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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?

Kuster Cosponsors Bipartisan Bill to Cut Wasteful Spending, Consolidate Duplicative Programs

Rep_KusterCommon sense legislation would cut through gridlock to help save billions while protecting middle class

WASHINGTON, D.C. – As Congress debates ways to responsibly reduce the deficit and stop the sequester, Congresswoman Annie Kuster (NH-02) today announced that she is cosponsoring bipartisan legislation that could help the government save billions of dollars, cut wasteful spending,  and consolidate duplicative programs while protecting important services for New Hampshire families. The Government Waste Reduction Act would advance a series of waste-cutting recommendations that were included in recent reports from the Government Accountability Office (GAO) but await Congressional action.

“At a time when Congress is in need of balanced, bipartisan ideas to get rid of the sequester and responsibly reduce the deficit, this type of common sense legislation should be a no-brainer,” Kuster said. “The Government Waste Reduction Act will cut through Congressional gridlock to help save billions of dollars and streamline services – all while protecting priorities that seniors and middle class families count on.”

“Cutting waste and duplication in government shouldn’t be a Republican or Democratic issue – it’s just common sense,” Kuster continued. “These proposals alone won’t solve all of our fiscal challenges, but they are sensible steps that will make our government more efficient, effective, and accountable to the American people.”

In 2011 and 2012, the GAO released reports outlining wasteful and duplicative government programs that should be consolidated or eliminated. For example, the reports highlight overlap between 53 federal programs to assist entrepreneurs and small businesses, twenty entities that provide housing assistance, and over 200 Department of Justice grant programs.

The Government Waste Reduction Act would create an independent, bipartisan panel to produce legislation incorporating GAO’s waste-cutting recommendations. This legislative proposal would receive an expedited, up-or-down vote in Congress, and could not include cuts to benefits for seniors, veterans, or military servicemembers.

The legislation was introduced by freshman Rep. Cheri Bustos (IL-17) and has been cosponsored by members of both parties.

Today’s announcement builds on Kuster’s commitment to bringing Republicans and Democrats together to stop the sequester and reduce the deficit in a balanced, responsible way that will spur job creation, grow the economy, and protect middle class families. In February 2013, Kuster helped establish the United Solutions Caucus, a bipartisan coalition of Republican and Democratic freshmen focused on resolving our nation’s fiscal challenges in a balanced, bipartisan way.

 

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.

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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.

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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.

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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.

Guinta cut FEMA money

Congressman Guinta has decided that it is important for congressional candidates to weigh in on state issues, yet in the wake of Hurricane Sandy, he has dodged questions about why he voted to cut funding for the Federal Emergency Management Agency (FEMA).  Congressman Guinta voted for the Ryan budget which cuts disaster preparation and response, and passed a continuing resolution that provided $3 billion less in disaster funding than requested by the President.

“Congressman Guinta has a heartless record of voting to cut the funding for FEMA, money that  communities depend on for disasters,” said Carol Shea-Porter.  “Now, he needs to explain whether or not he agrees with Mitt Romney that FEMA should be privatized or left to the states.  New Hampshire, which has just received a federal emergency declaration, deserves to know why he voted against protecting the state and its citizens.”

Background:

  • Romney’s budget cuts FEMA, on its face, by 40%.  Romney has vowed to cut federal spending to less than 20 percent of GDP by 2016 without touching entitlements or defense. That means that non-defense discretionary spending–which includes FEMA aid–would have to be reduced by an eye-popping 40 percent. The Romney campaign won’t say whether FEMA would be spared from those cuts but stresses that the necessary funding would be available.” Washington Post.
  • On September 23, 2011, Guinta voted in favor of HR 2608, a continuing resolution meant to fund the federal government through November 18, 2011. The legislation provided $3.65 billion for disaster assistance, roughly $3 billion less than what the Office of Management estimated the federal government needed in funding. [HR 2608, Vote #727, Office of Management and Budget, 9/5/11; The Hill, 9/23/11]
  • Ryan budget could hammer storm aid, critics say:  Mitt Romney says he wants to give states more power to deal with disasters like Sandy. But his running mate’s budget plan would threaten states’ ability to respond to massive storms, some experts say.  Paul Ryan’s House-passed budget would cut non-defense discretionary funding by 22 percent starting in 2014, according to the liberal-leaning Center on Budget and Policy Priorities, which said in an August report that about one-third of that money goes to state aid for a range of needs including disaster response.  [Politico, 10/30/2012]

 

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