Nel's New Day

March 18, 2014

Corporations, the Biggest Welfare Queens

My small town newspaper has a few regular writers, most of them conservatives. Because the newspaper publishes no more than one letter from each contributors, their diatribes pop up about every 30 days. A few weeks ago, one of the Obama-haters wrote about the Affordable Care Act combined with opposition to the proposed minimum wage. In her mind, both of these will hurt the economy because they take away jobs. Thrown into her inflammatory speech were references to entitlements, “illegal alien amnesty,” the deficit, and the U.S. printing money.

Fortunately, the newspaper also permits “viewpoints” of up to 700 words, giving respondents more space to refute such a collection of misperceptions and falsehoods. Here is my answer, also printed in the local newspaper.

To the Editor:

The arguments against the Affordable Care Act and raising the minimum wage in the March 5, 2014 News Times suffer from cherry-picking of facts and emotional language in an effort to persuade people that having health care for all is a bad idea. Here are other facts—and a few opinions–to follow up “Affordable Care Act: Who will pay for it all?”

The viewpoint’s primary concern is that taxpayers in the country will be forced to provide additional funds for the jobs “lost” through the new healthcare plan by 2024 and the proposed enactment of a federal minimum wage of $10.10.

The ACA, originally developed by the conservative Heritage Foundation, will boost the economy, according to CBO’s director Doug Elmendorf. With affordable health care, people now have more money to spend on other goods and services which then creates more jobs. The purported $70-billion wage loss came from a personal guesstimate of conservative columnist Mark A. Thiessen and not from the CBO report.

People who choose to stay home have been unfairly depicted as lazy. They may need to care for their children or sick relatives, be too sick to adequately perform job duties, want to retire a year of two early, or are looking for a few extra non-work hours. Some of these people may become entrepreneurs and pay more taxes through their businesses. Such conservatives such as Sens. Ted Cruz and John McCain have criticized the “job-lock” caused by high healthcare premiums.

The CBO reported that ACA will reduce the deficit by more than $1 trillion over 20 years and that people are paying less for ACA’s premiums than projected. Repealing the ACA would add $8 billion to the deficit, according to the CBO. This year’s deficit is on track to be only one-third of George W. Bush’s last budget. The stories about Joe Taxpayer paying more for insurance have all been debunked unless Joe wants junk insurance without hospitalization and other basic medical care or refuses to find lower premiums at a marketplace.

Low-income people are learning to use regular health care instead of getting expensive treatment at emergency rooms, another change that reduces taxpayer costs for health care. Premiums without taxpayer subsidies are also much less because insurance companies can no longer make huge profits by overcharging.

The second objection of the viewpoint was raising the minimum wage to $10.10. Even if this “loses” 500,000 jobs (which increasing the minimum wage doesn’t, according to several studies), this raise will decrease the taxpayer cost of food stamps by almost $4.6 billion per year. Oregon alone would save $26 million in just one year. As wages go up, taxpayer cost of ACA subsidies will go down. Increased wages also mean that people pay more taxes. If the minimum wage had kept up with inflation, it would be $10.74 today instead of $7.25. The wage can’t reach $10.10 for three years, even if it were approved now, meaning that it will always stay behind past minimum wages.

Without increasing the minimum wage, taxpayers continue to subsidize corporations. Just one company, Walmart, netted $17.2 billion last year as the 300 employees at just one Walmart store cost taxpayers almost $1 million in public benefit costs. Overall, low minimum wages cost taxpayers at least $243 billion a year–$770 per taxpayer.

Like roads, law enforcement, firefighters, education, and other services that I may not use, good health care is a good investment. As good citizens, we all pay for things that we oppose—in my case, trillions of dollars for wars and a bloated Pentagon budget as compared to only billions for health care.

At the same time that people demand rights granted by the U.S. Constitution, some of them try to avoid their responsibilities as citizens of the richest nation in the world. One of these is affordable health care that can stop deaths for thousands of people, sickness for another hundreds of thousands, and bankruptcy for millions more. Other countries write healthcare into their constitutions. We, too, should recognize our duty to each other as citizens of the United States.

[Seven hundred words didn’t allow for the following:]

The majority of people in the United States, including Republicans, and the majority of small business owners want the minimum wage raised to $10.10. The increase of the minimum wage in Washington state, the highest in the nation, proves that increasing the minimum doesn’t lose any jobs. And the increase in minimum wage barely causes prices to go up. A Big Mac would cost just one dime extra if the minimum wage were to be $10.50, and Wal-Mart shoppers would pay an average of $12 more a year if the minimum wage were $12. At this time, people who work at McDonalds and Walmart can’t even afford to eat and shop there.

One of the biggest welfare queens in the country is Walmart. Its minimum wage costs taxpayers one-third of the annual $243 billion necessary for public benefits. Together the six Waltons on the Forbes 400 list have a combined net worth of $148.8 billion, the same amount as a combined 42 percent of U.S. families. Most workers make less than $25,000 a year with an average wage of $8.81 an hour. That’s 12.4 percent less than retail workers as a whole and 14.5 percent less than workers in large retail.

Taxpayers provide public funds not only for Walmart’s employees’ benefits but also for its tax breaks, free land, infrastructure assistance, low-cost financing, and outright grants from state and local governments. In 2007 the cost to taxpayers was $1.2 billion; the amount has increased each year since then. Special tax loopholes such as those that permit avoidance of estate and inheritance taxes for Walmart family members cost taxpayers billions more in lost taxes, probably as much as $20 billon.

Walmart is a job killer, not a “job-creator.” For every two employees in their stores, almost three people lose their jobs as small businesses close and the corporation imports the merchandise from China.

Walmart is not the only nation’s welfare queen. A new report entitled “Subsidizing the Corporate One Percent” from Good Jobs First shows the billions of dollars in welfare payments from state and local governments to huge corporations. “Three-quarters of all the economic development dollars awarded and disclosed by state and local governments have gone to just 965 large corporations.” That’s $110 billion going to big companies with $63 billion alone to over 16,000 subsidies of firms on the Fortune 500.

At over $13 billion, the biggest welfare queen in the report is Boeing. Others are Alcoa ($5.6 billion), Intel ($3.9 billion), General Motors ($3.5 billion) and Ford Motor ($2.5 billion). Dow Chemical got 416 federal funding awards, followed by Berkshire Hathaway (310), General Motors (307), Wal-Mart Stores (261), General Electric (255), Walgreen (225), and FedEx (222). “Economic development” programs go to corporations that don’t need the money. They may bring some jobs to town, but they create more difficulty when they leave town with empty buildings.

Many people don’t know how they are getting screwed by the big corporations. It’s not the safety net that’s killing the economy: it’s the low wages and lack of universal health care that’s wiping out people. If the wealthy and big corporations were forced to pay their own way in taxes and a living wage for employees, unemployment would go down and the economy would go up.

It’s not the safety net that’s destroying the creativity and independence of the workers in the United States. It’s the takeover in all communities of the small businesses where the owners could take pride as these jobs are exchanged for rote positions at a pittance. The same huge corporations destroy the families because the members no longer work together for a better life in a family-owned business.

September 23, 2013

GOP House Saves $29 per Taxpayer to Starve Children

Filed under: Uncategorized — trp2011 @ 8:17 PM
Tags: , , ,

People should not eat if they don’t work. That’s the conservative mantra that I talked about yesterday. Welfare is bad for freedom: it takes away their independence. Where do we find welfare in the United States?

One place is in Congress, where GOP legislators give money to themselves, money that they have not earned. GOP Rep. Stephen Fincher represents Tennessee, one of the ten poorest states where the population gets $1.10 of federal funding for every $1 that they send into the government. He’s one of those who quoted Thessalonians out of context this week during a debate about food stamps: “The one who is unwilling to work shall not eat.” He also  got $3.5 million in farm subsidy welfare during the past four years.

Giant agricultural firms will receive $939 billion in welfare over the next decade if Republicans like Fincher get their way. Farm welfare recipients include 374 people on the wealthy Upper East Side of New York City and others who own farms such as Bruce Springsteen, Bon Jovi, and Ted Turner. Wealthy heir Mark Rockefeller got $342,000 in welfare to NOT farm.

Republicans in Congress get $172,000 each year, but they refuse to work. They vote over and over to defund a law that helps people and decreases the deficit and refuse to do anything about the sequester that they agree is bad for the country. According to what these GOP legislators say, they shouldn’t receive a salary.

While GOP legislators don’t do any work, each family in the United States pays an annual average $6,000 welfare subsidy to corporations. These are the same companies that doubled their profits and cut their taxes in half during the past ten years while sending 2.9 million jobs out of the country. It’s true that the poor don’t pay that much in taxes, but any household making over $72,000 pays more than $6,000 of welfare to these corporations. Here’s how you pay welfare for these corporations:

The federal government spends $100 billion on corporate welfare, an average of $870 for each one of the country’s 115 million families. The Cato Institute notes that the money includes “cash payments to farmers and research funds to high-tech companies, as well as indirect subsidies, such as funding for overseas promotion of specific U.S. products and industries…It does not include tax preferences or trade restrictions.” Welfare in the form of fossil fuel subsidies, possibly greatly underestimated, can be from $10 billion to $41 billion. This sum doesn’t count the $502 billion in fossil fuel welfare subsidies, almost $4,400 per U.S. family, from “the effects of energy consumption on global warming [and] on public health through the adverse effects on local pollution.”

Business incentives at state, county, and city levels cost each family another $696 in welfare. The $80 billion in welfare business benefits are from “virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains,” according to a New York Times investigation.

More welfare goes to banks, $722 per household. According to the Huffington Post, the “U.S. Government Essentially Gives The Banks 3 Cents Of Every Tax Dollar.” The taxpayer welfare subsidy to banks when they borrow, through bonds and customer deposits and other liabilities comes to $83 billion in welfare. The wealthiest five banks—JPMorgan, Bank of America Corp., Citigroup Inc., Wells Fargo & Co., and Goldman Sachs—get three-quarters of the total welfare subsidy.

Another $350 per household goes to welfare because of retirement accounts. Over a lifetime, bank fees can “cost a median-income two-earner family nearly $155,000 and consume nearly one-third of their investment returns.” Fees are well over one percent a year. The Economic Policy Institute notes that the average middle-quintile retirement account is $34,981. A conservative one percent annual management fee translates to about $350 per family. Many families have no retirement account, but many others pay far more than 1 percent in annual fees.

Another $1,268 welfare subsidy per household goes for overpriced medications. Monopolies provided to drug companies raise the costs of prescription drugs by almost $270 billion a year compared to the free market price. People in this country pay almost twice the average cost of Organisation for Economic Co-operation and Development (OECD) countries who pay an average of $460 per person.

Special tax provisions for corporations cost taxpayers $100 billion, $870 for each household. That welfare comes from Graduated Corporate Income, Inventory Property Sales, Research and Experimentation Tax Credit, Accelerated Depreciation, and Deferred taxes. Another guess at this welfare is $181 billion, which would be $1,600 per family.

Welfare for corporate tax havens adds another $1,026 per family. Assuming that each household has 1.2 taxpayers of the 138 million in the U.S., the total welfare costs assigned to families is $1,231.

The GOP Congressional legislators refuse to touch any of the above welfare to save taxpayers money. Instead, they voted to cut $4 billion in food stamps, which costs each taxpayer less than $29. That’s less than 2 percent of what Congress could save if they decreased the $6,000 welfare that each family provides to corporations.

Ever since Ronald Reagan’s war on food stamp recipients, conservatives have made false claims about them. Demographics show that the overwhelming majority of those who receive food stamps are white and many of them are Republicans. Mitt Romney won 213 of the 254 counties where the number of food stamp recipients doubled between 2007 and 2011.

Kentucky’s Owsley County, which gave Romney 81 percent of its votes, had the largest proportion of Romney’s food stamp communities. More than half the county’s population, 52 percent, received food stamps in just 2011, and the county is 97.6 percent white. The median household income of $19,344 is far below the national one of $52,762; four in ten of the county’s residents live below the poverty line. The county’s U.S. representative, Hal Rogers, won with 84 percent of the vote and joined the GOP majority in cutting food stamps—for more than half his constituents in this one county.

Two-thirds of the 39 legislators who represent the country’s 100 hungriest counties voted to cut food stamps. The bill passed 217-210.

Conservatives always talk about food stamps taking away people’s freedom. As Paul Krugman wrote, conservatives believe “that freedom’s just another word for not enough to eat.”

Why has this safety-net program grown so rapidly in the last five years? The 2007-2009 recession was the worst economic disaster since the Great Depression that began in 1929. The recovery has been weak because controlling Republicans supported the austerity measures that stopped economic growth. Food stamps have actually saved hundreds of thousands of jobs for people who grew and produced and transported and sold the food obtained by the government program. Every $1 in food stamps results in $1.70 added to the economy.

As I pointed out last week, only the very small percentage at the top of the nation’s food chain sees any financial improvement. The income of the top 1 percent rose 31 percent from 2009 to 2012 while the real income of the bottom 40 percent actually fell 6 percent. The food stamps, which Rep. Paul Ryan (R-WI) calls “a hammock that lulls able-bodied people to lives of dependency and complacency,” provides $4.45 a day, mostly for children, elderly and disabled, and adults with children.

In addition to cutting out corporate welfare, the U.S. could save money by eliminating a few other things:

  • The F35—Joint Strike Fighter: It costs $1.5 trillion, it hasn’t been affected by sequester cuts,–and it flies only in good weather.
  • War on Drugs: The $15 billion cost each year is about $500 per second.
  • Nuclear Arsenal: The U.S. plans to spend between $620 billion and $661 billion on nuclear weapons and related programs over the next decade. This arsenal of 7,700 weapons will never be used because they could destroy the Earth hundreds of times over. Billions could be saved by reducing the nuclear submarine fleet and land-based intercontinental ballistic missile force from 420 to 300.
  • ‘Tax Breaks for the Rich: By capping the amount that the rich can save tax-free in IRAs at $3 million would save $9 billion over ten years. Taxing hedge fund managers like nurses would save as much as $100 billion.

In studying the impact of food stamps during the 1960s and 1970s, economists Hilary Hoynes and Diane Whitmore Schanzenback found that children with early assistance became healthier and more productive adults—and less likely to need the government safety net.

Hunger results in depression, listlessness, inability to concentrate, apathy, and social withdrawal. Serious mental changes in hungry people cause impaired decision-making skills. In children, hunger delays development in reading, language, memory, and problem-solving capabilities. Children who experience hunger early on are more likely to perform poorly academically, repeat a grade, and/or require special assistance while in school. Hungry children can have a lower IQ and less developed brain than well-nourished children have.

And 217 GOP members in the House are willing to do this to children for less than $30 per year per taxpayer.

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