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House GOP Response to Obama Jobs Bill Speech

The House GOP responded to Obama's jobs act speech by writing a letter asking for the text of his proposed legislation. 

Two things are noteworthy here:  the insistence on offsets, and the presupposition that deregulation would do more for creating jobs than unemployment expansion, payroll tax cuts, and credits for hiring the long-term unemployed and the other Obama proposals.

The letter says that Republicans "look forward" to receiving information about the offsets proposed for the jobs proposals.  This  highlights one of Obama's mistakes in the jobs speech and in fact throughout his administration.  He has allowed the GOP to set the agenda.  Even when it is obvious that the economy is stalling, he still walked the "deficit reduction" walk --including calling for changes to workers' earned benefit programs (Medicare and Social Security) in line with the GOP's four-decade campaign to decimate them as unjustifiable 'entitlements'.   That permits the GOP to practice their obstructionism in two places--first, in the jobs-supporting proposals and second, in the pay-for proposals. 

The letter presages that battle by noting that the House GOP wants to look back to GOP-sponsored bills that would "remove government barriers to private-sector job creation". In other words, the GOP is repeating the same worn mantra that government regulation that protects ordinary Americans from the air, water, land pollution, bad labor practices, and other anti-consumer actions of a too-powerful corporate business sector is the thing hindering job creation. 

Everyone (except perhaps the low-information American voters who have been constantly misled on this issue by the corporate media) knows that isn't true.  What hinders job creation is the lack of a consumer base to buy the products that would be produced by new jobs.  It isn't regulation--regulation is at most a cost that limits the corporate managers' and owners' profits, since it forces business to internalize costs that it had foisted off on the public prior to the regulations.  It isn't taxes--taxes are similarly just a cost of doing business.  Remember that corporations have had an enormously profitable time, and they have huge warchests of cash, both abroad and at home.  They have plenty of money to hire if there were only people to buy the products and services to be provided by the new hires.  Until that vicious cycle is broken, stagnation will continue.   

Other than its repetition of the Reaganomics anti-regulation mantra, the letter says nothing in substance.  It claims to approach the Obama jobs proposals with bipartisanship and cooperation.  But the years of the Obama administration have demonstrated that there is no such thing as cooperation among the current Republicans in Congress.

Jon Huntsman's Wall St. J. Op-Ed: warmed over Reaganomics

There he goes again.  Huntsman's op-ed ran in the Sept. 6, 2011 Wall St. Journal: Reigniting the Entrepreneurial Spirit.

As though enterpreneurs aren't being entreprenuers right now.  HOw about the group that made the news last night--two young men who realized that they could repai iPhones and other electronic gear for half the amount that the manufacturers charge and still make a cool profit (YoubreakIFix)?  If you have a good idea and you try to make it work, odds are you can make money off it.  That makes you an entrepreneur.

Huntsman seems to think that making the tax code friendly to Google and other Big Corps is the way to encourage entrepreneurialism.  That's like saying that taxing  the wages of partners in private equity funds at capital gains rates encourages entrepreneurialism--it's a big laugh.  Carried interest managers aren't entrepreneurs; they are speculators who buy cheap, breakup, and sell expensive. 

Huntsman wants "tax simplification, regulatory reform, and changes in energy and trade policy."  That's just more of Reaganomics--tax simplification means tax cuts for business and the 'owner' class, regulatory reform means deregulation, and changes in energy and trade policy mean deregulation and opening up of protected areas for exploitation.  None of those things will create jobs, foster entrepreneurialism, or create a sustainable American economy.

Huntsman says he favors a "revenue-neutral tax overhaul modeled after Ronald Reagan's 1986 tax reform package--which will require taking on sacred cows."  So he is willing to eliminate a few carveouts and deductions, that's good.  But he wants to lower rates even more, that's bad.  In fact, he says "flatter" is "fairer"--that's a weird view of fairness in a country that has consistently favored progressive taxation as a way to ensure that the wealthy pay for the many advantages bestowed upon them by government.  The 1986 tax cut worked as well as it did (it was no panacea) because rates could be cut in half and still be at 35%.  Today's rates are already at tax haven lows and can't really be cut any further without decimating important government programs.  Moreover, one of the key 1986 reforms was to eliminate the preferential rate for capital gains and tax the wealthy on their income the same way that the middle class is taxed--all at ordinary income rates.  Huntsman wants to couple rate reduction from all time lows with elimination of all taxes on capital gains!    He of course calls that 'eliminating the double taxation on investments" but as I've explained several times before, that use of "double taxation' is mostly false, especially in respect to investment in companies' stocks.  We already have a special tax code provision that provides for very low taxation on the capital gains an entreprenuer invests in a company directly.  But the preferential capital gains rate goes far beyond that and applies to secondary market capital gains.  That has nothing to do with direct investment.  Moreover, we have accelerated depreciation, bonus depreciation and expensing provisions that essentially make investment in business equipment very close to tax free--there's no 'double taxation' involved. 

 Huntsman repeats his proposed new rate schedule--8%, 14% and 23%--combined with "eliminating deductions and credits".  That means that the poor and middle class would bear an unconsciounable tax burden, while the wealthy would pay even less than most of them do today.  He says he'll "make business tax rates globally competitive"--that should mean RAISING rates, since the US business tax rates is already at tax haven status among the 40 OECD countries.  But of course, he actually intends to lower business taxes even further, for the benefit of wealthy managers and owners.

Huntsman's objections to regulations are equally misleading.  Regulations are the way that government acts to prevent business from passing along costs to taxpayers as 'externalities'--costs that they don't have to take into account to make a profit, but that create real harms for others, such as air pollution,  long term ecological destruction, ruination of mountains (strip mining), ruination of streams (sewage discharge), etc.  Huntsman has already reached judgement on the NLRB's consideration of Boeing's plant relocation to a right-to-work (union destroying) state.  He similarly has decided that the Dodd-Frank financial system overhaul represents "another regulatory sin" because it creates "massive compliance costs."  It appears he'd rather that the too big to fail banks continue to speculate freely in interconnected ways that end up creating a financial crisis like 2007-2008.  After all, the banksters will enjoy that, and the politicians will benefit from the big campaign contributions.  But the rest--ordinary Americans that make up the vast majority of living, breathing 'beneficiariies' of the kind of unsteady, speculative, volatile financial system created by deregulated banks--will suffer.  Huntsman understands taht the regulations that protect ordinary bank customers may face the big banks to "choose between downsizing or facing much higher capital ratios."  He casts this as a parade of horribles resulting from Dodd Frank.  Oddly, because that's actually a desirable result of banking legislation--if only that were a real possibility, it would help to end the 'too big to fail' problem!

Huntsman as president also would favor Reagan's mantra of privatization--he would 'privatize' Fannie and Freddie and "let the housing market clear".  In other words, he would let private companies now garner all the benefit of the federal taxpayer dollars in vested in Fannie and Freddie (he posed no conditions about returning all the benefits of the long-term federal guarantee) and he wouldn't give a damn about ordinary Americans who have underwater mortgages.  There's nothing in his proposal for clawbacks on mortgages in bankruptcy or otherwise.

Huntsman's warmed-over reaganomics proposals for favoring big business over ordinary Americans through a deregulatory regulatory policy, tax cut tax policy, and privatization don't address the right issues, don't promote entrepreneurialism, and are not fair. 

Friday Animation: Obama vs GOP on Debt Ceiling

So here's an animated cartoon that at least gets the gist of the story right--the GOP tea-partiers in Congress are trying to hold the US economy hostage with the debt ceiling decision.  The minority party says that if the country doesn't do what it wants, it will not support a debt ceiling increase.

http://www.nma.tv/obama-faces-gop-debt-ceiling/

 

What does the GOP want?  Let's consider the list.

1. No tax increases, even for the wealthiest Americans who are getting more than ever but paying less in taxes. 

This is a class warfare position.  The House GOP argues that increasing taxes on private equity and hedge fund managers, for example, would harm the economy because the tea partiers treat these elite classes as the only true entrepreneurs.  The people who are being protected are the carried interest elite who get their compensation as mostly capital gains and often deferred, through a gambit of treating a profits interest in a partnership as though it were an investment of their own money even though it is not after tax dollars;  the wealthy families who own most of the financial assets of the country; the wealthy families whose estate taxes have been reduced to a dribble by the Bush tax cuts and the new temporary estate tax 'compromise' enacted under the same type of economic terrorism; and the corporate managers who benefit from the many corporate loopholes so that most corporations pay almost no taxes and those that do pay taxes well below the statutory corporate rate.

This is class warfare because the US is a tax haven for the wealthy who can often 'monetize' their financial assets to provide money to live on without actually selling them, thus paying no taxes and passing the assets to their heirs with almost no taxes then either under the new estate tax.  Meanwhile the middle class pays substantial income and payroll taxes and sales taxes.

The wealthy can well afford to pay more in taxes.  The wealthy should pay more in taxes, because taxes represent one of the few ways that we can help reduce the huge inequality that has boomed under the four decades of reaganomics.  Vast inequality of income such as we have in this country today creates social strife and balkanizes the population because the 'haves and have-mores' don't give a damn about the have-lesses.

2. Substantial spending reductions--even in programs that actually bring money into the Treasury by holding tax cheats and securities cheats accountable.

   Consider, for example, the House-passed bill's REDUCTION of funding for SEC enforcement.  Note that the SEC enforcement office isn't paid for by tax dollars.  It is paid for out of penalties, fines, assessments, etc.  But the budget sets the limit on the amount of money that can be collected.  So the GOP House just voted a $135 million subsidy to the big banks that are guilty of getting us into this mess in the first place.  See the article today in the New York Times.

Enforcement at Treasury is a great investment for taxpayer dollars.  With adequate tax enforcement, we have a fairer system that is less able to be gamed by the wealthy and sophisticated, meaning that ordinary taxpayers are not as likely to bear the burden of their own taxes AND the tax cheats' unpaid tax burden.  But the GOP isn't interested in funding the IRS at all.  Remember that this House GOP is dominated by government haters who think private companies can do everything better than government.  That's absurd, of course.  It has never been the situation in our history, since we have always involved government in various ways in making the kinds of systemic infrastructure that supports business.  We have learned over time that private actors charged with self-regulation do not regulate--they rip off.  That is apparently the kind of universe that the House GOP tea partiers want.

3. Spending cuts that are set without regard to programming needs but in terms of an arbitrary figure as a percentage of GDP.

What's even worse than the fact that the Republicans are (i) playing economic terrorism with the debt ceiling, (ii) refusing to consider any revenue increases -- after themselves being responsible for the revenue shortfalls that began in 2001 with the passage of Bush's 2001 $1.3 trillion tax cut package and continued with each additional tax cut especially the 2003 package and the 2004 corporate wish-list package,  and (iii) insisting on ridiculous spending cuts that don't even save taxpayer money? 

How about the idea of deciding how much you are going to borrow and/or tax based on a phony notion of how well the economy is doing, and without thinking about what the essentials are that you need to cover?  That is what the tea partiers are up to when they say that spending or borrowing should be no more than some arbitrary percentage of GDP.

The right-wing as a group tends to like absolutes--they treat government as the problem, not the way that democracies give people a voice in the solution to problems that they cannot resolve by themselves; they want all wealthy people's income to be tax free--that is what zero capital gains taxation means, of course; they want all corporations to be able to shift resources wherever without any repercussions, speculate at will, and then be rescued by the federal government if they get into trouble (that is what the GOP really means by 'free market'--freedom of those that have to rape and exploit for profit, with the knowledge that ultimately there will be a soft landing provided by the very system that they have defiled); they want the entire nation to adhere to the set of moral rules that they have adopted for themselves, in their fundamentalist mixture of constitutional revisionism, seizing of the government for promulgation of their evangelical brand of christianity, and their dogmatic refusal to look at economic reality because of their clinging to a utopian, 'free market' notion that allowing brute capitalism to operate without protections for ordinary people enhances rather than destroys individual liberty.

So these absolute-thinking ostriches who disregard the failures of the Friedman 'free market' ideology want to impose an austerity program on the poor and the elderly and those in the middle class who dare to support unions and think that they are entitled to the pension benefits that they have already earned (especially those that they bargained for and took lesser wages in order to secure).

The austerity program they are interested in is one that will have short-term benefits for the elite class the GOP represents in this class warfare.  They want to cut Social Security, so that there will not be a demand to have the wealthy contribute more to the program .  They want to cut Medicare, so that they can push all Americans into privately run health insurance--the system that we already have and one that has failed utterly to provide decent health care to all or reasonably priced health care to anyone.  They want to cut Medicaid, so they can shove aside the poor and vulnerable and blame their inability to afford health care on their 'irresponsibility'.

4.  A continuation of the misinformation and propaganda campaign that has misled the American public about debt, deficits, monetary systems, spending and taxes. 

You'll note that the rhetoric advanced by the right often compares the US government to a family.  It suggests that borrowing to make ends meet is irresponsible, and therefore the only solution is to quit 'cold turkey'--to have the US cut spending drastically, no matter the consequences.

That is a false analogy and a false cure.

It is a false analogy because the US government is a sovereign that has its own monetary system.  Families and local governments and states cannot adjust the supply of money to suit the economic needs.  Families can only earn more to have more.  States, of course, can tax more, but the tea partiers--aided by the Koch Brothers and all of the well-funded propaganda tanks on the right like the Cato Institute, the Heritage Foundation, the American Enterprise institute, Grover Norquist's ill-named "americans for tax reform', etc.--have been able to mislead most Americans into thinking that taxes kill jobs or that Americans are terribly overtaxed and there are few politicians with the decency and courage to vote for the tax increases they know is necessary. 

Folks, the US is a tax haven.  We pay way too little in taxes.  That's why our bridges are falling, our highways are full of potholes, our health care is inferior to, yet more expensive than, most of the developed world's, and our infrastructure basically is stagnating like the middle class itself.  We should be building super-fast trains to connect the country and connect within cities.  We should be creating a stellar publicly provided, free, wireless communcation network.  We should be spending more money on schools, to ensure that our children enter their adulthood prepared for a better life.  Instead, we are letting roads crumble.  Instead, we are privatizing our schools in order to let profit-makers make profits off of teaching the best students while breaking unions and thus making even higher profits, and while leaving the poorest students in the public schools. Instead, we are continuing with a patchwork health care system that doesn't put the public in the center by recognizing that access to decent health care throughout life is an inalienable human right that government should foster.

It is a false cure, because the 'free market' ideology pushed by Hayek and Friedman and the rest of the Chicago (and Austrian) school is based on false assumptions about society.  The version of free market economics that the tea party GOPers are espousing is one that is so radically unrepresentative of the way real economies work that those tea party advocates like Michele Bachmann can actually say (apparently with a straight face) that they don't think it would matter much if the debt ceiling isn't raised and the US defaults on its debts.

That's Economic Terrorism, GOP style (meaning served with a large dose of corporatism and elitism). 

  

We're being bamboozled--debt ceiling, cuts to ordinary folks' programs, and the corporatist state continues apace

I almost can't stand watching or reading the news these days and have delayed posting on this blog because it seems there is a need to repeat the same suggestions over and over again.  Don't cave to the right.  Don't cut important social welfare programs that have enabled this country since the 1930s to treat its elderly and vulnerable populations with respect.  Quit trying to strip unions of power--they are one of the important ways that ordinary people can emplower themselves to demand a share of the prooductivity profits their labor has produced.  Quit repeating the garbage free market mantras suggesting that the wealthy investors and managers are entrepreneurs (they're not generally) and that allowing such gross accumulation of wealth as our current CEO pay of 3-400 times the salary of average workers (earning in a half day what a worker earns in a year) is somehow necessary to a good  economy in a democratic political system.  Allowing the owners and managers to continue to reward themselves with grossly oversized compensation and profits packages so that they can maintain their 20,000 square feet marble palaces with kitchens that only a caterer needs (and that the denizens of the house hardly ever use on their own) is just one of the excesses of the brute capitalism that the 'tea partiers' and other right-wing economic policy gurus are supporting.

This free market, brute capitalism where workers are expendable and the entire economy is forced to support the accumulation of wealth at the top is what we have in fact pushed on (and sometimes assisted in imposing on) developing nations in the past .  Think Argentina--where the Chicago Boys oversaw the decimation of the economy and the imposition of austere conditions on the majority so that the economy could be 'remade' to suit the owners of capital (including foreign investors and multinationals). Think Brazil, where in the 1960s we helped their military coup against a leftish president in order to support the ability of US multinationals to continue exploiting Brazilian resources. 

But now the right is so invigorated, through its ability to bamboozle the American people and elect a majority of economic extremists in the House who either don't understand history well enough to know that they are speaking gibberish, or don't care.  They are determined to undermine the meagre social welfare system of Social Security, Medicare and Medicaid, with constant untruths about 'bankruptcy' and similarly misleading statement on almost every issue.  Presidential candidates who make up facts are toasted by the purportedly 'leftleaning' mainstream media (this assertion itself a made-up fact used to continue to bamboozle the people).

The most outrageous spectacle of all is the pontificating dogmatic right in the House and Senate, threatening to cause a U.S. default on the debt ceiling issue in order to pursue their ideological dream of a 'pure' economy.  Their economic model is a disgraced one --the free market, corporatist model that ensures that the small, wealthy investor class is doing well and that Big Business gets what it wants but doesn't give a damn for ordinary folks, whatever verbiage about caring for workers, and ordinary people with mortgage difficulty, etc. they spout.

Truth is, folks, you don't get an economy working well for ordinary people when you (i) make pledges NEVER to increase taxes, (ii) reject cuts in the grossly overlarge military expenditures this country makes in order to secure the world's resources for its multinational enterprises (that then lobby for close to zero taxation on their obscene profits from that secured wealth), or (iii) try to solve all perceived fiscal problems by taking it out of the hide of ordinary folk, thus  stifling the real economy (the one where workers work in businesses that serve local people and that work generates profits that are shared with workers and owners in a way that leads to expansion of the local economy based on the broad-based workers' participation in it) and at the same time bringing the kind of class warfare that the Friedman school has long waged on Latin America and other Third World countries right here to America.  The result of those kinds of policies is concentration of income, wealth, and influence at the top, with ordinary folks in the middle class struggling just to stay even.

The idea that you cannot tax natural resource extractive industries more (by taking away the tax expenditures subsidies that literally hand them outsize profits on a silver platter) when they are making windfall profits is absurd.  The idea that you cannot reimpose a decent estate tax on the estates of the wealthiest 2% in the country, to assist with meeting the heartfelt needs of the struggling middle and lower classes, is pathetic.  The suggestion that you cannot increase taxes on financial transactions and increase capital requirements in banks to stifle the too-rapid innovation and liquidity within the financial institutions that underlies the crisis we just went through (and the worse one we will suffer within the decade if we don't enact even stronger reforms than already in Dodd-Frank) reflects the dogmatic fixation on service to the wealthy investors and financiers that permeates the right-wing in Congress.

Folks. we can't let them do this.  Congress is supposed to serve the people, and this 'tea party'/right-wing extremism that was reflected in Newt Gingrich's 'contract on America' and John Boehner's contract with the investor class is the worst of class warfare.

There was a time when the neo-imperialists and corporatists didn't dare do the same thing in America that they were  pushing for, and secreting doing in Third world countries.  Exploiting the environment without a care for the pollution that ordinary people suffer in their daily lives.  (Think of the Banana Republic attitudes of United Fruit  and  the Latin American oil enterprises conducted by US multinationals.)  Supporting militaristic regimes with a right wing flavor and a taste for torture and imprisonment of radical left thinkers. (Think Chile, Argentina, Nicaragua, Guatemala, etc.)  Labeling governing concepts that pay a lot of attention to the needs of ordinary people as 'subversive' and 'socialist' in order to bring up myths of communistic monsters that hide under the bed and eat the economy.  (Think Cuba and Brazil, especially, and Chile, and now Venezuela.)  All these tactics exist to keep ordinary people in their place as workers who get a pittance of their productivity profits and are "flexible" (meaning can be fired upon short notice by private equity firms flipping companies for their own (preferentially taxed) profits) while the military can control the resources and make good deals (for US multinationals and the military leaders, not for the people of the exploited country).  Read Chomsky's "Year 501" for a (somewhat rambling) account of the neo-liberal corporatist agenda in Latin America.

But now those same ultra corporatist, class-warfare policies are being implemented right here, in the open, with brazen disregard for our historical social contract, for the plight of the poorest and most vulnerable amonst us, all in the name of keeping the 'investor class" and Big Business (generally one and the same, since the investor class is mostly the owners and managers of Big Business) happy.

They paper it over with talk, as Joe Lieberman does in calling for cuts to Medicare, for 'bipartisanship"  or they claim the US is living beyond its budget because it doesn't pay its bills.  But of course they don't really care about that, since the budget put forward by the Republican House majority carved a multi-trillion dollar hole.  IN other words, they don't pay attention to their own rhetoric.  They just want to use the (absurd in itself) requirement in the US that we have a debt ceiling extension vote as an opportunity to blackmail the American people to get concessions on their favored targets--the programs that ameliorate, somewhat, the brute capitalism of the American economic system after forty years of reaganism, friedmania, and the rest of the Chicago School garbage that has been treated as "God's truth" so long by politicians that they don't even realize, perhaps, that they are letting a bunch of mathematicians who like to escape the real world into made-up formulas decide the policies for the nation.

Big Business has had its enablers in place for four decades--Grover Norquist, the Koch brothers and their 'tea party' followers, the various propaganda tanks like the American Enterprise Institute, the Cato Institute, the Heritage Foundation, and the rest  that have spent millions to brainwash Americans into thinking that the failed 'free market' ideas of Milt Friedman and Alan Greenspan and Wall Street are the only way to go.  It has a majority on the Supreme Court willing to be extraordinarily activist in overturning precedents on class action lawsuits (a way for ordinary people to empower themselves against Big Business) and free speech (a way for corporations and their owners/managers to control the political debate through the use of their overwhelming dollar power).  And that right-wing majority is serving its masters well, while Big Business's minions in Congress continue to roll over to make sure that the right-wing panacea of deregulation, militarization, tax cuts, and privatization contines apace. 

The US debt burden is high, but we are not Greece or Ireland or even Portugal.  We have a strong economy.  We have our own monetary system, unlike the Euro nations that are facing much higher debt burdens and can't individually control their monetary flows.  Austerity measures like the IMF has imposed on Latin America to satisfy foreign investors (not the natives of those countries) and like the Euro world is now imposing on its own members are not needed here (and probably are the wrong answer there as well).  Those measures are driven again by the failed corporatist economic model that assumes that the entire world should be run to satisfy the wishes of financial institutions, big money investors and the big multinational corporations that they own and manage. 

The world should be run to satisfy the needs of ordinary people.  Banks should be stripped of the power to create a world-wide crisis with their haystacks of derivatives that catch flame much too easily.  Big Business should make do with lower profits, paying their workers more and their managers (and owners) less and paying their fair share of taxes.  Hedge fund managers should pay tax on their "carried interest" compensation like ordinary people, and private equity firms should be subject to much more red tape that makes it much harder to buy companies and take them private in order to fire their workers.   In fact, consolidation and mergers among big businesses should be made much more difficult through new limitations on the tax-free restructuring provisions. Unionization should be strengthened, in order to give ordinary Americans something with which to have leverage over the hierarchical authorities that undermine economic growth by concentrating everything on the investor class.

Let's start a letter and call-in campaign to every Republican legislator in the coutnry, telling them that we are sick and tired of being treated as lambs led to the slaughter in order to place endless platters on the tables of the rich.  Tax policy should be based on what works, not on ideological dogma that has been the underlying cause of catastrophes and crises worldwide. 

 

Most Americans--even Republicans--support tax Increases to address deficits

The National Women's Law Center reports on the recent PEW survey that found that  "Beyond the Beltway, a Majority of Republicans Support Tax Increases for Deficit Reduction", NWLC.org, June 10, 2011.

[A] new poll from the Pew Research Center shows (once again) that beyond the Beltway, a majority of Americans, including Republicans, support tax increases for deficit reduction. In fact, this latest poll shows that a larger majority of Republicans (62%) and Independents (71%) than Democrats (58%) support a limit on tax deductions for large corporations. A majority of Republicans (54%), Independents (71%), and Democrats (73%) support raising the Social Security contribution cap.

It really should come as no surprise.  Most Americans that have at least some comprehension of the facts understand that we are generally a low-taxed nation, that the wealthy made out like bandits under the tax changes enacted under Bush, and that the large multinationals get off almost scott-free under the corporatist giveaways in the Bush tax cuts and the ones they are now lobbying for.  And back when those Bush tax cuts were first proposed and discussed and enacted, a majority nationwide didn't think we needed new tax cuts.

Tax cuts are a major tool of the corporatist agenda that favors increasing inequality and decreasing public goods like public transportation, public health care, public parks and other amenities that make life better for ordinary Americans.  What should be surprising is that the number that favors the right's tax-cutting regimen is ever larger than the tiny minority in the elite that primarily benefit from it.

PEW report on "The Great Debt Shift"

The PEW Foundation's report on the reasons the U.S. debt is at its current level is now available:  The Great Debt Shift.  This report lies behind Montgomery's Washington Post article reviewed in the prior post.

This discussion of deficits and debts appears to be backwards.  If our congressional representatives truly had the well-being of Americans and the long-term status of the country in mind, I suspect we would have a very different national conversation.

First, we would have a real dialogue--hopefully with minimal misleading and false talking points based on distortions of facts --centered first around what it makes sense for governments, and the federal government in particular, to be spending money on.  I have in mind the development of a consensus about expenditures essential to the well-being of the citizenry. 

 I'd include at the least items such as:

• a  national defense network (thinner than the current Homeland Security/Military apparatus, so that it does not become too powerful);
• an open, transparent and fundamentally conservative financial system that provides credibility to the US so that it can conduct its affairs and that provides a sound system of credit for commerce and individual interests;
• basic and decent health care for everyone;
• public infrastructure such as transportation, communication and energy networks;
• decent public education from child care/pre-kindergarten through college;
• seed money to support innovation (such as direct funding for basic research and short-lived tax incentives to innovative technologies that have some track record of improvement over current technologies);
• appropriate regulation of markets to avoid  (i) externalities like pollution, fishing stock depletion, endangered species extinction and (ii) generally problematic dominance of markets by a few large players;
• legal regimes that provide means of holding corporate entities and individual actors responsible in both civil and criminal actions as appropriate; and
• appropriate safety nets to ensure that vulnerable citizens are cared for in difficult times. 

After having developed some consensus around the kinds of expenditures that promote personal freedom and the general welfare of our citizenry and our society,  I'd want us to have a conversation about  the means of achieving those important expenditures.  There is no need (or justification) for arbitrary caps, such as "government expenditure should not exceed 19% of GDP" or a priori conclusions about whether or not we can "afford" such things as decent universal health care or decent old age insurance.  We should, of course, consider whether current taxation, fees, and other revenues can provide sufficient funding for the items that we have prioritized.  If not, we should consider what additional revenues might be reasonably generated to fund those priorities.  Only if the result of funding those priorities through the best means we can determine is more damage to the citizenry and societal structure than not making those expenditures at all should we consider pulling back from our determined agenda.

As I said, the US is currently doing this backwards.  We are operating with an intentionally defective tax revenue system ginned up by the "starve the beast" crowd to protect its own interests.  We had a reasonable tax system in place in 2001, a system that a majority of people considered satisfactory, even at the time that the Bush Administration was amping up the PR to push through its huge 1.35 trillion tax cut predominantly of benefit to the wealthy.  (That is not to say, of course, that there was no room for improvements, such as by removing ambiguities, deleting the chaff hanging on from decades or more that no longer had a good rationale, such as the huge agribusiness subsidies, and others.)  An ideological whirlwind, based on neoliberal views that support the primacy of property rights and hence the primacy of the propertied classes, swept that away and substituted growing deficits, growing debts and expanding military commitments.  Remember that Bush II actually increased spending while pushing through and supporting what amounts to one of the biggest tax cut packages in our history, when you take all of the various cuts from 2001-2008 into account.  And, of course, it was the GOP that pushed for using more tax cuts (particularly for Big Business) rather than direct public infrastructure investment as a huge part of the economic stimulus package that was finally passed.  Now, those resulting deficits and debts are being combined with a priori arbitrary numerical targets to purport to justify the "necessity" of eliminating important safety net programs that enhanced personal freedoms by freeing the unemployed, the poor and the elderly from some of the worst ravages of economic insecurity. 

Americans may be beginning to wake up.  Witness the fury at some of the Town Hall meetings of the House members who supported Ryan's budget proposal that combined new tax cuts for the wealthy with more reductions of aid for the poor.  But the Paul Ryans, Donald Trumps, Sarah Palins, Michele Bachmanns, Grover Norquists, Glenn Becks and all the others participating in false facts echo chambers are trying hard to prevent that from happening.  Hopefully, more and more members of both the Democratic and Republican parties will step forward to pull us back from the brink of ridiculous gamesmanship over birth certificates, college transcripts, Harvard Law Review articles, the debt ceiling (get rid of it altogether) and ideologically driven spending targets so that we can have the national discussion we need to have.

The Washington Post's Lori Montgomery on the U.S. Debt

Lori Montgomery, Running in the Red: How the U.S., on the road to surplus, detoured to massive debt, Washington Post, April 30, 2011, notes that the run-up of the U.S. debt was a choice, made in the first year of the Bush Administration when Bush pushed through a huge tax cut.

Rubin wanted to use the surplus to start repaying the debt, which was then just more than $3 trillion. The White House billed it as “saving Social Security first,” viewing the surplus as an opportunity to shore up the nation’s finances before huge numbers of the baby boom generation began claiming federal retirement benefits. “The problem was a whole other part of the political spectrum wanted to use the surplus for tax cuts,” Rubin said in an interview. “They said they wanted to give the people back their money. Of course, it was also the people’s debt.”

The Bush tax cut bills passed almost every year he was in office (and the additional losses in tax revenues triggered by recession) are "the biggest culprit, by far" behind the huge increase in the debt that the right is trying to use to convince Americans that we have no choice but to settle for decimating almost all of the New Deal programs.  The 2001 and 2003 Bush tax cuts amounted to about $1.8 trillion (based on the sunsetting gimmick that had various provisions ending after 8 or 10 years to make the cost look lower than it was expected to be).

Many Americans seem to think that Obama is the source of the high deficit/high debt problem.  But Montgomery shows that most of the big ticket spending increases go back to the Bush administration. 

Big-ticket spending initiated by the Bush administration accounts for 12 percent of the shift. The Iraq and Afghanistan wars have added $1.3 trillion in new borrowing. A new prescription drug benefit for Medicare recipients contributed another $272 billion. The Troubled Assets Relief Program bank bailout, which infuriated voters and led to the defeat of several legislators in 2010, added just $16 billion — and TARP may eventually cost nothing as financial institutions repay the Treasury.

Obama’s 2009 economic stimulus, a favorite target of Republicans who blame Democrats for the mounting debt, has added $719 billion — 6 percent of the total shift, according to the new analysis of CBO data by the nonprofit Pew Fiscal Analysis Initiative. All told, Obama-era choices account for about $1.7 trillion in new debt, according to a separate Washington Post analysis of CBO data over the past decade. Bush-era policies, meanwhile, account for more than $7 trillion and are a major contributor to the trillion-dollar annual budget deficits that are dominating the political debate.

Montgomery reports that Republicans (who were the drivers of the huge Bush-era series of tax cuts) "reject raising taxes as part of the solution."  

 But Montgomery's story is, like most reporting these days, too shallow.  She notes that Bush's campaign talk about "giving the tax money back to the people, because 'It's your money'" took place in the context of the surplus generated during the Clinton years. But now they plan to use the need to raise the debt ceiing as leverage to force the Democrats to accept cuts to entitlements while still giving major new tax cuts to the wealthy and big business.

The article suggests that, if only Bush and Congress had known about the two wars and the heightened security costs after 9/11 and the financial crisis, they would not have passed the gigantic tax cuts.  Pete Domenici, for example, says "Nobody would have thought that all these things would have happend after you cut taxes.  That you'd have two wars and not pay for them.  That you'd have another recession.  A huge extravaganza of expenditures."

Yet it was the same president Bush who pushed through the huge tax cuts year after year who chose to start two wars that had little to do with U.S. security and lots to do with the military industrial complex and Republican war-mongering ideology.  And then chose to pay for those wars with borrowing rather than by rolling back the bills that had starved the government of tax revenues at just the wrong time.  And Congress went along.

But even that distorts the perspective on the Bush tax cuts and the surplus.  By the time the 2002, 2003, and 2004 tax cuts were passed, we already knew that there wasn't a surplus.  Bush was running significant deficits, and the wars in Iraq and Afghanistan were mushrooming well beyong the rosy low-cost estimates that the Bush war machine had first projected.  The war funding was being handled by supplemental bills to disguise its huge cost.  So those tax cuts were passed in spite of the deficits and hugely increased borrowing to pay for the Bush-Cheney permanent ramp-up of the military complex, including the expensive hired mercenaries and hired Halliburton services that proved that privatization of the military resulted in increased costs.  The way the tax cuts were handled, and the way the right-wing rhetoric disguised the reality of the need to borrow to pay for tax cuts while conducting a war of choice, demonstrates that the GOP is not the party of fiscal responsibility that it tries to claim it is. 

The Budget Crisis: OMB Watch's Analysis of Ryan's path to mediocrity proposal

OMB Watch provides another progressive perspective on the ideology driving the Ryan budget proposal.

Like all congressional budget resolutions, House Budget Committee Chair Paul Ryan's (R-WI) fiscal year (FY) 2012 Budget Resolution is not simply a chart of preferred spending and revenue levels, it's also a political statement guided by ideology. And Ryan's ideology demands that the federal government divert ever increasing sums from middle- and low-income families to big business and high-income families.

Importantly, they note that the call for cuts to programs that serve the more vulnerable amongst us is justified by an arbitrary decision to cap federal revenues at a level guaranteed to create deficits unless there are significant spending cuts.  This is the "starve the beast" idea at its culmination.

On the revenue side, Ryan's budget revolves around locking down federal revenues to below 19 percent of gross domestic product (GDP). While this number is the average for the past 30 years, it has consistently lagged federal spending, resulting in the steep deficits we see today. In order to maintain this deficit-inducing level, Ryan's plan calls for cutting income taxes for high-income earners from today's top marginal rate of 35 percent to 25 percent. (Interestingly, the last time we saw federal budget surpluses, between 1998 and 2001, the top marginal rate was 39.6 percent.) Ryan plans a similar giveaway to corporations, slashing the corporate tax rate from 35 percent to 25 percent.

Pay-fors for the big tax cuts to Big Business and the wealthy?  Well, those should come partly from those pesky large subsidies in the Code, right?  But Ryan avoids naming any of those.   My guess is that he knows the GOP isn't serious about eliminating large tax expenditures that primarily benefit the wealthy and Big Business, such as (i) active financing exception for overseas finance subs, (ii) deferral for multinational corporations' active business income, (iii) mortgage interest deduction that primarily gives huge tax cuts to elites with million-dollar homes, (iv) charitable contribution deduction that lets the wealthy donate stock and take a deduction for its value rather than for what they actually paid for it and have invested in it, etc..  And besides, even if he thought that the GOP might have to eliminate a very few of those nice juicy wealthy-friendly provisions, he isn't about to name them and then get a well-funded lobbying group working against him on this.  The GOP has benefitted much too much from having those well-heeled lobbying groups for Big Business and wealthy families (like the Walton heirs) on their side, along with the right-wing purported "think" tanks like Cato, American Enterprise, Tax Foundation, etc.....

The proposal also indicates that "large" tax expenditures should be eliminated to pay for tax cuts for the rich. It states that "deductions, credits and special carve-outs" in the corporate tax code should be modified to pay for tax cuts for businesses. Notably left out from the discussion of removing these tax code "distortions" is any identification of which tax expenditures Congress should nix. Far from being bold, Ryan's proposal ducks these critical questions, shifting the heavy lifting and political daring to the tax writing committees, staving off attacks from powerful special interests that will no doubt flex their campaign contribution muscles to retain their federal largesse.

Not really cutting the rich doesn't mean that the GOP won't carry through with cutting the vulnerable.  Ryan is quite willing to list specifics here--after all, the poor and the young and the unemployed and the underemployed don't have much way to work together to have their voices heard (especially in those states where the GOP's anti-union drive is squelching unions).

In exchange for these tax cuts, spending for the old, the young, the poor, and the sick would be lopped off by two-thirds. Ryan laments the notion that the current social safety net is a "hammock, lulling able-bodied citizens into lives of complacency and dependency," while worrying about Medicaid health care providers "fleeing the system to escape endless red tape and underpayments." His solution is to apply the same failed "get-back-to-work-you-lazy-bum" policy that ended the old income assistance program and created Temporary Assistance for Needy Families (TANF).

In fact, the welfare reform of the 1990s that is approvingly cited in the budget plan did nothing to curtail poverty, and it only managed to reduce welfare rolls by forcing low-income parents to take low-wage jobs A similar approach to health care, nutrition, and housing assistance will likely result in only cutting families off from these vital programs when they need it the most.

Headlining the section of Ryan's proposals to "strengthen the social safety" are $771 billion in Medicaid cuts. Ryan's plan would convert this low-income health care program from a system in which states and the federal government share costs into a block grant program that would allow states to abandon the eligibility and benefit guidelines currently in place. Ryan argues that relieving states of this "one-size-fits-all" approach would result in significant cost savings, allowing states to pay for higher-quality care. But this is just window dressing beautifying almost $800 billion in health care cuts to low-income families that will ultimately result in poorer health outcomes for millions of people.

Nutrition and housing programs are also prominently featured on Ryan's chopping block. Ryan is clear that far too many people have access to the Supplemental Nutrition Assistance Program (SNAP, formerly "Food Stamps") and housing assistance. Applying a circular logic, Ryan insists that without kicking people out of these programs, the expenditures will be so great that people will have to be kicked out of these programs. Thus, he is just doing what will have to be done eventually. Yet cuts to health care, nutrition, and housing for low-income families is the bedrock on which Ryan builds his tax-cutting and corporate support programs.

OMB Watch points out that Ryan's plan is really a "two-fer"--it manages to take away from the vulnerable (the young, the poor, the elderly) even while giving to Big Business by letting corporations skim off the cream from the federal funding formerly dedicated to the vulnerable.  Here's where the Reagonomics mantra of privatization comes in--tax cuts with privatization is just another way of saying let's convert this funding for the poor into a subsidy for Big Business.

Ryan's plan was formulated with the goal of allowing private corporations greater access to federal funds. At the front of this effort is a form of privatizating Medicare. He calls for use of “premium supports,” which means Medicare would be changed from an entitlement with defined benefits to an insurance system in which the government provides a fixed sum of money to individuals to buy coverage. The phrase “premium supports” is used because “vouchers” doesn’t poll very well today. But a rose by any other name is still a rose. By giving vouchers to seniors to pay for their own health care, Ryan's plan would insert a middleman between patients and health care providers, giving health insurance companies the ability to skim untold billions in federal health care spending.

Ryan's plan would also voucherize federal jobs programs by doing away with them and creating a "career scholarship" program that would have the effect of giving for-profit colleges a bigger bite of the national education and training budget. And although having little, if any, impact on the budget, Ryan's proposal calls for gutting the recently passed Wall Street reform – a boon to big banks who loathe the legislation – and removing sensible oil drilling regulations despite last year's BP disaster in the Gulf of Mexico.

But if you think that this means an open look at the way we waste billions annually on militarization (one of the other four cornerstones of  privatization, deregulation, militarization and tax cuts  that make up the GOP's radical reagonomic agenda for continuing the devastation of the American economy that began when Reagan took office), think again.  Eisenhower's view that we had to maintain a military-industrial complex but should be very wary of its power has been translated with reaganomics into the view that we should constantly feed the military-industrial complex because it is the friend of the rich and Big Business, and we need never hold it accountable for anything. 

Security spending, however, would go untouched compared to President Obama's budget request, increasing compared to the Congressional Budget Office (CBO) baseline. This aspect of the budget proposal makes it a rarity among the many floating around Washington – the president's deficit commission plan is clear in its call for "equal percentage cuts from both [defense and non-defense]". The Pentagon awards hundreds of billions of contracts to private corporations every year. Cuts to the Pentagon's budget as deep as those to non-security programs would have significant impacts on the bottom lines of the nation's biggest businesses. The Ryan budget keeps the taps wide open and continues to pump billions of dollars of federal funds to these contractors.

So the Ryan budget is a disaster.

Despite claims to the contrary, Ryan's proposal would increase the debt in its first ten years. According to the CBO's analysis of Ryan's plan, in the first ten years after the enactment of his proposal, debt held by the public would actually increase compared to doing nothing. Under the hood of this clunker of a plan are draconian cuts to non-security spending that are less than the tax cuts that would be handed out to the rich and big businesses. The real cost savings in Ryan's plan come after the ten-year budget window that budget resolutions typically address. In 2022, the Medicare voucher system comes into effect, which essentially shifts health care costs from the government to senior citizens. In short, even with drastic spending reductions, the first ten years of Ryan's budget have no positive fiscal impact, while the out-years look improved because of radical Medicare cuts.

This is the budget of Big Business and the anti-government crowd. Ryan's budget doesn't dial back the laundry list of national priorities so much as it simply hacks away at the amount of resources devoted to accomplishing them. And in areas where he can, he opens them up to private corporations to skim funds as they flow from the Treasury to the provisioning of services. For what's left of programs operated by the federal government, Ryan's budget leaves a fraction of the funds necessary to implement an effective social safety net, protect the public, and invest in the economy as businesses and the wealthy contribute less.

The GOP Agenda in Michigan: corporate taxes down, individual taxes up, unions down, bureaucratic meddling up

Michigan fared like much of the rest of the country in the 2010 elections--moving to a GOP-controlled state house and legsilature.  It lost a Democratic governor and put in a pro-business GOPer, Rick Snyder (former CEO of the Gateway computer company), with majority votes in almost every county except Detroit's Wayne County.  Similar lopsided votes put the GOP in many of the Michigan seats in the House of Representatives, including re-election of rightwinger and pro-business conservative Dave Camp, who now holds an influential tax writing chairmanship, and new Tea Party favorite Dan Benichek in the Upper Peninsula, who took the seat held by Democratic representative Bart Stupack for 18 years.  Returning Democrats in the House included veteran reps like Sander Levin, John Conyers, and John Dingell, along with freshman rep. Hansen Clarke and returning freshman Gary Peters.  For 2011-12, the GOP has a firm grip on the Michigan legislature, with 26 of the 38 State Senate seats and a clear majority (61 out of 110) of the State House seats.

What can we expect on taxes from this GOP-dominated state?  Bad news, I fear.  Gov. Snyder has already shown his support for expanding the GOP control of governmental functions through support of the recently passed financial manager legislation, allowing him to replace elected local officials with his appointees who will have enormous power, including the ability to break union contracts.  This legislation is of a piece with the union-busting, anti-public employee movements in Wisconsin, Florida and Ohio,and augers ill for sustainable democracy.  As already noted in the context of the Wisconsin debacle, the aim here is to weaken state government by targeting public employees to create divisive jealousies from workers who haven't fared well under the anti-union sentiment now dominanting the private marketplace.  Instead, we should be celebrating the willingness of public servants to accept do sometimes thankless government work, often for less than they could make in the private sector.  One likely result, as public employees lose job security and the benefits that partly compensated for the higher workloads and graver responsibilities of their jobs, is that state governments will suffer and state agencies will be "captured" by the businesses they regulate.  That will be detrimental to the economies and political communities of the states.

Snyder's tax proposals--set forth in the Feb. 17, 2011 document Reforming Michigan's Tax Structure--are in line with the general trend in the GOP to reduce the tax burden on businesses and allocate it towards individuals, especially vulnerable groups such as seniors and retirees, with the (unsupported) claim that business tax "simplification" and cuts will lead to economic growth and job creation. 

• Snyder proposes significant tax cuts for businesses through the elimination of the Michigan Single Business Tax and replacement with a flat 6% tax that would only be paid by businesses that operate in corporate form.  Partnerships and other types of business would be exempt, with the only Michigan tax collected that which is paid by the individuals who own the business equity.  The net cost is expected to be about $1.8 billion.  This is huge in a state that already plans drastic cuts to higher education based on revenue shortfalls, another case where self-created deficits are being used to lay a foundation rationale for ideological spending reductions that devalue public institutions and overvalue so-called "free market" alternatives. 
• Snyder would also ultimately eliminate the film incentives that have helped develop a burgeoning southeastern Michigan film industry: critics charge that this is foolhardy, since independent studies demonstrate the effectiveness of the film incentives in bringing new industry and jobs into the state, resulting in six dollars of new expenditures in the state for every one dollar of tax incentives.  See, e.g., Dave Krieger, How we all benefit from film incentives: an industry insider weighs in, Model D Media, Mar. 1, 2011.  Krieger notes that the expanding film industry in Michigan has been particularly successful because of the generosity of the credit and the variety of locales that Michigan offers for the film industry, from gritty city to idyllic countryside.  The new business brought in by the credit has had an impact, he claims, in many ancillary areas. Drivers, electricians, caterers, hotels, sign companies, antique stores, and many other industries and professions benefit, and much of the hiring has provided new jobs for laid off auto workers and others hit hard by the recession.   Community colleges even developed training programs for movie production and opened new opportunities for unemployed workers to retrain in a new industry.
• Snyder's proposal makes up for the $1.8 billion annual loss in income from lower business taxation by increasing the tax burden on individuals--especially the middle and lower income classes because of pension taation and elimination of the Michigan earned income tax credit.  The proposal moves towards the ideologically motivated flat tax being pushed by ultra-right wing groups that want to eliminate progressive taxation.  Snyder would lower the rate to a flat 4.25%  and "broaden the base"--eliminating most of the credits and deductions that currently apply.  Public and private pensions would become taxable, reducing the income of vulnerable retirees who live on fixed incomes and cannot easily bear the increased tax burden, while simultaneously reducing the value of the benefits that have been bargained for as a substitute, in many cases, for the higher wages that would be merited for public employees.  Snyder also proposes eliminating the Michigan earned income tax credit, ostensibly saving the state about $331 million, but ultimately costing it more in services and assistance needed for the vulnerable working families that currently receive the credit.  Changes listed in the proposal include the following:
  • Earned income tax credit
  • Energy efficient home improvement credit
  • Historic preservation credit
  • Film production wage withholding credit
  • City income tax[] credit
  • Gifts: public art, radio, colleges, universities, archives, museums, libraries credit
  • Community foundations, food banks and homeless shelters credit
  • College tuition and fees credit
  • Automobile donation credit
  • Family/Individual development accounts credit R
  • enewable energy surcharge credit
  • Medical care savings accounts credit

While elimination of some of the credits may make sense, many of these are of substantial importance to middle class Michiganers--especially the credit for college tuition and fees in an era when state support for public universities is trending ever downward, or the credit for city income taxes in places like Detroit with a substantial city tax burden.  Overall, the substitution of individual taxes for the $1.8 billion in business taxes lost in the pro-business tax proposals will shift the tax burden to people much less able to bear it compared to the elite who tend to own business equity.  These changes can be expected to have a deleterious effect on Michigan's economy. 

What should be done instead?  Michigan should retain a substantial tax on businesses operating in Michigan, so that profitable businesses (including sole proprietorships and partnerships) pay their fair share to support the state benefits that they receive (roads, court systems, communications and other utilities, police and fire protection, etc.).  Instead of a reduced-rate flat income tax without reasonable deductions and credits for the kinds of major expenses that can break a family, Michiganders should push for a constitutional amendment permitting a progressive income tax and should then enact such a tax with a maximum rate around 7 or 8% applicable to those with $1 million or more of annual income.  Although eliminating some of the incentive credits for businesses and individuals may make sense, the decisions should be made after independent study of the success or failure of the incentives in achieving their objectives.  It appears that the film incentives, for example, have been extraordinarily efficient in bringing a new industry into the state to take advantage of particular assets that Michigan offers.  While retaining those incentives long-term is likely not a wise approach, it may well be reasonable to retain the credit system for a sufficient start-up period for the industry, perhaps 10 or 15 years to ensure that workers, facilities and procedures can be established strongly in the state.  Credits like the earned income tax credit are vitally important to lower-income Michigan workers:  a still recessionary economy is not the time to remove this lifeline for them.  Removing it will just cost the state more in the long run, as health care and other services must be provided to these vulnerable groups even when they cannot afford to pay.  Michigan should use the resources from the reinvigorated business tax and progressive income tax to substantially increase its funding for higher education and for special programs for disadvantaged schools, such as the schools in Detroit's inner city neighborhoods, and to continue building ways for vulnerable Michiganders to retrain for new employment opportunities.

Snyder and the Michigan GOP are proposing short-sighted tax policies that will do actual harm to Michigan.  They are relying on the same old ideologies of the GOP that protect business owners and the wealthy while pushing the tax burden (and the absence of needed services because of insufficient funding) onto the middle class and poor.  This classical "free market" ideology has a record of consistent failures.  Broad based economic growth that builds a strong middle class is best supported by progressive tax policies that provide sufficient funding for physical infrastructure and human capital development.  It looks like Michigan is going to be yet another testing ground for these failed Chicago School "free marketarian" policies.  So perhaps the best news is that the people of the state may be waking up.  See Andrew Leonard, Red vs. Blue: The Great Midwestern Backlash, Salon.com, Mar. 18, 2011 (noting that support for the newly elected GOP governors in Wisconsin, Michigan and Ohio appears to be plummeting, in part because of their harsh budget cut policies coupled with corporate-friendly tax policies). 

The House GOP Budget

I have still not gotten over my snarky response to what the GOP tea partiers call sound fiscal policy.  So instead of my writing a long piece, I'll refer you to another one that makes the key points--Jim Maule's "Spending Cuts, Full Disclosures, Hearts, and Voices (Feb. 23, 2011).  You can skip most of his links to his earlier posts and go down to the bottom, where he bullet points key cuts passed by the GOP House (based on the Center on Budget and POlicy Priorities report on same).   These include reductions to primary and secondary education, Pell Grants to help lower-income students attend college, community mental health and substance abu8se programs, nutritional programs, low-income and public housing support, Native American programs, programs dealing with infectious diseases, programs dealing with food safety, programs dealing with health, programs dealing with clean water (including drinking water), removing pollutants from Florida's streams and the Chesapeake Bay and getting rid of detrimental dams on Oregon's beautiful Klamath River.  But the House took specific action to be sure that mining companies can continue to dump mountains into streams even when it results in water pollution.

This budget has nothing to do with fiscal soundness.  The deficit created by the tax cuts to the rich that the GOPers insisted was for a lot more money than the few dollars we currently devote to these critical activities, and they didn't blink.  They are just using the public's lack of understanding about the country's fiscal situation as an excuse to mount an assault on every program that the oligarchy doesn't like.

The country this budget (if it were passed) would create is a horror story--one world for the privileged and quite another for those who do not have enough, a return to the quasi-serfdom that existed in the Triangle Shirt Factory days, with sewage in streams and the air colored black with pollutants.  These GOPers want to return us to the "happy days" of pre-New Deal, pre-Teddy Roosevelt, pre-unions.  Back when robber barons did whatever they wanted, and everybody else had to be grateful if they got thrown a scrap along the way or paid, in fact, for the work they were hired to do.