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Who’s counting? Corporate tax breaks are almost twice the Sequester cuts

US CapitolTax lobbyists help businesses reap windfalls: While Congress fights over ways to cut spending and the deficit, generous breaks for corporations pass with little notice

Today’s Boston Globe looks at the $154 billion a year that Congress has approved in special corporate tax breaks.

(Paying attention here? Those corporate tax breaks are worth almost TWICE as much as the infamous “Sequester” budget cuts.)

The Globe also begins to quantify the “return on investment” for corporate lobbying expenses. For instance,

  • Multinational corporations with overseas investments spent about $134.5 million lobbying on various issues. What did they get for their money? An estimated $11.2 billion, just in one tax break (special treatment of certain foreign investment income).
    Approximate return on investment: 8,200%

Here’s how one observer described it: “What we’re doing is running a Soviet-style, five-year industrial plan for those industries that are clever enough in their lobbying to ask all of us to subsidize their business profits.’’

It’s a long read, but worth taking the time. Read the story here. Dig into the graphic here.

Why is the House GOP obsessed with the Keystone pipeline?

Republican ElephantSo… President Obama met with the House GOP yesterday, trying to find common ground on the federal budget.

And after the meeting, what were the headlines about?  The Keystone XL pipeline.

Say, what?  Our economic recovery is at stake.  There are huge decisions about what sort of government we will have – one that benefits the rich and powerful, or one that takes care of the aged and poor?   Austerity or growth?  Contractors or entitlements?  Deficit reduction or stimulus?

And the headlines are about a private company’s proposal to build an oil pipeline?  Gotta wonder.

Remember December 2011?  Desperate times for tens of millions of Americans who were out of work.  Finally, at the last minute, there was a political compromise:  “An Act to extend the payroll tax holiday, unemployment compensation, Medicare physician payment, provide for the consideration of the Keystone XL pipeline, and for other purposes”.

For policy wonks, that bill was a fascinating political compromise.  In exchange for an expedited permitting process for this one private construction project, all costs associated with the bill were exempted from statutory “PAY-GO” requirements.  In plain English, that means Congress added all of the bill’s costs to the federal debt without any consideration about how to pay for them.

So, how much did that bill cost?  My best estimate, based on an earlier version of the bill, is about $30 billion (and only part of that total was attributable to the emergency unemployment extension).  Step back and look at that political “compromise” from the perspective of an old-fashioned, fiscally-conservative Republican: $30 billion of federal debt was traded for the expedited permitting of a single private construction project.

Waiting for the punch line?  Grover Norquist is their lobbyist. He has been using his position at Americans for Tax Reform to push for the project’s permitting – in whatever bill he can use to get it through Congress.

The merits of the project?  Depends on who you ask, what source you trust.  When Cornell University researchers looked at the data submitted to the State Department, its researchers found that “the project will create no more than 2,500-4,650 temporary direct construction jobs for two years… based on the figures provided by TransCanada… the new permanent US pipeline jobs number as few as 50.”

So, who exactly is going to benefit?  Here’s one guess about the three companies whose stockholders stand to benefit the most.

Having watched that huge “political compromise” back in December 2011, I’m guessing yesterday’s headlines mean that the pending budget and government shutdown bills are going to end up as interesting political compromises, too.

If you aren’t familiar with Mr. Norquist, read more here.

The NH Alliance For Retired Americans Pres. Ballban Blasts Congressman Ryans Budget Proposal!

SS-Medicare-sayno.orgManchester, NH – House Budget Committee Chairman Paul Ryan unveiled a Republican budget on Tuesday that would once again prioritize millionaires over seniors by turning Medicare into a voucher system and repealing the Obama health care law.

“Last November, the American people voted on these principles and they voted No,” said Charles Balban, President of the New Hampshire Alliance for Retired Americans.

“This budget – Ryan’s 3rd edition – is not new and it’s not improved,” continued Charles Balban. “It again proposes privatizing Medicare and turning it into a coupon system while lowering tax rates on the wealthy and corporations.”

“Paul Ryan can produce all the charts he wants, but his values are diametrically opposed to those of the rest of us. New Hampshire seniors don’t see the need to balance the budget on our backs and those of the already-struggling middle class. We don’t think the wealthy and corporations need relief. The reason we’re in this mess to begin with is that they’ve been taking a bigger and bigger piece of the pie for too many years.”

“Paul Ryan and the GOP once again are proposing to end Medicare as we know it and double seniors’ out-of-pocket costs. This plan doesn’t reduce the cost of our health care system, but rather shifts it from the government’s books onto the backs of seniors.”

“This unfair plan proposes giving seniors vouchers rather than maintaining the guaranteed benefits of Medicare, and turning Medicaid into a block-grant program. Of course these vouchers would not keep up with costs and New Hampshire seniors would be out more and more money every year.”

 

For more information on the New Hampshire Alliance for Retired Americans, please contact: Terry Lochhead, (603) 545-9989.

NH Congressional Reps Sternly Oppose Rep Ryan’s Budget Cuts To Medicare And Other Programs

Ryan Plan and Grandma

From 2012, and yet still relevent

Once again Rep Paul Ryan, playfully known by some as Rep Eddie Munster, released the GOP House budget.  As all of you have probably read the budget continues to favor the 1% over the rest of us.   This is nothing new (see also How many times can the Republicans count the same money toward the budget?).

Rep Ryan’s budget hit the floor like a ton of bricks.  New Hampshire Congresswoman Carol Shea-Porter was the first to chastise the GOP plan in her statement.

“I’m disappointed that instead of taking this opportunity to work towards a balanced plan to reduce the deficit and create jobs, House Republicans chose more of the same: tax cuts for a wealthy few while asking for more sacrifice from the middle class.

“The Republican budget would turn Medicare into a voucher program – ending guaranteed coverage for future retirees. It would repeal Obamacare, an effort that amounts to little more than political grandstanding. And it would give Americans at the top a new round of tax cuts while asking students, seniors and the middle class to foot the bill. These ideas were debated over the course of the fall election, and they were rejected by Granite State voters.

“If the Republican House majority truly wants to compromise, they need to put forward a compromise budget.”

Congresswoman Shea-Porter is right.  Granite State voters overwhelmingly voted against the Romney/Ryan plan for America.  Even Speaker John Boehner (unknowingly) pushed a poll that supports raising taxes to balance the budget.  While Congressman Ryan is pushing for another completely partisan budget, Rep Annie Kuster is looking for balance.

“Chairman Ryan has once again proposed an uncompromising, sharply partisan budget that would hurt seniors, undermine critical investments in the middle class, and damage our economy. It’s a plan that relies on the same tired ideas voters rejected in November: ending Medicare as we know it, slashing investments in our future, and putting millionaires before middle class families.

“We need to reduce the deficit and cut government spending. But instead of offering proposals that have no chance of earning broad bipartisan support and becoming law, Republicans and Democrats in the House and Senate need to come together and compromise on a balanced plan to reduce the deficit, grow the economy, and protect seniors and the middle class. That type of responsible compromise remains the best and only way to address our fiscal challenges and move our country forward.”

Now all eyes will shift to the US Senate where Senator Patty Murray (D-WA) will release the Senate budget. The rumors are that the Senate plan is a mix of specific budgetary cuts and revenue increases through closing tax loopholes.  The Senate plan would also eliminate the ‘Sequester’ cuts which would end the mandatory furloughs and closures.

How many times can the Republicans count the same money toward the budget?

  1. Back in 2001, the Bush Tax Cuts were supposed to be temporary. All the old tax laws were supposed to kick back in, starting in 2011. The fact that all those “old taxes” were going to come back into effect was what made the tax cuts “affordable”, back when Alan Greenspan was doing the math.
  2. Fast-forward to January 2013, as the federal government goes over the Fiscal Cliff. The Republicans finally agreed to some “new taxes” – even though the “new taxes” were less than one-third of the “old taxes” which had been “temporarily suspended” by the Bush tax cuts. (The 10-year cost of the Bush tax cuts was $2.2 trillion. The Fiscal Cliff deal was $617 billion over 10 years.)
  3. Now it’s March. House Budget Committee Chairman Paul Ryan just released his budget proposal. And gosh, there’s that money again — this time as “budgetary savings”. Here’s what The Hill had to say:

The Ryan budget counts the $600 billion in new tax revenue raised under the January “fiscal cliff” deal as budgetary savings. Ryan also counts hundreds of billions in additional revenue being raised due to rosier economic growth projections…

But wait. There’s more:

The budget would also cut the top individual tax rate from 39.6 to 25 percent as part of an overhaul of the tax code that would eliminate breaks within the system. Like last year’s budget, the overhaul would leave two remaining rates at 10 and 25 percent.

Are the Republicans still trying to increase tax revenues by cutting taxes on the rich?

Confused? Me too.

But here’s the most confusing thing. Ryan describes this as – direct quote, here – “A budget that addresses America’s needs.”

In order to address America’s needs, Ryan proposes to:

  • cut Medicare, Medicaid and other health care spending by $2.7 trillion over 10 years;
  • cut an additional $1 trillion from “other programs” including food stamps, student loans and federal employee pensions; and
  • add $500 billion to the Pentagon’s budget.

So… apparently, Paul Ryan thinks America needs a budget that increases spending on military contractors while cutting spending on actual citizens.

Meanwhile, around this great country of ours…

Sequestration cuts mean that 600,000 young children from low-income families are losing the free milk, fruits and vegetables they had been receiving through a U.S. government nutrition program.

It’s Lent, Rep. Ryan. Been to church lately?

Where your treasure is, there your heart will be also.”

Military contractors? or hungry kids? Where’s your tax money going?

 

Congresswoman Annie Kuster Pushes Locally For A Fix To Forced Budget Cuts

Annie Kuster at NE CouncilEmphasizing the need for common sense and compromise in Washington, Congresswoman Annie Kuster (NH-02) today called on Republicans and Democrats to work together to find bipartisan solutions to our nation’s fiscal challenges during a speech at a New England Council Congressional Roundtable breakfast with local business leaders.

“Here’s my bottom line. Yes, Republicans and Democrats have real differences. Yes, we will disagree on some issues,” Kuster said. “But let’s work together on the things we do agree on. Let’s do our part to restore peoples’ faith that Congress can still do the right thing. Let’s start solving problems instead of creating new ones.

During her remarks, Kuster praised her fellow freshmen colleagues on both sides of the aisle for their early efforts to find common ground, noting that meaningfully addressing our fiscal challenges will require both parties to compromise.

“None of us expects to agree on everything,” Kuster said. “We’re not naïve. We’re not blind to our differences. But we’re also not willing to let the things we disagree on prevent us from making progress on the things we do agree on.”

“We want to be part of a new era in Congress where bipartisan solutions are the rule, not the exception…No more my way or the highway demands. No more lurching from crisis to crisis. No more demonizing people you disagree with. Just a laser-like focus on working together to solve problems.”

In February, Kuster helped establish the United Solutions Caucus, a new bipartisan coalition of Republican and Democratic freshmen Representatives focused on resolving our nation’s fiscal challenges in a common sense, bipartisan way. In a letter to President Obama and House leadership last month, the group outlined a framework for addressing our fiscal challenges that’s focused on streamlining government, simplifying the tax code, generating new revenue, and cutting spending – while protecting Social Security and Medicare.

Rep Shea-Porter Working In Washington To Stop Sequester

Carol Shea-Porter_Official.2010-300x288One week after sequestration began creating reckless and irresponsible cuts to our economy, Congresswoman Carol Shea-Porter worked to protect New Hampshire’s middle class from its most harmful effects. From meeting with Granite State veterans to cosponsoring legislation that would replace sequestration with a balanced approach, Congresswoman Shea-Porter is committed to working towards saving the hundreds of thousands of jobs and vital services set to be lost due to this reckless policy.

“Instead of imposing indiscriminate cuts on the Department of Defense and other programs vital to middle class security, we should replace sequestration with a balanced approach that increases revenue, decreases spending, and creates jobs,” said Shea-Porter. “I am hopeful that we can compromise to avert these self-inflicted wounds from Washington, but I refuse to accept any plan that fails the test of balance by leaving corporate tax loopholes open and closing the pathway to the middle class.”

See below for details from the week.

·         Cosponsorship of H.R. 699, the Stop the Sequester Job Loss Now Act

Congresswoman Shea-Porter cosponsored the Stop the Sequester Job Loss Now Act, which eliminates sequestration for calendar year 2013 entirely while reducing the deficit by more than the amount of the scheduled across-the-board spending cuts. It makes specific policy choices that reduce the deficit in a balanced way, with a mix of spending cuts and revenue increases. The bill also calls for a balanced solution to stop the full multi-year sequester.

·         Statement to the House Budget Committee about the impact of sequestration on New Hampshire

Congresswoman Shea-Porter issued a statement to the House Budget Committee about the effects of sequestration on New Hampshire, specifically highlighting the importance of the Portsmouth Naval Shipyard to the region’s economy and the country’s national defense. She encouraged the committee to replace sequestration’s arbitrary cuts with a balanced plan that responsibly cuts spending and removes unnecessary tax breaks for special interests, saying, “In order to keep our national defense strong, I ask you to restore the budget of the Portsmouth Naval Shipyard to the funding level that existed prior to implementation of the defense sequester.”

·         Voting Against the Continuing Resolution that, according to the National Journal, “embraced sequestration”

Congresswoman Shea-Porter voted against a Continuing Resolution that reinforces the mindless cuts that will hurt hiring and incomes, slow the recovery, and keep deficits larger than otherwise.

·         Meeting with the New Hampshire Veterans

Congresswoman Shea-Porter met with New Hampshire veterans to talk about the sequester’s impact on our national security. Although the Department of Veterans Affairs is exempt from sequestration, the Department of Labor’s Veterans Transition Assistance Program, which serves over 150,000 veterans a year, would have to reduce operations – leaving thousands of transitioning veterans unserved as they move from active duty to civilian life.

·         Meeting with Major General William N. Reddel III, The Adjutant General, New Hampshire

Congresswoman Shea-Porter spoke with General Reddel about her commitment to averting sequestration.

·         Cosponsorship of H.R. 900, the Cancel the Sequester Act of 2013

The set of across-the-board cuts passed into law by the previous Congress – of which Shea-Porter was not a member – was purposely designed to be a bad idea and was never intended to become law.  It was supposed to be so unthinkable as to force a compromise – but it failed.  With Congress unable to craft a bipartisan agreement that takes the sequester off the table, Washington has a duty to avert these catastrophic cuts by any means necessary. That is why Congresswoman Shea-Porter cosponsored the “Cancel the Sequester Act,” a one-sentence bill that would repeal the section of the Budget Control Act of 2011 that created the sequester.

Today, the Bureau of Labor Statistics reported that the U.S. economy created 246,000 private sector jobs in February and unemployment dropped to 7.7%. This is welcome news and continues to build on 36 consecutive months of private sector job growth. But in order to continue this momentum and avoid the 750,000 American jobs set to be lost this year due to sequestration, Congress must do their job and replace these haphazard cuts with a balanced approach that reduces spending and increases revenue.

Is there still a line between “government” and “business”?

I’ve been reading through that 2009 Interim Report to Congress about defense spending in Iraq and Afghanistan.  Of all the report’s conclusions and recommendations, here’s the kicker:

“The government still lacks clear standards and policy on inherently governmental functions.” 

In other words, we have gotten so used the government privatizing things that we don’t even stop to think about it anymore.

PBS Prisons for Profit

Click here to watch the PBS show “Prisons for Profit”

Holding people in prison.  Shouldn’t that be an inherently governmental function?  Why has it become a multi-billion dollar private industry, instead?

Taxation.  Shouldn’t that be an inherently governmental function?  Not if you have political connections.  Not if you live in Pennsylvania.  Or California.  Or Virginia.  Or Wisconsin.  (Or lots of other places here in the good ol’ United States.)

Eminent domain.  Inherently governmental?  Not since Kelo.  Just ask anyone standing in the way of the Keystone XL pipeline.

Criminal investigations, searches and seizures.  Inherently governmental function?  Not if you live in Arizona.  Or if your child goes to school there.

Counterterrorism?

War?

Where is the line?  Aren’t there still some things that are “inherently governmental” and should never be contracted-out to for-profit corporations?

And how much are they profiting, anyway?  In a 2011 survey, 63% of government contractors reported making profit rates of more than 5% of revenues (26% of the companies made more than 10% profit).

But it’s still supposed to be cheaper, right?  Another 2011 report found that government contractors pay their employees total compensation worth an average of 1.83 times more than what federal employees are paid.

How much money are we talking about?  It’s hard to tell.  Federal outsourcing was $500 billion a year in 2008.  Since then, the Obama Administration has saved taxpayer money by in-sourcing.

But look at the hoopla about Sequestration.  Remember that infamous George Mason University report calculating that the sequester would “cost the US economy 2.14 million jobs”?

That report was produced for the Aerospace Industries Association, which describes itself this way:

shapes public policy that ensures the US Aerospace, Defense and Homeland Security Industry remains preeminent and that its members are successful and profitable…

AIA lobbyingThe AIA has been investing a lot of money lately, to ensure that its members are successful and profitable.  (Read more here.)

And Rep. Hal Rogers’ bill to avoid a government shutdown?  Looks to me like that was crafted to protect government contractors from the effects of sequestration – at the expense of federal employees and programs for the poor.

Just where IS that line between “government” and “business”?

Does it even still exist?

Fund the Government?
House GOP protects corporate interests, instead

budget_cutsThe House has passed a bill to keep the federal government from shutting down on March 27th.

According to Appropriations Committee Chairman Hal Rogers, the bill:

  1. provides $2 billion more than the President requested for non-war Defense funding – as well as an additional “$87.2 billion for Overseas Contingency Operations (OCO) for Defense activities related to the Global War on Terror.”  It also includes $521 million more than the President requested for defense technologies research and development.
  2. includes “a provision allowing additional funding to ensure the safe and secure operation of Federal Prisons.”
  3. requires “Immigration and Customs Enforcement to sustain the mandated capacity of 34,000 detention beds.”
  4. extends the current pay freeze for federal employees.

Want to play connect-the-dots?

  1. Corporate profits of defense contractors are almost back to their pre-recession high.  Yet the defense industry “mobilized in a major way to stop the cuts to the Pentagon budget. The main thrust of the offensive has been a huge public relations campaign aimed at convincing Americans that the cuts would devastate defense contractors and the broader economy, causing the loss of about a million jobs.”  Connect the dots?   Chairman Rogers’ bill included defense funding levels that were higher than the President requested.  (For a sampling of how private contractors have wasted tax dollars, read the June 2009 Interim Report to Congress here.)
  2. The private prison industry didn’t actually feel the recession.  Contracting with the federal Bureau of Prisons is a growing business: up by almost 14% between 2010 and 2011.  Now check out the lobbyists: Corrections Corporation of America employed 33 different lobbyists last year.  (Geo Group had only four lobbyists; but one of them used to be Special Assistant for Legislative Affairs for President George W. Bush, so he probably knows a few people.)  Connect the dots?   Chairman Rogers’ bill provides “budget security” for federal prisons.
  3. And then there’s immigration.  Ever notice how – even though seven out of 10 Americans want there to be an easier path to citizenship – that idea hasn’t actually gotten very far in Congress? Ever wonder why Congress set a minimum number of ICE “detention beds”?  Just follow the money.  Private prisons spend $45 million on lobbying and rake in $5.1 billion for immigrant detention.  The industry invests in campaign contributions to key legislators.   Connect the dots?  Last month, sequestration cuts prompted ICE to release low-risk detainees from custody, dropping the number of detainees to less than 31,000.   Chairman Rogers’ bill requires ICE to resume paying for all 34,000 detention beds.  (And BTW, the cost of a detention bed is comparable to many hotel rooms.)
  4. And then there’s the pay freeze for federal workers.  (Are we ever going to have an economy that works for the 99%?)  Here’s the reality that most of us have known our entire working lives: productivity has skyrocketed, while our wages have remained relatively flat.  Growth of real hourly compensation for production/nonsupervisory workers and productivity, 1948–2011. Economic Policy Institute
    Ever since Richard Nixon was President, economic growth has been transformed into corporate profits rather than increased wages.  How does the 1% keep that trend going?  By pitting workers against each other.  By telling us to consider ourselves lucky to even have a job.  By breaking union contracts, cutting benefits and implementing pay freezes.  This move is straight out of the ALEC playbook.  Connect the dots?  Chairman Rogers’ bill extends the federal employee pay freeze and, by maintaining the sequester, mandates unpaid furlough days – guaranteeing that federal workers will be losing ground on wages, just like the rest of us.

Yep, the House GOP still thinks they were elected to protect corporate interests.  Nope, they still don’t care how their budget will affect America’s families.  Bottom line: this budget reflects the priorities of the House GOP.

Where your treasure is, there your heart will be also.”

(Where can hungry five-year-olds find a good lobbyist?)

How do we get an economy that works for the 99%?

Day 20 Occupy Wall Street October 5 2011 Shankbone 3It’s official: Wall Street has recovered from the recession. Yesterday,

The Dow Jones Industrial Average rose to its highest level ever, erasing losses from the financial crisis after a four-year rally fueled by the fastest profit growth since the 1990s and monetary stimulus from the Federal Reserve. About $10 trillion has been restored to U.S. equities as retailers, banks and manufacturers led the recovery from the worst bear market since the 1930s.

Meanwhile, back in the real world, America’s middle class is still losing ground.

In the wake of the Great Recession, millions of middle-class people are being pinched by stagnating incomes and the increased cost of living. America’s median household income has dropped by more than $4,000 since 2000…

The unemployment rate has been getting better – but for most American families, life is still getting worse.

One of the most disturbing trends of the recession is still very far from being reversed. America’s middle-class jobs have been decimated since 2007, replaced largely by low-wage jobs.

In other words, wages are still falling. From the San Francisco Federal Reserve Bank:

Many middle-class workers have lost their jobs and, if they have been able to secure new employment at all, find themselves earning far lower wages post-recession… on average over the next 25 years, these workers will earn 11% less [than they would have, if they hadn’t lost their jobs during the recession].

Back in Washington, DC, what are the politicians doing?

  1. House Republicans believe they’re “on the side of the angels” on defense spending. They are coalescing around a budget deal that would allow the Pentagon more flexibility to move money around (for instance, using savings that resulted from troop withdrawals to restore funding to military contractors).
  2. House Budget Committee Chairman Paul Ryan is working on next year’s budget. Should be interesting to read. The last time he proposed a budget, a whopping 62% of the budget cuts came from programs that help low-income people.
  3. And Ryan still plans to privatize Medicare. His only question: what should the cut-off age be? Should current Medicare benefits be guaranteed for people 55-and-older? 56-and-older? Even older than that? [The League of Women Voters analyzed Ryan’s proposal and calculated that the voucher system would pay only 32% of the cost of covered procedures, leaving patients to pay the other 68% of the cost. Read Time Magazine’s piece on medical costs here.]

Obviously, last November’s election didn’t change the dynamics in Washington.

What is it going to take, to do that?

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