Nel's New Day

March 16, 2017

DDT’s ‘Skinny’ Budget: America Last

Filed under: Budget — trp2011 @ 9:18 PM
Tags: , ,

The top-line draft of fiscal proposals for 2018 from Dictator Donald Trump (DDT) has been released with deep cleaver cuts (except for the military), most of them general items, letting Cabinet members decide specifics. The ones that were specific in the $1.1 trillion budget were mostly small, typically under $500 million. For example, he eliminates the National Endowment of the Arts to save $148 million (29 DDT trips to Mar-a-Lago), the National Endowment for the Humanities, the Corporation for Public Broadcasting ($445 million), and the Institute of Museum and Library Services. “About 25 percent of NEA block-grant funds go to rural communities and 54 percent to low-income areas,” according to The Washington Post. Devastated local TV and radio stations could no longer show the reality DDT show. These are some of the 19 eliminated independent agencies, those outside federal departments controlled by Cabinet members, to be defunded—including the Appalachian Regional Commission which covers a region of Trumpers that he promised to economically revive.

Congressional members have said that the budget is “dead on arrival,” setting up the scene for an internecine fight.

The general cuts, including many that hurt DDT supporters who believed that he would make their lives better:

Environmental Protection Agency: $300 million under earlier estimates which was 31 percent less than 2016 and which fires 3,200 employees. With over 50 EPA programs would be completely eradicated, DDT “discontinues funding for the Clean Power Plan, international climate change programs, climate change research and partnership programs, and related efforts.” Secretary of EPA, Scott Pruitt, removed a request to determine the extent to which methane oil and gas producers are leaking because he doesn’t believe that CO2 causes climate change. Industry requests caused him to consider the removal of a rule to prevent explosions and accidents at refineries and other industrial sites.

Department of Energy: The 5.6 percent cut is accompanied by the move of $1.4 billion, another five percent, to other programs to boost “nuclear capabilities.” Eliminated programs include the Weatherization Assistance Program, the State Energy Program, and the Energy Star program which sets energy standards and saves taxpayers hundreds of billions of dollars. Co-sponsored by the Department of Defense, the Energy Star program cut equals two trips to Mar-a-Lago. Also gone is the DOE loan program for “limited, early-stage applied energy research and development activities” because “the private sector is better positioned to finance disruptive energy research.” Tesla was developed from one of these loans.

Department of Justice: The four-percent cut combines with increases in other DOJ programs such as incarceration and deportation.

Department of Labor: The $2.5 billion in cuts, a 21 percent drop, will significantly reduce funding for job training programs for seniors and disadvantaged youth. Gone will be the Senior Community Service Employment Program ($434 million) that helps low-income job seekers age 55 and older find work by pairing them with nonprofit organizations and public agencies. DDT said that only half the participants find unsubsidized jobs.  Job Corps, a program providing workplace training for disadvantaged youth, will be forced to close centers.

State Department and UAAID: The cut of 28 percent from last year eliminates U.S. funding to UN climate change programs including the Green Climate Fund. The $500 million committed for 2017 supports low-carbon and resilience project in developing nations. DDT will withdraw the $2 billion funding for the Paris climate program.

NASA: This agency, which studies climate and space, reports directly to the White House which has cut $102 million, four “Earth science missions.”

Department of the Interior: The agency that includes the Bureau of Land Management and the Bureau of Ocean Energy Management which are vital to oil, gas, coal, wind, and solar energy development has lost 12 percent of its budget.

Department of Agriculture: The 20-percent cut in this budget eliminates the Low Income Home Energy Assistance Program; the Community Services Block Grant; and NeighborWorks America, which supports neighborhood organizations that develop and maintain affordable housing. The agency’s water and wastewater loan and grant program, costing $498 million, has been cut.

The lucky ones—sort of:

Department of Defense: The only department with more money, DDT has allotted this one an additional $52 billion, an almost ten-percent increase.

Department of Commerce: The National Oceanic and Atmospheric Administration (NOAA) will keep its satellite program but lose “over $250 million in targeted National Oceanic and Atmospheric Administration (NOAA) grants and programs supporting coastal and marine management, research, and education including Sea Grant,” although the department got a ten-percent budget increase.

Only defense, homeland security against immigration, and commerce survived the giant whacks to the budget. Many voters, including those for DDT, decried the trillions of dollars sent to fight in the Middle East. Now DDT wants to siphon money to drastically pour into the military and immigration. Today, DDT asked Congress for $3 billion dollars for his mass deportation agenda that causes fear and chaos across the nation. Half the money would start building “the wall.” He wants to use the money for “the wall,” that even GOP congressional members don’t want and the private prison industry. As usual, DDT lives in a fantasy land because DDT had estimated the cost at $10 billion during his campaign and DHS had put it at $21.6 billion. Investment research firm Bertstein Research assumed higher, at $25 billion. Other speculations are even higher than that. Despite DDT’s promise that the money would come from Mexico, Mulvaney said about the $1.5 billion, “It’s coming out of the Treasury.”

What $3 billion could do to “make America great”: 45,000 new middle-class jobs in infrastructure; 184 new elementary schools; over 55,000 new kindergarten and elementary school teachers; tuition for almost 311,000 people at a four-year college per year; $10,000 in child care subsidies for 300,000 working class families; almost 337,000 Head Start slots for children; preservation and protection of 12,000 at-risk wildlife and plant species in the U.S. every year for the next 2.3 years; solar energy for almost 2.1 million households with solar energy; weatherization of 460,000 homes to save each household $283 each year; over 153,000 new AmeriCorps VISTA volunteers; 10 million life-saving HIV/AIDS treatments under the President’s Emergency Plan for AIDS Relief; or one new Curiosity-type Mars rover with money left over.

Ways that DDT’s budget hurts rural U.S. (aka DDT supporters):

Fewer Job Prospects: The budget slashes $2.6 billion in infrastructure mostly in small communities, cuts subsidies for wind energy that has provided 102,000 jobs primarily in rural communities and pays rural landowners, and scaremongers immigration delivering essential roles in rural communities and tax bases.

Health Damage: Doctor shortages and hospital closures will increase in rural areas through DDT’s proposed Trumpcare as well as cuts in programs for rural primary care providers and anti-immigration programs. Affordable Care Act repeal will also worsen the opioid epidemic with only $500 million in his budget to tackle this addiction. DDT is also draining resources from this issue by eliminating the White House’s Office of National Drug Control Policy.

Cuts to Basic Living Standards Such As Education, Affordable Housing, and Nutrition: The $1.4 billion increase in school vouchers will send students to failing private schools while his 15 percent cuts to successful programs such as teacher training, federal work-study, and after-school and summer-school programs for low-income students will damage public education. The $6 billion cut for affordable housing, including the elimination of the Community Development Block Grant, removes opportunities for repairing crumbling housing stock; helping seniors, veterans, and struggling individuals and families stay in their homes; and maintaining critical infrastructure systems that preserve residents’ access to clean water and protect them from toxic waste. Even a ten-percent cut in USDA rental assistance (see Department of Agriculture above) could make 27,000 families homeless, and two-thirds of NeghborWorks America serves rural United States.

More Hunger for Rural Children and Seniors: A high percentage of the three million people Supplemental Nutrition Assistance Program (SNAP) in 2015 for food live in rural communities. Secretary of Health and Human Services Tom Price advocates slashing this program. DDT’s budget severely cuts Meals on Wheels; eliminates $200 million from the Special Supplemental Nutrition Program for Women, Infants, and Children (WIC); and threatens other nutrition initiatives with a 21 percent cut to the USDA.

Reduction to Access to Justice and Jeopardy to Safety: DDT may eliminate grants to support intimate partner violence; survivors in rural areas have special difficulties from isolation and lack of transportation. The elimination of legal aid services would particularly impact rural communities and small towns. For example, the three principal legal aid service providers in Texas serve almost 140,000 low-income people, including almost 62,000 children, to protect them against wrongful eviction and denial of public assistance and services.

Other damaging cuts:

  • $3.9 billion from the Pell grant program proving tuition assistance for low-income college-bound students.
  • $2.4 billion that funds over 40,000 teacher positions.
  • $6 billion—a 20-percent cut—from cancer research.

Obviously, DDT lacks the competence and work ethic to prepare such a budget. It likely came from OMB Director Mick Mulvaney, who said that climate change research is “a waste of your money” and  “we can’t spend money on programs just because they sound good” about Meals on Wheels that feeds seniors. Mulvaney, worth $6.8 million in 2009, didn’t  pay over $15,000 in payroll taxes for a nanny because she just “helped my wife with the kids,” wants to eliminate Social Security and Medicare, claims that President Obama “manipulated” jobs data, and thinks that not raising the debt ceiling will have no “negative consequences.” He said that it wasn’t fair for coal miners or single mothers to pay the $1.38 a year for the Corporation for Public Broadcasting. I guess he thinks that they don’t watch public broadcasting or listen to public radio.

There is far more news about the budget such as these 80 programs that lose funding.

 

December 6, 2016

U.S. Military Waste

Filed under: Budget — trp2011 @ 10:32 PM
Tags: ,

The government is wasting its money on education and “entitlements,” cry the conservatives while they wring their hands about the failure of Social Security and Medicare to pay for itself. At the same time, Congress just passed a $619 billion budget for “defense,” up from $602 billion last year. That’s over one-third of the government’s “discretionary” funds. Their excuse is that the United States has to protect itself—maybe more valid now that President-elect Donald Trump (DT) is “shaking up” relationships with foreign countries such as China (aka alienating them).

An internal study obtained by the Washington Post shows $125 billion within five years in waste within the military. The annual $25 billion waste is more than this year’s budget increase. The $125 billion savings could come from early retirement and modernization of systems. The Pentagon spends almost one-fourth of its budget on overhead and core business operations such as accounting, human resources, logistics and property management. The back-office staff of 1,014,000 contractors, civilians, and uniformed personnel supports 1.3 million.

Last spring, William Hartung, director of the Arms and Security Project of the Center for International Policy, wrote about the “military waste machine.” He described how the Army pays $8,000 for helicopter gears worth $500, $2.7 billion for “an air surveillance balloon that doesn’t work,” and “billions of dollars’ worth of weapons components that will never be used.” Private companies like Dick Cheney’s Halliburton built such projects in Afghanistan as “a multimillion-dollar `highway to nowhere,’  a $43 million gas station in nowhere, a $25 million ‘state of the art’ headquarters for the U.S. military in Helmand Province . . . that no one ever used, and the payment of actual salaries to countless thousands of no ones aptly labeled ‘ghost soldiers.’ ” Last year, Pro Publica created an interactive graphic revealing $17 billion in wasteful U.S. spending uncovered by the U.S. Special Inspector General for Afghan Reconstruction.

People get outraged by $640 toilet seats but overlook the unbelievable cost of the F-35 jet, originally priced at $233 million despite its unusability. Even pilot’s helmets cost $400,000. With a projected 2,000 purchased, the expenditure will be astronomical. Just three months ago, the Air Force grounded ten of its first F-35 fighters. The policy is that the military will continue to throw more good money after bad because it’s already spent too much to quit. This site details many of the F-35 problems.

Above the defense budget is the Overseas Contingency Operations (OCO) budget, started by George W. Bush in 2001 to exceed the general military budget and now used as a war slush fund because anything can be purchased with it. Last spring, the House Armed Services Committee chair, Texas GOP Mac Thornberry, suggested providing $18 billion from this extra budget for an additional 11—useless—F-35 combat aircraft and 14 F-18 fighter-bombers that the Pentagon didn’t request. Right now the OCO is at $60 billion but could go up to $100 billion or higher.

Other money from the military comes from other programs worth about $10 billion each year, for example training and arming programs in 180 countries paid for by the State Department’s budget. More money is spent through the over $70 million in secret spending for everything from spying to high-tech weaponry.

Another “secret” is the funding for the B-21, the Air Force’s new nuclear bomber, that officials claim must be kept secret because there is “a strong correlation between the cost of an air vehicle and its total weight.” The excuse is used to avoid bad publicity from program costs that could go above $100 billion as part of a three-decade splurge of $1 trillion, a guess at expenditures before the typical of Pentagon overruns of sometimes four times.

To avoid trouble with its expenditures, the Pentagon developed the “National Sea-Based Deterrence Fund,” aka the Navy’s submarine slush fund. The idea is to separate costs for the new ballistic missile submarine program, slated to pay $139 billion for 12 subs, from the new surface ships that the Navy wants. The Air Force wants its own “strategic deterrence fund” for a planned bomber and a long-range nuclear-armed ballistic missile.

Despite a congressional mandate 25 years ago, the Pentagon fails to hold an audit. The Pentagon doesn’t know how much equipment it has, how much it’s being overcharged, and how many contractors it employs. Yet Congress keeps increasing the military budget because it’s a huge employer in their states—making equipment that the nation doesn’t need. Congressional members do this because they will keep getting elected—and now they have another excuse. DT wants everyone to look tough.

An attempted audit from the Defense Department of the Army showed trillions of dollars in accounting mistakes, fudging, and missing receipts or invoices to support its budget figures. Over 16,000 files had disappeared from the computer system of the Defense Finance and Accounting Service (DFAS) because of a computing software flaw. And they’ve spent $6 billion thus far on the botched audit.

With at least 900 bases outside its borders, the U.S. has troops stationed in 175 foreign nations and wages or threatens war in other nations that don’t have U.S. troops  such as Syria and Iran. In many cases, these bases are resented and hated, causing attacks against the U.S.—and the cost is over $100 billion a year.

Congressional members don’t mind wasting taxpayer money as long as these funds bring jobs to their state. Closing bases no longer needed would save $2 billion a year—a pittance when considering the bloated military budget—but a start. Congress responded to President Obama’s request to close these facilities by banning any studies of unneeded bases. Sen. Thad Cochran (R-MS) got $640 million to build a National Security Cutter that the Coast Guard said it doesn’t need.  Thanks to Sen. Susan Collins (R-ME), Maine got an extra $1 billion for a Navy destroyer to be built at the Bath Iron Works, again not requested by the Defense Department.

No one wants the “Littoral Combat Ship” (LCS) program for a ship that sails close to shore because the LCSs broke down at sea. Yet Austal USA, located in Alabama, got $3.5 billion for the contract. And Guantanamo costs the nation $454 million annually at a cost of $2.7 million per inmate. Congress insists on keeping the prison open.

A tremendous amount of money is lost to privatization. Oversight is almost impossible because the Pentagon has 1.7 million contracts open plus its system of “cost-plus” contracting. The more a private company charges, the higher the bonus—usually ten percent—no matter how bad the work is. Defense companies lobbying government officials and legislators to fight defense spending cuts and push for their contracts has made the military industry the eighth-largest sector in the nation. Their $100 million in lobbying fees brings in billions of dollars.

The worship of the military has led to a serious case of “affluenza” as the Pentagon eats up two-thirds of the federal government’s discretionary funds. By comparison, the departments of education, interior, and transportation cost taxpayers $95 billion, far less that the $750 billion spent on everything from golf courses around the world to a vastly increased number of three- and four-star generals and admirals. Chris Christie’s suggestion to solve the national debt was to take the $500 million from Planned Parenthood, equivalent to two F-35 jet fighters.

Any criticism of the military since 9/11 is taken as a betrayal of our nation’s ideals; the GOP campaigns on the falsehood that the military is being “gutted.” The GOP has convinced almost half the people in the United States that more money needs to poured into the military. DT’s slogan of “Make America Great Again” is translated as vastly increasing the military and having bigger and better killing toys.

This waste is nothing new: I wrote about it a year ago. And the year before that. And I’m sure I’ll be writing about it next year, especially because DT, the hawks he nominated for his cabinet, and the GOP-controlled Congress that will take money from the people of the United States to throw it at the Pentagon.

August 20, 2015

Pentagon Loses Taxpayer Money, Wants More

More money for defense and less money for taxpayers—that’s what Republicans want. Hillary Clinton’s emails a horrible and deliberate defense disaster—that’s what Republicans want to prove. The Pentagon missing $8.5 trillion? No mention and probably no problem. This expenditure is more than China’s economic output last year. The Defense Department’s budget was $567 billion, but no one knows how much of that money is spent as intended. The Pentagon is the only federal agency that has failed to comply with a two-decade-old law requiring audits of all government departments.

An extensive investigation by Scot Paltrow reveals the way that the U.S. military failed to submit to an audit, flouted federal law, and concealed the loss of billions of dollars through waste and fraud. Employees for the U.S. Department of Defense were told to put input fake data, called “plugs,” to reconcile military books with those of the U.S. Treasury. Now the records are filled with missing, unidentified, and wrong numbers. The same thing happened at the operational level.

The Pentagon consistently ignores warnings about its accounting practices from oversight agencies. It fails “to keep track of its money—how much it has, how much it pays out, and how much is wasted or stolen,” according to Paltrow. “Widespread pay errors inflict financial hardship on soldiers and sap morale, [but] pay errors are only a small part of the sums that annually disappear into the vast bureaucracy that manages more than half of all annual government outlays approved by Congress.” Accounting errors lead to loss of soldiers’ wages from unfounded accusations that soldiers have been overpaid. Without their salary, soldiers are forced to get food from charity pantries.

The Pentagon continues to spend money of supplies it doesn’t need and stores other items that it doesn’t need because it doesn’t keep track of weapons, ammunition, etc. It has a backlog of more than $500 billion in unaudited contracts with outside vendors, but it doesn’t know how much of that money has been paid for real goods and services. The Navy can’t account for ships, submarines, and other physical assets even after the $1 billion it spent to upgrade record-keeping.

Most of the Pentagon’s incompatible accounting and business-management systems—maybe 2,200 or 5,000, depending on who’s counting—were built in the 1970s and use obsolete computer languages on old mainframes. Even if someone could search for data, much of it is corrupted and just plain wrong. The tens of billions of dollars used to upgrade technology failed, adding to the waste. In the meantime, military knowingly signs off on entries that it knows to be false. Corporate managers certifying false financial reports suffer criminal penalties; the Pentagon’s officials have none.

Every year, the Pentagon buys more of what it already has in excess, defined as a three-year supply. In 2008, for example, it had 15,000 parts in stock for the “vehicular control arm” of the Humvees, equal to a 14-year supply. From 2010 through 2012, it bought another 7,437 of them at considerably higher prices as demand dropped by almost half. Nobody knows if these have been stored in the right bins, which makes inventory impossible. Nothing has been done to track employee theft. The Pentagon ordered the Defense Department to have a labeling system, a directive that the DOD ignored.

Obsolete supplies aren’t monitored although the Army is trying to detonate some C4 plastic explosives made in 1979. Nothing has been done with runway flares from the 1940s and warheads for Sparrow missiles not fielded since the 1990s. Rocket-launch systems retired in the 1980s take up space. “Keeping all those useless bullets, explosives, missiles, rifles, rocket launchers and other munitions costs tens of millions of dollars a year,” Paltrow reported.

Despite all these issues, Secretary of Defense Chuck Hagel said that a cut of $52 billion in 2014 was “too deep, too steep, and too abrupt.” His claim that “this is an irresponsible way to govern” sounds like the way that the Pentagon manages its finances. Hagel had no idea how much money the Pentagon had. In one office (Columbus, Ohio), duplicate entries across multiple ledgers led to mistakes for the Air Force in 2009, totally $1.59 trillion which included $538 billion for plugs—roughly eight times what the Air Force was allotted for that year.

Efforts to fix the problem have consistently failed. Deputy Secretary of Defense Gordon England established the Business Transformation Agency in 2006 to upgrade business operations and prepare the department for auditing. By 2009, the department had spent over $10 billion a year, but it didn’t stop business as usual. Defense Secretary Gates shut down the project in 2011.

How much of the $3 trillion spent on contracts for goods and services during the past ten years has been wasted in overpayments or never spent is not known. Bills are easily padded because detailed invoices are not required. The tremendous backlog to audit fulfillment of contracts came to 24,722 contracts worth $573.3 billion by the end of 2011. The Army’s backlog was 450,000 contracts in 2012. The Navy and Air Force don’t know what their backlogs are. To take care of the problem, the value at which a contract is automatically audited rose from $15 million to $250 million.

GOP presidential candidate Carly Fiorina is campaigning on making the U.S. Department of Education a “whole lot smaller.” As president, she would make the department “justify every single dollar every single year.” Nobody says that about the military. Fiorina also said that she doesn’t know what the Department of Education does. She could easily find the department’s reports and charts about its goals, the sources of its expenditures, and comparisons to previous year. It’s right here.

The Department of Education provides grants, including Pell grant funding; makes sure that states spend federal money as they should; keeps schools from gender discrimination per Title IX; and collects national education data. Without federal oversight, states won’t spend the Title I money as intended to effect education equality. The Department also checks on the for-profit college industry, i.e., fining Corinthian Colleges because it misrepresented job placement data.

Fiorina decried “complicated accreditation” for these for-profit colleges that she found to be “expensive.” These colleges, however, have higher student loan debt and poor completion rates because their accreditation rules are already too loose. HuffPo reported that accrediting boards frequently have executives from for-profit colleges, perhaps the reason that none of the five major companies had the accreditation revoked in the past ten years and fraudulent job placement data was ignored.

The budget for the Department of Education for this year is $68.8 billion, and the agency knows where its money goes because it’s the law. The Department of Defense’s budget is $567 billion—about 12 percent of the budget for the Department of Education—and the DOD has no idea where it goes because it flouts the law. Below is what $8.5 trillion dollars looks like in $100 bills. That’s what the Pentagon has been allotted during the past 20 years with no accountability.

trillions of dollars

Food stamp fraud may account for about $500 million (less than one cent per each dollar of the $82 billion), but the Pentagon has lost $8.5 trillion. That amount has cost each household approximately $70,000. In 2013, about 45.3 million people, including 14.7 million children, lived in poverty in the United States—14.5 percent of the population and the largest number in the 54 years that statistics have been kept. Almost one in five children live in poverty.

Lack of government support has driven tuition for higher education sky-high. The student debt is now at $1.2 trillion in the United States, and the costs will cripple the future for both young people and the economy. People will have to pay down this debt instead of buying houses and cars, shoring up the GDP.

Conservatives caused this inequality, but they are determined to deny help to any of these people. Yet they are willing to distribute over one-half trillion dollars every year to an agency that has no idea how the taxpayer money is spent. For conservatives, a steak or shellfish or shredded cheese is outrageously out-of-bounds for food stamp recipients, but 22,437 extra Humvee front ends are just fine. Billions of taxpayer dollars for failed business systems or excessive purchases of supplies or unfulfilled government contracts or unpaid soldiers or lack of audits that break the law are acceptable. Conservatives need to look at their priorities.

July 6, 2015

GOP Wants U.S. to Have Problems of Greece

Filed under: Budget,Uncategorized — trp2011 @ 9:06 PM
Tags: , ,

Greece’s vote of 61 to 39 percent against austerity measures this past week leaves the country in limbo as its creditors are wondering what to do about the country. Greek banks are still closed, the economy is in chaos, and a new bailout agreement may cost them more. But evidence shows that the Greeks are right about austerity, and more of it will hurt their economy.

more_austerity_for_greece_chappatte

Five years ago, the International Monetary Fund (IMF) told Greece that the austerity measures would restore the market’s confidence in its debt, help the country’s economy rebound in the medium term, and have a negative, but survivable, impact on output and unemployment. It didn’t. Higher recession and exceptionally high unemployment in Greece have been accompanied by a lack of market confidence and the loss of 30 percent in banking deposits. The economy shrank by 17 percent instead of 5.5 percent, and the unemployment rose to 25 percent instead of 15 percent. In the past seven years, the economy shrank 25 percent, and a report stated that “productivity gains proved elusive.” At the same time, “public debt remained too high and eventually had to be restructured.”

The failed estimates to solve Greek’s problems came from a flawed paper by economists Carmen Reinhart and Kenneth Rogoff who tried to prove that economic growth slows down when countries’ public debt reaches 90 percent of their GDP. The authors had excluded times where countries had both high debt and average growth, used debatable methods to weight countries, and made a coding error that excluded even more countries with high debt and steady growth. Fixing the errors showed that Reinhart and Rogoff were wrong, and a reanalysis revealed that the opposite result is true—that slow growth leads to high debt. When austerity measures hurt the economy, they damage, more than help, debt levels.

Greece’s high debt levels have historical precedent as does the concept that Greeks don’t have to immediately repay debts. Authority Thomas Piketty said, “Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted.” When countries such as Great Britain used austerity to deal with debts, England took over 100 years to do so, costing the country 2 to 3 percent of its economy. Germany, the country leading the call for austerity in Greece, “has never repaid its external debt,” according to Piketty. Although German debt was over 200 percent of its GDP after World War II, it shrank to 20 percent ten years later because 60 percent of its foreign debts were cancelled in 1953 along with an internal debt restructuring.

Piketty recommends a combination of debt relief, inflation, and a tax on private wealth. He said, “Europe was founded on debt forgiveness and investment in the future. Not on the idea of endless penance.”

Austerity means less spending. Less spending means less demand. Less demand means less money to hire workers, pay contractors, or to pay for pensions. Increased taxes for the poor and middle class has the same problem: higher taxes for consumers means less money to spend. Greece massively cut spending and raised taxes, but the country still has a budget deficit because unemployed people don’t pay taxes and businesses losing money don’t pay taxes. Germans and others in northern Europe complain about giving money to “lazy” Greeks and other southern Europeans, but the economic policies of the northern Europeans run deficits in southern Europe. If Germany and other wealthier countries boosted poor countries through a greater expansion of fiscal policy, the latter wouldn’t need handouts.

People in the United States need to note the Greek situation because the GOP is trying to do the same thing to the U.S. that the European Union did to Greece. After George W. Bush caused the trajectory toward a large deficit with his tax cuts for the wealthy, two wars, and ignorance regarding the housing bubble, the GOP decided that austerity was the only cure for the problem. A conservative, Gene Steuerle, set out to show how wrong the government has been to create programs such as Social Security, Medicare, and Medicaid and proved the opposite. It’s the same situation as in Greece: the more money people have to spend, the greater the economy. Giving wealthy people tax cuts does no good because they shelter or spend it overseas, giving no support to the U.S. economy. For example, Walmart has 78 shell companies in 15 tax havens with $76 billion in just Luxembourg and the Netherlands.

What helps the economy is investing in the future through government spending that benefits large parts of the population. All the countries that reduced their deficit the most since 2010 have the worst employment performance.

Another GOP-caused problem is the cost for health care. The United States pays over twice as much per person in this area as the other wealthy countries but gets nothing extra in terms of outcomes. The U.S. doesn’t get better health care than Germany, Canada, or France; it just pays much more. The U.S. pays twice as much for doctors, drugs, medical equipment, etc. while throwing money at insurance companies.

A serious GOP problem is its obsession with the “free market,” the belief that all innovation and growth come from the private sector. Nations relying on private industry have become stagnant because private companies rehash old ideas and stash their money in foreign tax havens. The iPhone was revolutionary, but its touch screen, GPS, and processor were funded by some country’s government. The iPhone 5 just uses different materials than the iPhone 4 does. Most of this country’s R&D funding goes to refining existing technologies. Private companies care only for short-term immediate profits, but governments aren’t forced into this box. If the U.S. had invested in R&D instead of Sollyndra or other similar companies, technologies in improved solar could have been innovative. That’s the real competition from China that the U.S. fears.

Two years ago, a report showed that over 2 million people were unemployed in the country almost four years after the end of the 2008 recession because of austerity measures. During that time, federal, state, and local governments cut about 500,000 jobs compared to the average of 1.7 million people hired in every other recession since 1970. The GOP’s tight fiscal policy kept the economy from growing.

Paul Krugman wrote that “austerity policies serve the interests of wealthy creditors.” Since World War II, only three presidents before President Obama left office with a larger debt ratio than when they came in—Ronald Reagan and the two George Bushes, the three with hard-line conservative governments. Those are the ones “deprive the government of the revenue it needs to pay for popular programs.”

If the U.S. emulates Greece, the country can expect these outcomes. Austerity kills and injures:

  • Stillbirths rose by 21 percent between 2008 and 2011 because of scaled down prenatal health services for pregnant women while infant mortality surged by 43 percent between 2008 and 2010.
  • Deaths by suicide increased by 45 percent between 2007 and 2011 with the general deterioration of life due to austerity from unemployment, poverty, reduction of the minimum wage, and lack of disposable income.
  • New HIV infections among injecting drug users rose from 15 in 2009 to 484 in 2012 while tuberculosis more than doubled between 2012 and 2013 after lack or prevention and treatment care.
  • Malaria re-emerged for the first time in 40 years after significant cuts in municipal budgets reduced mosquito-spraying programs.
  • The use of mental health services increased by 120 percent although public funding for mental health dropped by 20 percent between 2010 and 2011 and by an extra 55 percent between 2011 and 2012.

Austerity leads to neo-facism. The greater the income inequality, the larger the response from right-wing, neo-facist parties. Just as Europeans failed to develop a shared political union, the 50 states in this country are splitting farther apart. The culture of austerity exacerbates social stresses and leads to populist challenges. If Social Security and Medicare were to disappear, as many far-right legislators in the United States hope, rivalries would grow and white supremacists would gain greater and greater power in the ensuing increase of poverty.

Conservatives in the United States use austerity for their own means. When they wanted war, they followed Vice-President Dick Cheney’s statement, “Reagan proved deficits don’t matter.” Their purpose is to gain power and white entitlement by advancing big business through destroying worker control and exerting control over minorities through ridding themselves of the “welfare state.” Reducing spending on the government causes a greater percentage of blacks to lose their jobs than whites. Increasing unemployment puts a larger percentage of blacks without work than whites.

While the United States struggled with slow economy because of the GOP austerity measures, the austere policies in some GOP-controlled states, for example Kansas and Wisconsin, have destroyed the people. Louisiana State University is considering bankruptcy. Kansas’s austerity program drove the state so far into the ground that it shut down the website for the state economic development agency. That’s where the GOP wants the United States to go.

May 15, 2015

House Gives DOD $612 with No Audit

When sequestration spending caps were passed in 2011 to avoid the debt ceiling crisis, over 200 congressional Republicans voted in favor of the law. Since then, the GOP has not changed the law, but today the House defied it by passing a $612 billion defense bill with all except eight Republicans  in favor of the budget. Ceilings on everything else–infrastructure, safety net, etc.–are just fine, according to these Republicans, but the war industry needs more money.

Speaker John Boehner (R-OH) moaned about Democrats ignoring all “the sacrifices [the troops] make,” calling the Dems opposition “indefensible.”  The word “indefensible” is appropriate for the GOP’s refusal to protect military personnel and their families from predatory lending. After Defense Department officials created new safeguards last fall to implement new protections in this area, House GOP members tried to add a provision to the defense bill that would delay the new rules for at least a year. When that failed, Rep. Steve Stivers (R-OH) introduced legislation to again block the DOD from putting its rules into effect. Payday loan companies gave almost $70,000 to Stivers’ campaign.

On the first day of the 114th Congress, Republicans made a rules change to cut 20 percent in Social Security disability benefits, hurting disabled veterans. The proposed GOP change in food stamps will deny 60,000 veterans this life-saving benefit. This year’s GOP funding bill is $1 billion short on providing care and services to veterans.

Last year the GOP failed to support bills that would help veterans have job security, retraining, counseling, and scholarships. Another failed bill because of the GOP would increase VA funding for home structural improvements for those veterans more than 50 percent disabled—for example, those who need a wheelchair ramp in order to live at home.

One of the 135 amendments that passed was a provision by Rep. Frank Lucas (R-OK) to stop the re-listing of the lesser prairie chicken on the endangered species list until 2021, unless the Interior Department determines that a conservation plan is not working. It passed 229-190. Someone might want to ask him how the lesser prairie chicken is related to defense.

A proposed amendment to consider undocumented immigrants with work permits through the DREAMERS program to serve in the military was voted down. Rep. Mo Brooks (R-AL) said the rejection was a jobs issue because the military is downsizing.

Also voted down was an amendment “in the form of a limited and narrow authorization against ISIS” because “the defense bill was not the place to debate the war,” according  Rep. Adam Schiff (D-CA).  As he added, “If not here, where?” President Obama’s airstrikes against ISIL began nine months ago, and he sent a proposal about this authorization three months ago. The GOP has avoided any discussion of this issue in Congress that has cost $2.1 billion with 3,700 airstrikes and about 3,000 military personal sent to Iraq. While the House GOP members are suing the president for his other actions, they oppose reining in his war authority. Rep. Jim McGovern (D-MA) claims that the GOP can’t find 218 votes for any action.

As the GOP pushes the defense funding increase through the House, the Republicans ignore the history of DOD waste. The $400 billion Pentagon’s F-35 Joint Strike Fighter can’t pass even the most basic requirements necessary for flying in combat. At this time, it’s $170 billion over budget, and the only thing soaring about it is the cost. Auditors question whether it can serve its purpose as the Pentagon continues to throw more money at it. The jet is vulnerable to engine fires because of its design and the “precision-guided Small Diameter Bomb II doesn’t even fit on the Marine’s version of the jet,” according to Military.com. Software necessary to operate the bomb won’t be operational for another seven years–2022.

Recently appointed Secretary of Defense, Ashton Carter, oversaw the development of the F-35 fighter jet, which will cost the United States an unprecedented $1.5 trillion. He also oversaw production of $50 billion worth of MRAP armored vehicles with thousands of them scrapped almost immediately at a loss of over $2 billion. The 27,000 MRAPs sent to Iraq and Afghanistan resulted in an over-supply and were then decommissioned to militarize U.S. police departments in places as small as Dundee (MI), population 3,900. To Carter, “nuclear weapons don’t actually cost that much.” This is the program that will cost up to $1 trillion in the next three decades.

Federal auditors found a loss of $43 billion in Afghanistan reconstruction. The Pentagon has no answer for the missing funds other than it may have gone to more direct war needs. John F. Sopko, special inspector general for Afghanistan reconstruction, said, “It’s like you gave your credit card to your teenage daughter or son and then you just never looked at the bills.” Tracking the $100 billion allocated for relief and reconstruction has been almost impossible. “We don’t even have a list from (the Defense Department) of where they spent the money. We have no centralized list of where the taxpayer money went in Afghanistan,” Sopko said.

A never-used $600 million C-27 aircraft sits on runways in Kabul and Germany, and a massive $34 million command center in Helmand has never been used and will probably be leveled. The empty 64,000-square-foot command center with an expensive air-conditioning system can hold over 1,000 people. Its incinerators cost $11.5 million, but no one was hired to run the machines. The military burned its trash in an open-air pit.

The Pentagon spent $7.6 billion fighting a war on opium in Afghanistan where the poppy crop is bigger than ever. The U.S. Air Force bought half a billion dollars worth of transport planes and scrapped them for six cents a pound. The U.S. Army Corps of Engineers built thousands of buildings for the Afghan military where contractors used low-quality insulation that’s so flammable that international codes prohibit its use. When contractors promised to stop its use and replace the faulty insulation, Maj. Gen. Michael Eyre stopped them. He wrote in a 2014 memo:

 “The typical occupant populations for these facilities are young, fit Afghan soldiers and recruits who have the physical ability to make a hasty retreat during a developing situation.”

The DOD wastes billions of dollars in just spare parts. For example, Boeing overcharges up to 177,000 percent; Hamilton Sundstrand is more reasonable at only 900 percent. A redacted version of a July 2014 report showed that the Pentagon overpaid Bell Helicopter 395 percent-$9 million–just on 33 of 35 sole-source commercial parts.

GOP legislators and presidential candidates are being lobbied by arms dealers to raise the defense budget and go to war. Former Rep. Mike Rogers (R-MI), ex-chair of the House Intelligence Committee, heads up the group called Americans for Peace, Prosperity and Security to front for the military-industrial complex. Known for claiming that Edward Snowden was a Russian double agent, Rogers pushed for unlimited surveillance through the CISPA bill and support of NSA.

Rogers’ wife, Kristi Rogers, serves as President and CEO of Aegis LLC, a defense contractor with a $10 billion contract to provide security and intelligence-gathering services to the State Department. The board of his lobbying group is a virtual who’s who of the defense industry and a prominent partner of the New Hampshire GOP.  The situation is reminiscent of former Vice President Dick Cheney’s $34 million pay-off oilfield services provider Halliburton before he instigated the 2003 invasion of Iraq.

The Pentagon doesn’t even want some of the things that Congress is pushing on them. For example, this $8.76 billion:

  • $4.7 billion: refueling the USS George Washington.
  • $1.46 billion:  15 EA-18G Growler electronic warfare planes.
  • $1 billion: starting on an additional San Antonio-class amphibious transport dock ship.
  • $479 million: four F-35 fighter jets raising the total to 38).
  • $341 million: modernizing 12 Apache helicopters and nine Black Hawk helicopters.
  • $200 million:  another Joint High Speed Vessel ship.
  • $155 million: 12 more MQ-9 Reaper drones.
  • $154 million: another P-8A Poseidon Navy surveillance aircraft.
  • $120 million: M1 Abrams tank upgrades.
  • $150 million: medium and heavy tactical vehicles.

In the past 46 years, food stamps have cost taxpayers $1.035 trillion. That’s less than three times the annual defense budget that the House passed today. Wisconsin is trying to keep people on food stamps from buying shredded cheese while the $43 billion lost in Afghanistan is negligible. At the same time that Congress adds to the defense budget, it cuts security for embassies.

The following chart shows how the U.S. defense budget compares to those in the countries nearest the U.S. in expenditures:

military 2015

The House plans to throw at least $612 billion at the Pentagon without knowing where the taxpayer monies go. In 1990, Congress passed a law requiring all government agencies to achieve audit-readiness. Only the Pentagon has not achieved this within the ensuing two and a half decades. Since the first audit was due in 1997, Congress has extended the deadline several times, most recently until 2017. Boehner and the other House members who voted for the bloated defense budget must instinctively know that the Pentagon needs $612 billion. If Amtrak can survive on an 18-percent reduction, so can the Department of Defense.

April 15, 2015

Tax Day: Bad, Good, Ugly

Filed under: Budget — trp2011 @ 9:11 PM
Tags: , , , , ,

On Tax Day 2015, far fewer people waiting in line because of electronic filing. Wealthy people increasingly pay less and less since the 90-percent tax rate for the richest filers in the 1950s. Every time that the GOP controls Congress, the wealthy benefit from additional tax breaks, and corporations get more subsidies. Every year, the United States has less and less investment funds for the infrastructure, education, climate change, job creation, etc. Corporations have dropped their share of federal revenues by almost three-fourths since the almost 40 percent in 1943 to only 11 percent now. The less that the wealthy and corporations pay, the more the bottom 80 to 90 percent of the people have to shell out.

The corporate tax rate may be 35 percent, but their actual payment is about 13 percent, less than a large percentage of people pay. Some companies pay no taxes. FedEx made profits of $5 billion between 2010 to 2012 and received $10 billion in federal contracts between 2006 and 2012, yet paid no income taxes. With billions of dollars in profit, Verizon and Pfizer paid no taxes while receiving billions of federal tax refunds. In 2013, corporate tax breaks cost U.S. taxpayers $176 billion in revenue, $1,328 per household. These corporate tax breaks have more than doubled since 1993. More is spent on corporate welfare than traditional welfare. Tax breaks, 17 percent of benefits going to the top 1 percent of households, are equal to more than the entire U.S. discretionary budget each year. The revenue loss of over $1 trillion each year is over 1.6 times the 2013 budget deficit.

estate tax

Instead of trying to close loopholes on Tax day, House Republicans are arranging a gift for the top 0.02 percent of U.S. households. Calling the estate tax the “death tax,” GOP members of the House announced a vote to repeal the tax on 4,700 estates out of 2.6 million deaths—one-fifth of one percent. The median household net worth was only $81,200 in 2014. Instead of paying the 40-percent rate, this 0.02 percent owe a rate of only 16.6 percent estate tax, because it applies to only an estate’s value of over $5.43 million. No taxes are required for the first $5.43 million.

If the law isn’t changed, the estate tax will bring in $246 billion in the next decade. Less than 1 percent of federal revenue, “it is significantly more than the federal government will spend on the Food and Drug Administration, the Centers for Disease Control and Prevention, and the Environmental Protection Agency combined,” according to the Center on Budget and Policy Priorities. A common complaint is that the estate tax hurts small and family businesses, including farms. In 2013, the 20 farms and businesses worth under $5 million paid a tax rate of 4.9 percent.

While House Republicans care for the wealthy, they have a budget to eliminate food stamps for 11 million people through a 34-percent reduction. That $125 billion cut from the Supplemental Nutritional Assistance Program (SNAP) will cost the economy 286,000 jobs. As families have less to spend on food, that reduced purchasing power ripples through the economy, translating into job losses not just in grocery and retail stores but also in trucking, warehousing, food manufacturing, farming, and other industries. Money for the wealthy does nothing for job creation, but a woman testifying about her past experience receiving food stamps said, “Without this program, I wouldn’t have been able to start my new career.” Just one week of the proposed estate tax cuts could feed more than 337,000 children for a year. The GOP answer to helping hungry people is charity. I suggest leaving both laws the way they are and create a GoFundMe collection for the top 0.02 percent who pay estate taxes.

This year’s Tax Day is memorable because Congress passed a sane law to end to the annual need for Medicare “doc fixes”–and in a grandly bipartisan manner. Only eight of 100 Senators voted against the bill, two of them the declared GOP presidential candidates Ted Cruz and Marco Rubio. The House passed the bill by 392-37. The bill got out of Congress just hours before Medicare providers would have had a 21-percent cut in payments.

The new law also funds the Children’s Health Insurance Program and community health centers for two more years. Republican Senators also failed to get a “repeal Obamacare” amendment attached to the bill. Senate Majority Leader Mitch McConnell said the bill’s passage is a sign that Congress is “back to work” under Republican leadership. And it took them only 105 days. (More details about the new law here.)

Sen. Bernie Sanders (I-VT) spent his time on Tax Day introducing a bill to recoup $590 billion from 83 companies using offshore tax havens to avoid paying taxes. Senator Elizabeth Warren called on lawmakers to break up big banks and change tax rules that benefit Wall Street.

Abraham Lincoln died 150 years ago today. He is the “Republican” who the GOP drags out into the media to show how wonderful today’s GOP members are. Here is the tweet from the GOP to commemorate his death:

abraham lincoln

And that’s Tax Day 2015.

March 20, 2015

Krugman Comments on GOP Budget; Cotton Supports Netanyahu

Paul Krugman’s column on the GOP perfidy:

By now it’s a Republican Party tradition: Every year the party produces a budget that allegedly slashes deficits, but which turns out to contain a trillion-dollar “magic asterisk” — a line that promises huge spending cuts and/or revenue increases, but without explaining where the money is supposed to come from.

But the just-released budgets from the House and Senate majorities break new ground. Each contains not one but two trillion-dollar magic asterisks: one on spending, one on revenue. And that’s actually an understatement. If either budget were to become law, it would leave the federal government several trillion dollars deeper in debt than claimed, and that’s just in the first decade.

You might be tempted to shrug this off, since these budgets will not, in fact, become law. Or you might say that this is what all politicians do. But it isn’t. The modern G.O.P.’s raw fiscal dishonesty is something new in American politics. And that’s telling us something important about what has happened to half of our political spectrum.

 

So, about those budgets: both claim drastic reductions in federal spending. Some of those spending reductions are specified: There would be savage cuts in food stamps, similarly savage cuts in Medicaid over and above reversing the recent expansion, and an end to Obamacare’s health insurance subsidies. Rough estimates suggest that either plan would roughly double the number of Americans without health insurance. But both also claim more than a trillion dollars in further cuts to mandatory spending, which would almost surely have to come out of Medicare or Social Security. What form would these further cuts take? We get no hint.

 

Meanwhile, both budgets call for repeal of the Affordable Care Act, including the taxes that pay for the insurance subsidies. That’s $1 trillion of revenue. Yet both claim to have no effect on tax receipts; somehow, the federal government is supposed to make up for the lost Obamacare revenue. How, exactly? We are, again, given no hint.

 

And there’s more: The budgets also claim large reductions in spending on other programs. How would these be achieved? You know the answer.

 

It’s very important to realize that this isn’t normal political behavior. The George W. Bush administration was no slouch when it came to deceptive presentation of tax plans, but it was never this blatant. And the Obama administration has been remarkably scrupulous in its fiscal pronouncements.

 

O.K., I can already hear the snickering, but it’s the simple truth. Remember all the ridicule heaped on the spending projections in the Affordable Care Act? Actual spending is coming in well below expectations, and the Congressional Budget Office has marked its forecast for the next decade down by 20 percent. Remember the jeering when President Obama declared that he would cut the deficit in half by the end of his first term? Well, a sluggish economy delayed things, but only by a year. The deficit in calendar 2013 was less than half its 2009 level, and it has continued to fall.

 

So, no, outrageous fiscal mendacity is neither historically normal nor bipartisan. It’s a modern Republican thing. And the question we should ask is why.

 

One answer you sometimes hear is that what Republicans really believe is that tax cuts for the rich would generate a huge boom and a surge in revenue, but they’re afraid that the public won’t find such claims credible. So magic asterisks are really stand-ins for their belief in the magic of supply-side economics, a belief that remains intact even though proponents in that doctrine have been wrong about everything for decades.

 

But I’m partial to a more cynical explanation. Think about what these budgets would do if you ignore the mysterious trillions in unspecified spending cuts and revenue enhancements. What you’re left with is huge transfers of income from the poor and the working class, who would see severe benefit cuts, to the rich, who would see big tax cuts. And the simplest way to understand these budgets is surely to suppose that they are intended to do what they would, in fact, actually do: make the rich richer and ordinary families poorer.

 

But this is, of course, not a policy direction the public would support if it were clearly explained. So the budgets must be sold as courageous efforts to eliminate deficits and pay down debt — which means that they must include trillions in imaginary, unexplained savings.

 

Does this mean that all those politicians declaiming about the evils of budget deficits and their determination to end the scourge of debt were never sincere? Yes, it does.

 

Look, I know that it’s hard to keep up the outrage after so many years of fiscal fraudulence. But please try. We’re looking at an enormous, destructive con job, and you should be very, very angry.

 

[Another commentary on Tom Cotton’s perfidy: The senator responsible for leading 47 percent of the Senate to destroy President Obama’s negotiations with Iran to get keep the country from building nuclear weapons is now concerned about the U.S. State Department’s cautious approach toward Netanyahu’s opposition to a two-state solution with Palestine. After the spokesperson Jen Psaki told reporters that “we’re currently evaluating our approach,” Cotton came out swinging:

 

“While Prime Minister Netanyahu won a decisive victory, he still has just started assembling a governing majority coalition. These kinds of quotes from Israel’s most important ally could very well startle some of the smaller parties and their leaders with whom Prime Minister Netanyahu is currently in negotiations. This raises the question, of course, if the administration intends to undermine Prime Minister Netanyahu’s efforts to assemble a coalition by suggesting a change to our longstanding policy of supporting Israel’s position with the United Nations.”

 

Cotton, the man who undermined his own president through his letter to Iran and his support of Netanyahu’s coming to lobby for war on Iran is worried about undermining? The senator long ago declared that his letter ‘s purpose was to target international diplomacy, undermine American foreign policy, and disrupt officials during their ongoing negotiations.

In return, Cotton worries that the term “evaluating our approach” will “startle” officials abroad who are “currently in negotiations.” On the Senate floor, Cotton added, “I fear mutual respect is of little concern to this administration. The president and all those senior officials around him should carefully consider the diplomatic and security consequences of their words.” We can only assume that Cotton is trying to match the high level of hypocrisy that Netanyahu has established this past week.]

February 2, 2015

President Releases Budget, Opposes GOP in Mandatory Vaccinations

Have you heard all that squealing coming out of Washington, D.C. today? It’s not Sen. Joni Ernst (R-IA) castrating pigs with the new tool that Sen. Lindsey Graham (R-SC) gave her. No, it’s the release of President Obama’s 2016 budget, the book of how to get money and where to spend it.

In brief, he wants more spending, tax breaks for the middle class and poor workers, and higher taxes on the wealthy and large banks. The entire process is symbolic because Congress passes the budget, and this year’s Congress is GOP-controlled. Therefore, Congress will largely ignore anything that the president recommends. The budget, however, is a distinct document about the values of political parties and individuals, and the president has set up the debate for these issues.

  • Expand the child care tax credit by up to $3,000 per child;
  • Establish a $2.2 billion grant program to encourage states to create paid sick and family leave programs;
  • Begin a four-year program to improve roads, bridges and railways nationwide;
  • Help pay for preschool for 4-year-olds from poor and middle-income families;
  • Expand and extend tax credits for parents paying for child care, college students paying tuition, and low-wage childless workers;
  • Increase the Pentagon’s budget by $38 billion;
  • The president’s budget wishlist:
  • Increase the pay of military and federal employees by 1.3 percent;
  • Extend unemployment insurance;
  • Provide $215 million for research known as “precision medicine,” which involves using patients’ genetic information to tailor medications specifically to their bodies;
  • Set up a dedicated fund for fighting wildfires.

Declining debt: Sen. Orrin Hatch (R-UT) accuses the president of being “fiscally irresponsible,” but according to the White House, the budget will begin to pay down the national debt while not increasing the debt. Officials say that the plan gives a $474 billion deficit, 2.5 percent of the GDP, down from $583 billion and matching the deficits of the past 50 years. The recent increase in the deficit came from tax funding because of decreased income. With cuts in federal spending and increased taxes, the deficit has declined. A growth in economy during the next decade with the president’s proposals will cause the debt to decline to represent 73.3 percent of GDP in ten years, down from the current 75 percent.

Funding sources: The president has always wanted limits on tax breaks that help the top two percent of the wealthy to keep the deficit in line. This proposal reduces the deficit by $1.8 trillion through spending cuts and tax increases, possibly one on tobacco to pay for early childhood education.

Other possible proposals:

  • Raising the capital gains tax, paid by investors when they sell at a profit.
  • Imposing a new tax on inheritances.
  • Cutting corporate tax rate to 28 percent while taxing overseas profits at 14 percent when companies bring them back to the United States.
  • Levying a tax on large banks to compensate for the advantage they gain in the market from being seen as “too big to fail.”

Affect of new taxes: Families with children would benefit from the credit for child care, but the increase in the capital gains tax and the tax on banks could mean higher prices or lower wages.

GOP response: House Ways and Means Committee Chairman Paul Ryan (R-WI) said that his party will not separate corporate tax reform from an overhaul of the individual tax code. They want to raise funding for the military but no one else.

The next step: The GOP will have to put together its own budget, hoping to keep both voters and the wealthy contributors to their campaigns happy. Right now, they’re worried about passing a bill that funds Homeland Security before February 28 of this year.

The budget fails to follow the sequestration that imposed automatic spending cuts, but the austerity of the past several years may be loosened because the GOP are going to want some of the same things that the president does. For example, the highway trust fund is empty by June: people in both parties understand that the U.S. infrastructure is rapidly crumbling, making this area a priority.

President Obama’s budget plan would end the strict spending caps on domestic and defense programs by raising military spending by $38 billion over the capped level and nondefense spending by $37 billion. Social Security spending would rise from $891 billion this year to $1.6 trillion in 2025, and Medicare would climb from $529 billion to over $1 trillion. These programs would increase from 13.2 percent of the economy this year to 14.8 percent in a decade, while domestic and defense programs under Congress’s discretion would shrink to 4.5 percent of the economy in 2025, from the current 6.4 percent. Tax increases on the wealthy, big banks, and fees of hedge fund and private equity managers would raise almost $1 trillion in the same time. If the House passed the former Senate bill on immigration, the deficit could shrink by $158 billion.

The GOP may not want to give a one-time corporate tax rate on overseas profits brought back into the country to be used for infrastructure construction, but it’s an idea put forward by Sen. Rand Paul (R-KY) who also wants to be president. Tech giants like Apple, Google, and Microsoft are some of the corporations that keep most of their cash abroad to avoid paying U.S. taxes. After the initial 14 percent tax to bring the money home, companies would have to pay at least 19 percent on future offshore earnings with no loopholes or opportunities for deferral. Companies have at least $2 trillion overseas.

The president’s goal for transportation and infrastructure of $478 billion is more than one-third above the current spending rate and a 75 percent increase for mass transit. Half of that money would come from the current taxes on gasoline and other fuels. Another $238 billion would come from the one-time surge of taxes as corporations are forced to pay 14 percent on profits now parked abroad.

The proposal of a major expansion of the earned income credit for low-income workers without children is also backed by Ryan.

The talk about vaccinations overshadowed the discussion of the president’s budget on the media today. President Obama came out yesterday and said that he thought that vaccinations were vital. With an outbreak currently at 102 cases in 14 states possibly because children were infected at Disneyland, the spread across the nation is becoming more dangerous. The 644 cases last year in the U.S. was the most since the early 1990s. About two of every 1,000 people with measles will die; others suffer hearing loss, pneumonia, and brain swelling.

Two potential presidential candidates said today that vaccinations should be optional rather than mandated. Trying to look presidential while touring a vaccine laboratory in Cambridge, England, New Jersey Gov. Chris Christie, who forcibly isolated healthy Kaci Hickox because of her proximity to Ebola victims, asked for “some measure of choice” regarding vaccinations against measles and other diseases in children. He was followed by Sen. Rand Paul (R-KY) who said that move vaccines should be voluntary because children end up “with profound mental disorders after vaccines.” Paul added, “The state doesn’t own your children.”

Public outcry caused Christie to back-pedal; an aide said that he believes vaccines are “an important public health protection.” On the other hand, Paul doubled down on his claim that vaccinations should all be “voluntary.” He has an anti-vaccine history with his past membership in Association of American Physicians and Surgeons, a group of pro-life doctors who believe that abortion increases the chance of breast cancer in women, consider Medicare to be “evil” and “immoral,” question the link between HIV and AIDS, and protest vaccinations for health workers.

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