Nel's New Day

September 10, 2014

Congress Returns to Take More Money from Poor

The peace of Congress’s long summer vacation of Congress is over, and legislators have straggled back into Washington, D.C. (“don’t care,” according to Sen. Mitch McConnell’s (R-KY) opponent, Alison Grimes). Sen. Ted Cruz (R-TX) is highly incensed that his party supported a debate on overturning Citizens United. The vote was 79-18 to explore an amendment that would return the regulation of campaign funding to Congress. That’s 25 GOP senators who voted for debate. In his opposition, Cruz said that the measure would ban Saturday Night Live and throw Lorne Michaels into prison because of the program’s political satire. The bill, which has no connection to Cruz’s “reality,” is here.

Fights over government funding scheduled to begin tomorrow have been delayed because of President Obama’s speech and the rising issue about ISIL. It will have to be dealt with before the end of September, however, or the United States will face another government shutdown. As voters ponder on the wisdom of the GOP approach toward starving the United States, let us consider their history of profligate spending during the past few years:

  • $350,000: initial cost of suing the president for nothing with Baker Hostetler charging $500 per hour.
  • $1.3 million: 2011 delay in raising the debt ceiling causing the Conference Board’s Consumer Confidence index to plunge from 59.2 in July to 45.2 in August.
  • $3 million: cost for House to defend ban on marriage equality that the Supreme Court overturned last summer.
  • $24 billion: loss in the U.S. economy because of the GOP 2013 government shutdown which doesn’t include shaving 0.6 percent off fourth-quarter GDP growth. During the shutdown, approximately 800,000 federal employees were indefinitely furloughed and another 1.3 million were required to report to work without known payment dates.
  • $1.5 billion per day for 15 days of shutdown: furlough of approximately 800,000 federal employees and another 1.3 million required to report to work without known payment dates; loss in government services, travel spending, National Parks, federal and contractor wages, small businesses suffering from frozen government contracts and stalled business loans, tourism suffering from closed national parks, and military families coping without childcare and other services.
  • $2 million: almost non-stop investigations on the Benghazi attack since September 2012 requiring approximately 50 congressional hearings, briefings, and interviews with the State Department. 
  • $5.65 million: newest “special committee” to reinvestigate Benghazi—larger than budgets for the committees on Veteran’s affairs, Intelligence and the budget itself.
  • $14 million: investigation into the IRS that required over 600,000 pages of documents, “none of which substantiate the GOP’s wild attempt from the get-go to tar the administration,” according to Rep. Sander Levin (D-MI).

Grand Total:  $25,025,300,000

Debates over government funding will result in the GOP’s self-righteous objections to these so-called entitlements for the bottom 90 percent:

  • $220 billion: just over 4 million teachers–an average of $54,750 per teacher.
  • $246 billion: about $100 billion coming from state and local governments with the remainder provided by employee contributions and investment earnings—an average of $27,333 per pensioner.
  • $398 billion: non-medical safety net including SNAP (aka food stamps), WIC (Women, Infants, Children), Child Nutrition, Earned Income Tax Credit, Supplemental Security Income, Temporary Assistance for Needy Families, Education & Training, and Housing—an average of $8,600 per recipient because huge corporations refuse to pay a higher minimum wage.
  • $863 billion: Social Security. (The GOP fails to recognize that the average two-earner couple making average wages–$14,600–receives less throughout their lifetimes than they pay in.)

Then there are the entitlements for the wealthy that the GOP supports:

  • $2.2 trillion: tax expenditures, tax underpayments, tax havens, and corporate nonpayment with two thirds of the breaks going to the top 20 percent of taxpayers—an average of $200,000 per individual in the top 1 percent.
  • $5 trillion since 2009: investment income, with 95 percent—an average of $500,000—taking 95 percent of this amount.

Congressional members have an excellent reason to retain the entitlements for the wealthy: they are some of the entitled ones, helped greatly by the stock market boom. More than half the members of Congress (268) had an average net worth of $1 million or more in 2012, up from 257 members the year before. The actual number could be much greater, however, because lawmakers report their assets in sizable ranges. That’s compared to median household net worth in the United States of $56,300. The median net worth for all House members was $896,000 and, for Senators, $2.5 million. You can check out your Congressional members here.

Even without any additional income, members of Congress make over $83 per hour—if they actually worked a standard 40-hour week. That’s something to think about when they object to raising the minimum wage from $7.25 to $10.10.

Former Rep. Eric Cantor (R-VA), who lost his primary after out-spending his opponent 10-1 with $5 million, is no longer jobless. As vice chairman, managing director, and member of the board of directors at “boutique investment bank” Moelis & Co., he gets a base salary of $400,000 each year for two years plus $1.4 million in bonuses for this year and $1.6 million in incentive compensation next year, about ten times the $174,000 salary for being in the House. As Elizabeth Warren said, corporate sell-out politicians like Cantor “head straight out into the industry, not because they bring great expertise and insight, but because they’re selling access back in to their former colleagues who are still writing policy, who are still making laws.” As Jon Stewart quipped on The Daily Show, Cantor is being paid for services previously rendered.

Between 2009 and 2011—the so-called recovery—the mean net worth of households in the top 7 percent grew by 28 percent while the remaining 93 percent of households lost 4 percent. This trend continues the one for the last three decades. The following chart shows how much has been lost by the majority of people since Ronald Reagan and his conservatives shifted the economy of the United States.chart 2Workers at almost all percentiles down from the 95th saw wage declines since 2010. The only wages that went up was at the 10th percentile—an increase from $8.36 an hour to $8.38. Two pennies. That’s $.80 a week and $4.04 for the year. The extra two cents came from minimum wage increases in 13 states last year. When workers can’t afford to spend money for goods and services, businesses don’t make enough money to hire which increases unemployment. The middle class continues to shrink.

In just one state, North Carolina, CEOs in the biggest companies got a 14-percent pay increase last year, to $4.1 million. The raise means that the median CEO pay is 129 times higher than that for the workers, up from 113 times the year before. The media wage for all North Carolina workers increased 1 percent last year to$31,850. The highest CEO pay in North Carolina last year came at Lowe’s; Robert Niblock got $18.7 million, up 54 percent from the year before. Of the 50 largest publicly traded companies in North Carolina last year, two CEOs were women, two were nonwhite, and none were blacks. Nationwide, median pay for CEOs at S&P 500 companies increased 9 percent to $10.5 million.

“Why when American corporation profits have skyrocketed to over $1,800,000,000,000, why are they only investing 9% of all those profits in expansion, in wages, in research and development? Ninety-one percent goes to CEO salaries and to stockholders. What’s wrong with this picture, folks?”—Joe Biden

Free-loading corporations have joined the wealthy in obtaining government entitlements. Technically, the tax rate for corporations is 35 percent; in reality it’s much, much less. They now pay about ten percent of all taxes, compared to the 33 percent in the early 1950s. Their contribution is 1.6 percent of the GDP, drastically down from 5.9 percent in 1952.

Of the 288 companies in the Fortune 500 that registered consistent profit every year from 2008 to 2012, 26 of these companies paid no federal income tax from 2008 to 2012. Another 93 paid less than ten percent in taxes. The overall average was 19.4 percent over these five years. Tax subsidies for just these 288 companies were $364 billion during that time with $174 billion going to just 25 of the companies.  Overall, each family in the nation annually pays an average $6,000 subsidy to corporations that have doubled their profits and cut their taxes in half in ten years.

The country is divided into the “makers” and the “takers,” as Rep. Paul Ryan (R-WI) claims, but the takers are the wealthy and the corporations. And the GOP is headed back into session to take more from the workers, the “makers,” at the bottom who lose money every year.

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