November 17, 2011
The Washington Times
By Stephen Dinan
“Can you imagine what would happen if we all handeled our finances like the US government? We’d not only be bankrupt, but we’d probably be in jail.” –KTRN
The Treasury Department said Wednesday that the federal debt has climbed to a record $15 trillion — a staggering figure that caps a precipitous decade-long rise.
The exact total stood at $15,033,607,255,920.32 as of the end of business Tuesday, marking a jump of $56 billion over Monday’s tally. All told, federal debt has risen $4.407 trillion since President Obama took office. It stood at $5.7 trillion in 2001, when George W. Bush moved into the White House.
“Today marks an infamous day in American history,” said House Budget Committee Chairman Paul Ryan, Wisconsin Republican.
The announcement was made a day before Congress was poised to pass a bill >that would continue the high rate of spending into 2012, and as a special committee continued to talk about ways to slow the steep rise in deficits projected for the foreseeable future.
None of those efforts would cut the debt, but would slow the rate of growth.
Republicans say that underscores the need for immediate spending cuts to get a handle on the budget.
They said Congress will have that chance this week when the House votes on a balanced-budget amendment to the Constitution.
Democrats were silent on the $15 trillion debt milepost, though on the broader issue of deficits they say the economy is so weak that it needs more spending in the short term.
In the longer term, they argue, government cannot be cut down to the size it was for most of the post-World War II era, and instead must raise taxes to pay for all of its promises such as Social Security and Medicare while funding defense, education, food stamps and other basic domestic needs.
Click here for the full report from The Washington Times.
October 31, 2011
By Scott Horsley
The Congressional Budget Office released a report this week showing that the gap between wealthy and poor Americans has become much wider than it once was.
What’s behind that expanding income gap?
Federal tax policy is part of the story. Those at the top of the income ladder have been the biggest beneficiaries of tax cuts over the last three decades.
But the biggest change has come in the shape of the economy itself.
The United States is becoming more and more of a winner-take-all society. Cornell University economist Robert Frank co-wrote a book with that name. It describes how technological change allows top performers to claim an ever-larger slice of the economic pie.
“The most vivid example we had for a long time was the tax advice industry,” he says. People who once might have gone to a local accountant to have their taxes done can now use mass-produced software instead. That puts a crimp on the income of local accountants. But the CEO behind TurboTax made more than $4 million last year.
Superstars in sports and entertainment have long enjoyed that kind of outsized gain. But Frank says the winner-take-all pattern of concentrated rewards is spreading to one field after another.
“All that’s to the good in one sense. I mean, we get to buy from the best now in a way that we didn’t,” he says. “But it’s created an enormous increase in income inequality.”
None of this is exactly news to people who’ve been paying attention for the last three decades. Ten days after he took office, President Obama set up a task force on the issue, to be chaired by Vice President Biden.
“The measure of our success will be whether the middle class once again shares in the economic success and prosperity of the nation,” Biden said.
Republicans generally don’t like to talk about the widening income gap. Instead, they stress that with hard work anyone can make it into the top 1 percent. In a speech this week at the Heritage Foundation, Republican Rep. Paul Ryan argued that focusing on the distribution of income amounts to misguided class warfare.
“This just won’t work in America,” Ryan said. “Class is not a fixed designation in this country. We are an upwardly mobile society with a lot of income movement between income groups.”
In fact, studies show there’s less upward mobility now than there used to be, and less movement between income groups in the United States than in Germany, France, Canada or the Scandinavian countries.
Economist Jared Bernstein, who used to staff the Middle Class Task Force at the White House, argues the Republican budget drafted by Ryan would worsen inequality, because it would cut government programs that benefit the poor and middle class, while cutting taxes for the wealthy.
“I think it was Warren Buffett who said, ‘If there’s class warfare out there, my class is winning,’” Bernstein says. “It’s not that you want your tax system to totally offset the inequality in market outcomes. I don’t. But you certainly don’t want them to make it worse. And plans like those of Paul Ryan do. And that to me sounds a lot like class warfare.”
September 21st, 2011
The Huffington Post
By: Amanda Terkel
Democrats are hitting back at Republicans who say President Obama’s plan to increase taxes on millionaires and billionaires amounts to “class warfare,” arguing that the GOP is the party that has been protecting the interests of a particular class — the wealthiest Americans.
On Monday, Obama unveiled his deficit reduction plan, the centerpiece of which is a new tax on income over $1 million. The White House is calling it “The Buffett Rule,” named for billionaire investor Warren Buffett, who has said it’s absurd that he is taxed at a lower rate than his secretary. The new rule is meant to prevent the wealthiest Americans from taking advantage of loopholes that tax investment earnings at lower rates than wages.
Republicans quickly responded to the plan by calling it “class warfare” — a term used by Rep. Paul Ryan (R-Wis.), Sen. Lindsey Graham (R-S.C.) and House Speaker John Boehner (R-Ohio).
But Democrats are hitting back. Ryan Nickel, spokesman for the House Appropriations Committee’s Minority Staff, sent an email to Democratic press secretaries on Monday calling attention to dramatic cuts that Republicans have proposed to programs benefiting low- and middle-income Americans: “Are GOP cuts to WIC [Women Infants and Children], Pell Grants, Meals-on-Wheels, Low-Income Legal Services & Head Start ‘Class Warfare’?”
Some of the GOP cuts highlighted in the email:
– Interagency Council on Homelessness: The GOP zeroed out this agency in their proposed FY12 Transportation, HUD Appropriations Bill. The USICH enhances the Federal Government’s response to homelessness by enhancing coordination between agencies, addressing duplicative programs, and identifying best-practices.
– Head Start: The cut of $1.1 billion (14%) below the FY10 level and more than $500 million below FY2008, would have translated to a massive loss of comprehensive early childhood services, with more than 200,000 children across the country being kicked out of the program and put 55,000 Head Start teachers out of work and into unemployment lines. Additionally, this funding level would have meant cuts to research grants, training and technical assistance grants and monitoring activities.
– Help for the Poor and Elderly: Community Services Block Grants were cut by $305 million below the FY10 level. The Administration on Aging was cut by $71 million which would have reduced senior center and Meals on Wheels services to the elderly.
Indeed, the Republican budget plans released this year have attempted to cut back on programs that disproportionately benefit low- and middle-income individuals — especially women, children and senior citizens.
The GOP-controlled House of Representatives proposed cutting $20 million from the Commodity Supplemental Food Program, which provides food to low-income Americans. The reductions would have resulted in an estimated 81,000 individuals being cut out of the program.
In April, meanwhile, 14 female Democratic lawmakers fasted to “draw attention to the severe cuts being proposed to poverty-focused international assistance programs, which will largely hurt women and girls globally.”
Obama has responded to the Republicans’ “class warfare” comments by saying, “Either we have to ask the wealthy to pay their fair share, or we have to ask seniors to pay more for medicare, or gut education. This is not class warfare. It’s math.”
In an email sent to Obama for America supporters, Campaign Manager Jim Messina wrote that the Republican cries of “class warfare” are a “rhetorical smokescreen for providing millionaires and billionaires special treatment.”
June 2nd, 2011
By: Joshua Holland
The Republican budget plan is the purest expression of the Right’s longstanding desire to dismantle the social safety net. It’s not about the budget deficit—that’s simply a premise — it’s the “Shock Doctrine” in action.
How radical is it? According to an analysis by the non-partisan Center for Budget and Policy Priorities (CBPP), the plan would slash all public spending other than Social Security, Medicare and Medicaid by almost three-quarters by 2050. And because the “budget does not envision defense cuts in real terms,” what this means is that “most of the rest of the federal government outside of health care, Social Security, and defense would cease to exist.”
It’s the epitome of anti-tax zealot Grover Norquist’s fantasy of shrinking the government down to a point where he could “drown it in a bathtub.”
And it’s not just a matter of bait-and-switch; the entire proposal is a fraud. Just consider this: while selling their plan to the public as a “serious” and “bold” attempt to reduce the federal deficit, Republicans are overstating how much it would cut the budget gap by ten-fold.
That’s right, Rep Paul Ryan, R-Wisconsin, says his plan would reduce the deficit by $160 billion per year over the next decade, but it actually trims just $15 billion per year over that period – which is next to nothing in the context of budgets that run well over $3 trillion. To put that figure in perspective, it represents less than half of the spending cuts proposed by Barack Obama for next year; the average savings would have reduced this year’s deficit by just one measly percent.
Yet despite that simple mathematical truth, media outlets like CBS mindlessly report that the GOP’s budget “would reduce the deficit by $4.4 trillion over ten years.” How did the media get so thoroughly duped? According to CBPP, Wisconsin Rep. Paul Ryan’s staff inflated the cuts in spending by $1.5 trillion over the next decade (which still doesn’t get to CBS’ claimed savings — reporter Jill Jackson apparently looked at the spending cuts but didn’t factor in the plan’s reduced tax revenues). First, they took credit for the costs of the Iraq and Afghanistan conflicts decreasing with previously planned troop withdrawals that have nothing to do with the GOP’s budget plan– something Ryan himself criticized the White House for doing in its own budget projections. Then they made a “math error” that exaggerated how much we’d save in interest payments by $230 billion over the next decade – a number significantly higher than the amount of deficit reduction they’d get out of the plan. Oops!
After 10 years, the deficit reduction gets bigger, but largely by sticking seniors with more health-care costs (as discussed below), and through unspecified “tax reforms” that are supposed to raise revenues. The GOP promises to create and pass some sort of tax scheme sometime over the next decade, but they’ve also sworn not to increase taxes in order to balance the budget and history suggests they’d fight tooth-and-nail to block such a measure. Again, we see a scam packaged as a “brave” budget proposal.
Make no mistake, however – while the plan’s deficit reduction is largely fantasy, the pain it would impose on working America is very real. Almost two-thirds of the $4.5 trillion in spending cuts over the next 10 years come from programs that help those with lower incomes. Another big chunk of “savings” doesn’t save any money at all – according to the Congressional Budget Office (CBO), the GOP’s Medicare privatization scheme would increase the cost of the program by upwards of 40 percent, but it would sharply cut the tab the government picks up, instead shifting the burden onto older people themselves.
CBO tells us a “typical senior” in 2022 would face more than twice the health-care costs under the GOP plan than under Medicare as it exists today. The Republicans, having been burned badly by Bush’s attempt to privatize Social Security, largely left it alone, but as Daniel Marans of Social Security Works points out, the plan “creates an unprecedented new fast-track procedure to ram through Social Security benefit cuts.”
You may be wondering how it’s possible that a budget which cuts so much public spending barely touches the deficit. The answer is simple. The GOP’s plan would not only make the “Bush tax cuts” permanent – CBO says if they don’t expire on schedule those cuts will represent the biggest contributor to the deficit going forward – it goes further still, reducing the top marginal tax rate (paid only by multi-millionaires) to its lowest level since the mid 1930s, before the New Deal was established. It would slash the top rate paid by corporations by almost 30 percent, and it would also repeal a small surcharge high earners pay into the Medicare system. As CPBB notes, the tax proposals “place a top priority on cutting taxes for high-income people, while doing nothing to reduce budget deficits, themselves.” It’s basically a wash, simply redistributing more of the nation’s wealth to those at the top of the economic heap.
Slashing taxes on top earners and corporations can make sense in certain circumstances, but it’s nothing short of lunacy in our current situation. That’s because, contrary to the popular and longstanding Republican talking-point, we have a revenue problem, not a spending problem. The federal government collected taxes equaling 18.5 percent of our economic activity, on average, ever since World War II. Under Ronald Reagan, it averaged 18.2 percent. But over the past three years, the government took in just under 15 percent, the lowest level since 1950, before Medicare was enacted.
As I noted in April, while our corporate tax rates are high on paper, corporations have successfully lobbied for so many shelters and loopholes that, expressed as a share of GDP, American firms paid less than those in all of the other affluent countries in 2008 (we tied with Turkey for the bottom spot). And in 2011, they’ll pay almost a third less than they did that year, according to former Reagan adviser Bruce Bartlett.
It’s no wonder Americans don’t like the plan – and they hate it when they learn the details. Newt Gingrich has never been more correct than when he characterized it as right-wing “social engineering.” But the real crime has been committed by the corporate media– not only for calling the plan “courageous” and “serious,” but for referring to it in the context of deficit reduction in the first place.
July 14, 2010
The Wall Street Journal
By: Elizabeth Williamson
Washington’s major business groups plan a united front Wednesday in their confrontation with the Obama administration over economic policy, calling on the White House to cut taxes and curb its regulatory agenda.
Business groups including the U.S. Chamber of Commerce, the Business Roundtable and the National Federation of Independent Businesses will air a list of concerns about government policy at a “Jobs for America Summit” at the Chamber’s offices Wednesday.
The Chamber will issue an open letter to President Barack Obama asking that the administration cut taxes, act on pledges to expand export markets, and streamline government rules, according to a copy of the letter obtained by The Wall Street Journal.
Summit participants include legislators with leadership roles on business-related congressional committees, including Sen. Judd Gregg (R-N.H.); Sen. Mary Landrieu (D-La.); Rep. Melissa Bean (D-Ill.); and Rep. Paul Ryan (R-Wis.).
Also attending from the administration side are Erskine Bowles, President Bill Clinton’s chief of staff and former Wyoming Sen. Alan Simpson (R)—the two men co-chair Mr. Obama’s National Commission on Fiscal Responsibility and Reform.
“There’s a lot more unanimity than you may have seen over the past year” among business leaders, particularly in their opposition to tax and regulatory policy, said Stan Anderson, executive director of the chamber’s Campaign for Free Enterprise, which promotes its job-creation policies.
“We are not going to engage in a debate over whether the White House is pro- or anti-business. We really want to talk about policy.”
The White House will issue a written response to the chamber’s concerns, an administration official said Tuesday.
The Obama administration, struggling with a 9.5% unemployment rate in a congressional election year, has made a series of economic announcements in recent weeks that have so far failed to quell business groups’ furor.
Mr. Obama last month pledged to renew efforts to move a South Korea free trade agreement through Congress, and to work on treaties with Panama and Colombia. This week, administration officials said they’ve asked business leaders to submit specific regulations that inhibit economic growth, and are open to a broad regulatory review.
In the letter, which was sent to the White House Tuesday, the chamber says this Congress has passed $700 billion in tax increases, and demands that all tax cuts passed in the previous decade be extended, including those to individual, estate, capital gains and alternative minimum taxes. “In one bold, swift move, this would substantially boost investor, business, and consumer confidence,” the letter reads.
To reduce the deficit, the chamber urges the government to trim entitlement spending, expand logging in national forests, and revive inactive leases on oil, gas, and shale reserves.
It urges passage of free-trade agreements with South Korea, Colombia and Panama, estimating that 380,000 existing U.S. jobs will be lost to Canada and the European Union should they conclude agreements with the three nations before the U.S. does.
On the regulatory front, “What we’re looking at here is a tsunami of regulations coming online slowly because of legislation that has either been enacted or legislation that people expect in some form will be enacted,” said Bruce Josten, the chamber’s chief lobbyist.
The letter points out that the Environmental Protection Agency is moving forward with 29 major economic rules (a major rule would have an impact on the economy of at least $100 million) and 173 major policy rules.
Legislation overhauling financial-markets regulation now nearing passage in Congress would create more than 350 rule makings, 47 studies and 74 reports.
“You can find in these numbers a principal reason why businesses are so reluctant to make investments,” the letter reads.
The nation’s biggest business groups have become increasingly vocal in recent weeks, issuing public demands that the administration trim rules, speed trade deals and limit its intervention in private industry.
“I think the concerns have always been aligned but it’s really just a matter of tone and tenor,” said John Castellani, president of the Business Roundtable, which encompasses the nations’ biggest multinationals. Last month the roundtable, usually more friendly to the administration than the chamber, gave the White House a 54-page report detailing policies that it said are inhibiting growth.
Some in the White House express frustration with growing demands from businesses that it do immediately what takes months to accomplish in Congress.
“This economy is in a transitional phase and transitions engender uncertainty,” said Jared Bernstein, chief economic adviser to Vice President Joe Biden.
“Addressing the long-term fiscal challenges, as well as the excesses of the financial sector, was essential.”