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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.

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?


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.



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?

Protect Millionaires? The Sequester Didn’t Have to Be

NH Citizens Alliance for Action calls on Congress to end the cuts by reining in Pentagon Waste and Making Big Corporations and Millionaires pay their Fair Share 

NH Citizens AllianceConcord, NH — NH Citizens Alliance for Action Interim Executive Director Kary Nealle Jencks issued the following statement on the automatic federal spending cuts, or “sequester”:

“Sequester never had to happen. And it should not have happened. At a time when our communities and our families are just starting to do better, the last thing we need is one million people forced out of work between now and the end of the year. The last thing we need is services to families cut, things like nutrition for mothers and babies eliminated, teachers laid off, and food inspectors and air traffic controllers furloughed.

“Instead of standing for a common sense budget solution Congressional Republicans chose to side with corporate campaign contributors. They made it happen to protect millionaires and big corporations from paying their fair share. But there is a way out of this mess.

“Everyone must pay their fair share. Congress needs to end tax breaks for corporations that ship jobs overseas and start requiring the wealthiest Americans pay taxes at the same rate they paid in the 1960s, 1970s, 1980s and 1990s. And once and for all, it is time to put an end to wasteful Pentagon spending – beginning with the albatross known as the F-35 fighter jet.

“The issue before us today is not the size of our government. The issue is who our government works for – the super-rich and CEO campaign contributors or working families and the middle class? We need a Congress that stands – and an America that works – for all of us. Because we are all in this together.”

The Republicans Make an Offer on Sequestration

GOP House members have clarified their position on what they’re willing to “compromise” in order to avoid sequestration.  From today’s NY Times:

Republicans say they are willing to instead get some savings from programs not covered by Congress’s annual spending bills, like food stamps, Medicaid and children’s health insurance.

Read that one more time.  Food stamps, Medicaid and children’s health insurance.

What the Republicans aren’t willing to compromise on is “more revenue” from those at the top of the economic scale.  No more revenue from the 1%.  No more revenue from the 0.001%.  No more revenue from the Top 400.

Remember these two charts?
Top Tax Rates 1952-2008
Top 400 Taxpayers Dividend Income

Hey folks, it’s Lent.  It’s winter, and still a long way to go until spring.  A good season to look more closely at what our various faiths teach us about our obligations to our fellow men.

Matthew 25:34-36 Then the king will say to those at his right hand, “Come, you that are blessed by my Father, inherit the kingdom prepared for you from the foundation of the world; for I was hungry and you gave me food, I was thirsty and you gave me something to drink, I was a stranger and you welcomed me, I was naked and you gave me clothing, I was sick and you took care of me, I was in prison and you visited me.”

Are you Catholic?  “The equal dignity of human persons requires the effort to reduce excessive social and economic inequalities. It gives urgency to the elimination of sinful inequalities.”  Read more from the Catechism here.

Lutheran?  “Human impoverishment, excessive accumulation and consumerism driven by greed, gross economic disparities, and the degradation of nature are incompatible with this reign of God.”  Read the full statement here.

Methodist?  “As a church, we are called to support the poor and challenge the rich. To begin to alleviate poverty, we support such policies as: adequate income maintenance, quality education, decent housing, job training, meaningful employment opportunities, adequate medical and hospital care…”  Read the full statement here.

Southern Baptist?  “We should work to provide for orphans, the poor, the abused, the old, the weak, and the sick.”  Read more here.

Episcopal? Anglican? Evangelical Lutheran?  “Now is the time to work for justice as well, to advocate for more substantial long-term solutions that will create an anti-poverty agenda which we can all support. We will continue to encourage members of our congregations to meet immediate needs but also ask them to join together and pressure our governments to focus seriously on reducing poverty. We must continue to advocate for decent employment and to enhance our social safety net — and to ensure that all have the opportunity to access both.”  Read the joint Pastoral Letter here.

Jewish?  “Our Rabbis taught: ‘If all the sufferings and pain in the world were gathered on one side of a scale, and poverty was on the other side, poverty would outweigh them all.’ Jewish tradition recognizes poverty as the single greatest cause of human suffering. It calls on us to respond to the needs of the poor with singular urgency.”  Read the full essay here.

Muslim?  “But he who is a greedy miser and thinks himself self-sufficient/And gives the lie to the best/We will indeed make smooth for him the path to Misery/Nor will his wealth profit him when he falls headlong (into the Pit).”  Read more about the Qur’an and poverty here.

Sequestration looms.  The Congressional stalemate threatens our nation’s economy.  And what’s that list of things that GOP House members are willing to “compromise” on?

Food stamps, Medicaid and children’s health insurance.

For shame.


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”?


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