, however, it’ll never fly.

The plan calls for a simplification –and tax cuts across the board– by cutting many popular tax loopholes. The overhaul of the tax code would net a projected $80 billion in 2015.

On the other hand, the Tea Party poster boy, Rand Paul, can’t specify exactly what he would do to slash the deficit:

In Tense Interview With Spitzer, Rand Paul Can’t Name Specific Cut To Balance Budget

Spitzer asked Paul to name specific programs he would cut from health care, Social Security, or defense. But Paul demurred, explaining that he would offer a balanced budget in the next Congress — over 1, 2, 3, 4 and 5 year increments, but was still unsure of what to cut to get there. At one point, Paul even suggested that rather than pressing him for specifics, Spitzer should invite liberals and ask “how do you continue to have these programs?”

In other words, complete and utter bullshit.

Serious debate about the deficit is important, but for the Tea Party crowd, allegedly fueled by their deep concern about the deficit, have absolutely no plan to make things better.

It reminds me of the Monty Python skit, “How To Do It”:

Simplistic solutions to complex problems with no understanding and no hard work — that’s the stock and trade of the Tea Party and the Republicans who are trying to channel their activism to continue their campaign to reward the wealthy.

Bolstered by their midterm wins, there’s little hope that the Tea Party Republicans will negotiate in good faith to address the deficit.

Many of them have expressed publicly and privately that they do not want Obama to have a legislative win that he can run on in 2012, so they are quite content to do absolutely nothing and block everything.

We’ll see how it plays out, but it doesn’t look promising.

-Chris

Related Articles

• Is Anyone Serious about Cutting the Deficit? (cbsnews.com)
• Deficit Panel Calls For Social Security Cuts (oliverwillis.com)
• Ira Glasser: Calling the Republican Bluff (huffingtonpost.com)