• Advertisement

GOP House members still in a “fighting” mood?
Could be very costly.

Last person leaving, please dock the doors
Hoping for bipartisan cooperation, now that the election is over?  Think again.

The weekend before the inauguration, Republicans gathered in Williamsburg to discuss strategies for “fighting” the President.  Just a week later, former Vice Presidential candidate Paul Ryan was telling a gathering of conservatives that “Republicans control both the House and most of the statehouses.  So we have to oppose the president and the Senate on some fronts—and engage them on others…”

Does that sound like cooperation to you?

Looks like it’s going to be an interesting next few months.  Two dates to mark on your calendar:

  • On March 1st, the sequestration cuts are scheduled to go into effect.  Cutting government services through these automatic, across-the-board cuts is expected to send the economy back into recession.  One example:  according to a study commissioned by the airline industry, the FAA’s share of the sequestration cuts is about $1 billion a year.  That cut would reduce the nation’s air traffic between 5% and 10%, and the country would lose between 66,000 and 132,000 jobs related to air transportation.  The irony?  The economic losses would cause tax revenues to drop by as much as $1 billion a year.  (Hmmn… $1 billion in tax revenues lost because of a $1 billion spending cut.  Not a whole lot of deficit-reduction going on, is there?)
  • On March 27th, the “continuing resolution” that funds federal government will expire.   That means a possible “government shutdown”According to Politico, a majority of GOP House members “are prepared to shut down the government to make their point. House Speaker John Boehner ‘may need a shutdown just to get it out of their system,’ said a top GOP leadership adviser.”

What happens if the government shuts down?  Federal employees who are deemed “essential” are still required to go to work – they just don’t get paid until after Congress approves a bill to pay them.  The last time there was a significant government shutdown, almost a half-million federal employees were required to work without pay for three weeks.

The economic damage went far beyond the family finances of federal employees.  The crisis also caused 11 states to suspend unemployment insurance, due to lack of federal funds.  Veterans’ services were suddenly unavailable (including counseling, vocational rehabilitation, and pension and education payments).  The crisis affected the oil industry, leaving more than 10,000 barrels a day untapped while companies waited for federal reviews.  The tourism industry suffered millions of dollars in losses each day of the shutdown, because passports and visas were not processed.   The housing industry suffered when $800 million worth of mortgage loans were delayed.  The crisis halted cleanup of 609 toxic waste sites.  It left hundreds of thousands of children in limbo, waiting for foster care or adoption.

And that was only a partial government shutdown.  Most of the government still had funding, during that shutdown.  (Just imagine what may happen on March 27th!)

There’s a moral here, folks.  Government services are integral to our nation’s economy.

Is there any hope that Congress could learn that lesson, in the next month or so?  Or is the GOP going to insist on doing economic damage, “just to get it out of their system”?

 

Less than a month to go! Republicans are chasing wild geese while the federal government heads toward default

Canadian GeeseThere’s less than one month to go until the federal government can’t fudge its debt limit anymore. Last week, the US Treasury announced it could run out of artificially-created “headroom” as soon as mid-February.

Ever since then, Republicans have been trying to turn the debt-limit headlines to their advantage. But if you look closely enough at these “wild goose chases”, they just show the growing distance between GOP rhetoric and the reality the rest of us are living in.

——————–

Their first idea? Wait things out. Then, once the Treasury runs out of headroom, just pick and choose which bills to pay. Or, in Republican-speak, “prioritize spending.” Their priorities, according to Reuters: pay the bondholders first; then pay Social Security and military salaries.

The first problem with this idea? The Treasury’s Inspector General has already told Congress that “prioritizing spending” is not – at this point in the crisis – actually possible.

Treasury noted that it makes more than 80 million payments per month, all of which have been authorized and appropriated by Congress… Treasury’s [accounting and computer] systems are designed to make each payment in the order it comes due.

In other words, the system simply isn’t set up to pay some bills and ignore others. How long would it take to completely restructure the federal government’s payment systems, in order to “prioritize” which bills get paid? Undoubtedly longer than the debt-limit “headroom” will last.

Second problem with this idea? How much money will it cost, to restructure the Treasury’s payment systems? Maybe some GOP campaign contributor would be the only IT vendor qualified to make those changes. But wouldn’t that money be better spent on other things?

Third problem with this idea? Stop and think about this, for a minute. Do we really want our country to stop paying its bills, even just some of its bills? Do we really want our country to fulfill its obligations to a select few, and ignore the rest? What would that say about America? (Maybe this is really the first problem with this idea. What are the Republicans thinking?)

——————–

So then, the Republicans went off to a retreat at the Kingsmill Resort in Virginia. (I’m guessing the GOP missed the irony in starting Martin Luther King Day weekend at a former slave plantation. Whatever happened to the Party of Abraham Lincoln?)

There, among three championship-caliber golf courses, GOP members announced their newest idea to deal with the debt limit crisis. The House GOP will concede to a three-month increase in the debt limit, but only if Congress passes a budget within those three months.

Peter PanOk, it’s starting to sound like Peter Pan’s “Neverland” here. Congress created the debt-limit crisis by approving spending but refusing to authorize the debt limit increase. Now the GOP wants to postpone that crisis by creating another crisis.

If nothing else, this really ought to draw attention to just how dysfunctional Congress has become in recent years. They’re answering one failure of Congress with another failure of Congress.

Yes, passing a budget is one of the Legislature’s most fundamental responsibilities. And yes, it has been years since Congress actually passed a federal budget. But isn’t it time to ask, why?

Think about the usual budget process (which is very similar to the way New Hampshire’s Legislature passes the state budget). Usually, the House passes a version of the budget. Then the Senate passes a version of the budget. Then a conference committee figures out a compromise between the two versions. Then the conference version goes back to the House and the Senate for an up-or-down vote.

Do you really think the House and Senate are going to be able to agree on a version of the budget in the next three months?  Congress has been at a stalemate for years.  The last Congress was the most unproductive Congress since they started keeping records.  [Want to know what they did manage to agree on? 17% of the bills that were actually passed involved naming post offices or other public buildings].

But now, after a few days’ “retreat” at a plantation-turned-resort, House GOP members think they’re going to be able to turn this situation to their advantage.

No word yet on whether this latest Republican goose-chase is going to amount to anything more than just weekend headlines.

——————–

Wondering what’s the latest on that “headroom”?

If you remember, our federal government hit the debt limit on December 31st, and the US Treasury started taking “extraordinary measures” to keep the country from defaulting on its obligations.

Smashed Piggy Bank RetirementLast week, the Treasury started starting paying government bills by using federal employee retirement funds to create “headroom” under the debt limit. The “G Fund” is a 401(k)-style retirement program with more than 3 million enrollees, including members of the military.

The law allowing retirement monies to be used to create “headroom” also promises to make members’ accounts “whole” after the crisis has passed. That’s what happened the last time there was a debt limit crisis, back in August 2011; and what happened after the debt-limit crises in 2006, 2004, 2003, and 2002. [Wait… am I just imagining there’s a correlation between debt-limit crises and the Bush-era tax cuts?]

But there’s no word on what happens if this particular debt-limit crisis isn’t solved.

And, no word on what happens if House Republicans decide they want to “reform” federal employees’ retirement benefits again.

———-

And yes, those unaffordable-but-Congressionally-mandated US Postal Service payments are part of the “extraordinary measures” the Treasury is now taking to keep our government from defaulting on our debt.

“The Postal Service would still have positive net revenue today except for … a requirement that Congress imposed on it in 2006. No other public or private business in America faces this onerous requirement.” Read the letter signed by 82 Members of Congress here.

——————–

One last word about Paul Ryan: he must truly be a special guy. Ordinarily, he would have been replaced as House Budget Committee Chairman this year because of GOP “term limits”. It looks like at least three other GOP Committee Chairs will lose their positions, but Speaker Boehner has already decided to give Chairman Ryan a waiver and allow him to stay on. Read more here.

Only Two Months until the NEXT Congress-Created Crisis

Congress creates another crisisLate last night, one-third of House GOP members voted with the Democrats to pass legislation avoiding the “Fiscal Cliff”.  Congressman Bass voted in favor of the bill; Congressman Guinta voted against it.

Even though the Senate had passed the bill almost unanimously, until dinnertime, it looked like the bill would fail in the House.  What happened at dinnertime?  The House took up a brand-new bill bashing federal employees and attempting to rescind their 0.5% cost-of-living increase, which is scheduled to go into effect at the end of March.  [Federal employees have already supplied $108 billion in “budget savings” through a two-year pay freeze and increased retirement contributions.]

Sure, there were only a few hours left for Congressional action.  Sure, there was no chance whatsoever that a brand-new bill would become law.  The House still took 90 minutes to debate it and hold a roll call vote. [Both Guinta and Bass voted for the bill.  Please remember that, if either of them run again for Congress in 2014.]

And after that last symbolic attack on federal employees, GOP House leadership was finally able to get around to the business of avoiding the Fiscal Cliff.  Gotta wonder about their priorities.

When it finally passed at 11:00 last night, the Fiscal Cliff bill was a true compromise.  It included concessions that angered people on both sides.   (Read the bill here.)

But it also set up yet another Congress-created crisis, scheduled to hit in only two months.

  • The bill did not address the federal debt limit – and two months from now, the Treasury will have exhausted the debt limit “headroom” created by taking “extraordinary measures” with government and postal employee pension funds.
  • The bill did not resolve “sequestration” spending cuts – but rather postponed them for two months.

So, the nation is rolling straight from one Congress-created crisis into another Congress-created crisis.

Gotta wonder why Congress keeps creating crises.  (Journalist Naomi Klein has an interesting theory about how crises – real or perceived – are used to further corporate goals.  Read more here.)

——————–

One of many things the Fiscal Cliff bill didn’t address was restoring the state share of federal estate taxes.

In a “sponge tax” system dating back to 1924, estate tax revenues were historically shared between the states and the federal government.  Back in 2001, Congress federalized the states’ portion of these revenues to help pay for the “temporary” Bush tax cuts.

Restoring the “sponge tax” system could mean more than $3 billion in annual revenues for state governments.  New Hampshire could receive an estimated $27 million in annual revenues.  Read more here.

frigateThe estate tax has a long and patriotic history.  It was created to raise funds for the country’s first Navy, and was used to fund almost every war before Iraq.  Read more here.

But for the past few decades, “members of a handful of super-wealthy families have quietly helped finance and coordinate a massive campaign to repeal the estate tax.  …The families also have helped finance outside groups that have spent millions on fear-mongering ad campaigns intended to sway public opinion against the estate tax.”  Read more here.

Who knows?  Maybe restoring these state revenues will be a part of whatever bill resolves this next Congress-created crisis.

Adding ‘Headroom’ to the Debt Limit? Thank our Federal Employees and Postal Carriers

US CapitolA few days ago, Treasury Secretary Timothy Geithner told Congress that the federal government would reach its debt limit at the end of this year.  As of January 1st, Secretary Geithner will be taking “extraordinary measures” to buy another two months’ time  for Congress to resolve its self-created fiscal cliff/debt limit crisis.

What are those “extraordinary measures”?  Almost all of them involve using the retirement funds of federal employees and postal workers to create artificial “headroom” under the debt limit.  You can read the details here.

Create your own fiscal crisis… then use it as justification to borrow from employees’ retirement funds (while complaining that long-promised retirement benefits are “not affordable”).  That’s what politicians tried to do here in New Hampshire, back in the early 1980s.

We’re having déjà vu all over again, watching the same scenario play out on the national stage all these decades later.

As of Tuesday, federal and postal employees’ retirement funds will become “headroom” under the debt limit.  Maybe the extra two months will give Speaker Boehner time to reconsider the GOP’s  allegiance to the ultra-rich.  Maybe it will give Congress time to fix the crisis it created.

In the meantime: to all those federal employees and postal carriers out there, “Thanks for the headroom!”

Read more about political attacks on federal employees here.

Read more about political attacks on the US Postal Service here.

 

According to Bush Economists: His Tax Cuts Don’t Really Improve the Economy

Another thing to remember, as you’re watching the Fiscal Cliff negotiations:

Back in 2006, President George Bush asked the US Treasury Department to analyze what would happen to the economy if his tax cuts were made permanent.  Treasury economists conducted a “dynamic analysis” of the tax cuts, which was clearly intended to provide a political justification for making the tax cuts permanent.

This is the Treasury’s “best case” scenario, which
is based on extremely optimistic assumptions.
Source of chart: Center on Budget and Policy Priorities.

But here’s what they found, instead:

even under favorable assumptions, making the tax cuts permanent would have a barely perceptible impact on the economy.  Under more realistic assumptions, the Treasury study finds that the tax cuts could even hurt the economy. In addition, the study casts doubt on claims that the tax cuts are responsible for much of the recent growth in investment and jobs.  It finds that making the tax cuts permanent would lead initially to lower levels of investment, and would result over the longer term in lower levels of employment (i.e., in fewer jobs).

What ?!?

The Treasury study finds that making the tax cuts permanent would reduce long-run labor supply (i.e., the number of people working and the number of hours they work) by 0.3 percent.

Three-tenths of one percent in today’s labor market translates into about 468,000 jobs.

If we end the Bush tax cuts, will those jobs come back?

The Magical Math of Boehner’s Congress: tax cuts don’t ‘cost’ anything

House Speaker John Boehner
Another thing to remember, as you’re watching the Fiscal Cliff standoff:

When John Boehner was first elected Speaker of the House of Representatives, he changed the Rules.

Yes, the actual Rules that the House uses to structure debate on pending legislation.

One of those changes tells you a lot about Boehner’s priorities.

Boehner decreed that the House would not consider any additional federal spending without an identified “offset”.  For example, in order to increase spending on Medicaid, the House would have to “offset” that spending through cuts to other programs (for example, by cutting Food Stamps).

BUT – Boehner decided that tax cuts would be exempt from this. Under Boehner’s Rules, Congress could pass any tax cut proposal without having to “offset” – or even consider! – the revenue cost of the legislation.  [And yes, the Bush tax cuts are specifically mentioned, and specifically exempted from any Congressional consideration of their cost.]

In other words, under Boehner’s Rules, Congress will not add a dime to the deficit through increased spending.

But Congress can increase the deficit by any amount, as long as the money is being “spent” on tax cuts.

Yes, for more than a decade, our country has been borrowing to pay for the Bush tax cuts.  And under Boehner’s Rules, Congress can increase the deficit as much as it wants – as long as the borrowed money is paying for tax cuts, not spending.

Boehner’s “Magical Math” sheds a different light on the Fiscal Cliff “negotiations”, doesn’t it?

Speaker Boehner’s ‘New Offer’ is ‘to make top 2% tax cuts permanent’?!?

Speaker Boehner

Was House Speaker Boehner joking?

The press is beginning to report the details of his latest “offer” in the fiscal cliff negotiations.

Guess what?

The GOP’s newest proposal is to make the Bush tax cuts for the top 2 percent of American… permanent.

Read about it here.

Guess the GOP still thinks they should be able to dictate the terms of the fiscal cliff “compromise”.  What a way to “fix” the crisis that Congress created.  Most of us are still hurting from one of the worst recessions in history; 12 million Americans are still unemployed.  Shouldn’t the GOP be concerned about something other than protecting the wealthy?

Fiscal Cliff: Who is “entitled” to what?

Something else to remember, as you’re watching news coverage of the Fiscal Cliff negotiations:

The tax rates that GOP Congressional leaders are trying so hard to defend are relatively recent – and the public has never supported them.

Washington Post Poll September 11 2001Just months after the first round of tax cuts was passed, in 2001, a Washington Post poll found that 57% of Americans wanted to roll back the tax cuts in order to preserve the federal budget surplus. (Yes, we had a surplus, back then.)

There’s more:

President Bush’s budget director had just warned congressional Republicans that “it was likely the government would tap the Social Security surplus this year, contradicting what he had been saying only a few weeks earlier.”

That same Washington Post poll found that “an overwhelming 92 percent of those surveyed said they opposed using Social Security funds” for things other than retirement benefits.

That was in 2001. Two years later, it was clear that the first round of Bush tax cuts hadn’t “jump-started” the economy – so the White House pushed through another round. This time, the bill had so little support it almost didn’t pass the Senate. GOP stalwarts John McCain, Lincoln Chafee and Olympia Snowe all voted against it. The Senate split 50-50 – and Vice President Dick Cheney cast the deciding vote.

That’s right… Dick Cheney was responsible for passing the tax cuts that House Speaker John Boehner is now trying so hard to defend.

“Entitlements”?

In recent weeks, Speaker Boehner has been talking about tax cuts for the wealthy as if they’re somehow sacred. He doesn’t seem to care what he has to sacrifice, to protect those high-income taxpayers.

Speaker Boehner is insisting on cuts to “entitlement programs” such as Social Security, Medicare and Medicaid – before he will agree to any fiscal cliff “compromise”.

And if taxes are going to be raised – well, guess who Speaker Boehner expects to pay the price? Here’s Senate President Harry Reid’s analysis of Speaker Boehner’s latest proposal, earlier today:

“Their proposal would raise taxes on millions of middle-class families,” Reid said on the Senate floor. “Their plan to raise $800 billion in revenue by eliminating popular tax deductions and credits would reach deep into pockets of middle-class families.”

Speaker Boehner wants to cut “entitlements”?!

The working families of America have paid into the Social Security system for decades, expecting to get benefits back when we retire.

High-income taxpayers owe their low tax rates to former Vice President Dick Cheney.

Who, exactly, should be entitled to what?

Read more about the fiscal cliff here.

Two Things to Remember

Sample Social Security CardAs our country heads toward the fiscal cliff, Republican Congressional leaders are going to be talking a lot about “entitlement reform”.  Their position: they believe any “compromise” they make on tax revenues should be matched by deep cuts to “entitlement” programs.

Two things to remember, as you listen to Karl Rove and his buddies try to sell their position to the American public:

  1. For more than a decade, our country has borrowed from the Social Security Trust Fund to pay for tax cuts for the wealthy.
  2. The Social Security system has already turned the corner.  On average, working families will receive less in Social Security benefits than we have paid into the system in taxes.  “A married couple retiring last year after both spouses earned average lifetime wages paid about $598,000 in Social Security taxes during their careers. They can expect to collect about $556,000 in benefits, if the man lives to 82 and the woman lives to 85.”

Just how much more do they want us to “compromise”?

Changing the Rules of the Game


In Congress – as in wrestling – sometimes the rules make the all the difference in who wins or loses.

That’s why the upcoming fight over the Senate filibuster means a lot to working families.

The filibuster is a procedural method that the minority party can use to perpetually delay any legislation it doesn’t like.  If a bill doesn’t get to the Senate floor for a vote, it doesn’t ever get passed – even if a majority of the Senate would vote to approve it.  It’s a back-door way for the minority party to kill legislation, or at least hold the bill up in Committee until it is amended to the satisfaction of the filibustering Senators.

photo by Diane Beckwith-Zink via Flikr

Massachusetts Senator Scott Brown
photo by Diane Beckwith-Zink via Flikr/Creative Commons

Remember two years ago, when Massachusetts Senator Scott Brown “single-handedly” blocked an extension of unemployment benefits?  Senate Republicans used the filibuster to hold up the bill until it was amended to include an extension of Bush-era tax cuts for the wealthy.  (The final version cost $900 billion; but only 6% of that cost was for unemployment benefits.)

That’s how the filibuster works – and works against working families.

Using the Senate filibuster to kill legislation is such an “inside game” that – at least as far as we can tell – no one has been tracking filibusters in recent years.  But during the last campaign season, Progress Massachusetts looked closely at Scott Brown’s voting record and came up with 40 bills that would have passed the Senate – if they hadn’t been killed by a Republican filibuster.  The list includes:

  • Restoring American Financial Stability Act of 2010 (the original financial regulatory reform bill);
  • Creating American Jobs and Ending Offshoring Act;
  • Emergency Senior Citizens Relief Act of 2010;
  • American Jobs Act of 2011;
  • Rebuild America Jobs Act;
  • Middle Class Tax Cut Act of 2011; and
  • The Buffett Rule (a 30% effective tax rate on income exceeding $1 million).

All of those bills would have passed the Senate – if they had ever gotten to the floor for a vote.

So, here’s what may be changing:

Yesterday, Majority Leader Harry Reid said that when the Senate is sworn in next January, “he will attempt to diminish the power of Republicans to slow or stop legislation by putting limits on the filibuster. …Mr. Reid would like to limit what procedural motions are subject to filibusters, and to force senators to return to the practice of standing around forever, reading the phone book or what have you, if they choose to filibuster a bill before its final passage.”

Yes, it will be just a procedural change to Senate Rules (if it happens).

But just think where our country might be, now, if the Senate had been able to actually vote on all those bills that Scott Brown helped block.

 

  • Subscribe to the NH Labor News via Email

    Enter your email address to subscribe to this blog and receive notifications of new posts by email.

    Join 12,540 other subscribers

  • Advertisement

  • Advertisement