Nel's New Day

January 13, 2015

GOP’s Return of ‘Voodoo Economics’

With Mitch McConnell the new Majority Leader in the Senate, House Speaker John Boehner (R-OH) is working overtime to prove that he can lead his congressional chamber into something other than gridlock. The first House vote was to change House rules, two important of them economically vital, with a majority of 234-172. All Democrats opposed the new rules, and only four Republicans voted nay with a couple of others voting present or no vote.

The first one will use Republican math in determining the costs of proposed measures. In publishing the cost, called a “score,” the Congressional Budget Office uses verifiable data to show what a proposal will cost, how it affects the deficit and revenues, how it shifts unemployment, etc. Republicans don’t like this method because it shows that tax cuts for the wealthy increases the deficit. To hide this information, they have changed the system to “dynamic scoring.” Using this system, they can claim that a bill costs less instead of more by using the myth that tax cuts for the wealthy will produce greater economic growth—perhaps even taking the cost of a bill down to $0. The change lets the GOP hide the fact that their legislation is actually increasing federal deficits, not lowering them.

Although infrastructure investment might even have this positive result, the rule also states that “the measure would not apply to economic stimulus bills favored by Democrats.”

The change doesn’t ask for more information; it only lets legislators use an unsubstantiated guess as a rationale for cutting tax rates more deeply or curbing tax breaks less substantially (or both) without showing that changes are adding to deficits and possibly violating key budget rules. If guesses don’t pan out, the increased deficits will drag down any possible economic growth. Congressional budget rules prohibit budget reconciliation bills from increasing deficits in future decades, a requirement that dynamic scoring could circumvent.

The GOP Senate will most likely follow the House’s example. It’s an extension of the way that George W. Bush didn’t put war costs into the budget, allowing him to drive the deficit sky high. Republicans have maintained in the past that government should be run like a business. This isn’t the way that businesses maintain their profit and loss projections. In fact, this kind of “cooking the books” is considered fraudulent—for businesses but not government.

“Dynamic scoring” is related to “voodoo economics,” that faulty belief of “trickle-down” economics that posits greater wealth at the top will move down to the poor. Former Secretary of Labor and professor of public policy at UC Berkeley Robert Reich explained the process:

“Dynamic scoring is the magical-mystery math Republicans have been pushing since they came up with supply-side “trickle-down” economics. It’s based on the belief that cutting taxes unleashes economic growth and thereby produces additional government revenue. Supposedly the added revenue more than makes up for what’s lost when Congress hands out the tax cuts.

“Dynamic scoring would make it easier to enact tax cuts for the wealthy and corporations, because the tax cuts wouldn’t look as if they increased the budget deficit. […]

“Few economic theories have been as thoroughly tested in the real world as supply-side economics, and so notoriously failed.”

Saying that he will fight the same rule change in the Senate, Sen. Bernie Sanders (I-VT) explained:

“What history shows is that when you give tax breaks to the rich and large corporations, the rich get richer, corporate profits climb and the federal deficit soars. In these difficult times, we need realistic economic projections, not discredited theories, not voodoo economics.”

Kansas is a prime example of the destruction that massive tax cuts, such as the ones made possible in the federal government with new “dynamic scoring,” brings to a jurisdiction. The state brought in $23 million in tax revenue in October less than predicted, following a similar shortfall for the previous month. Revenues came in over $300 million less than projections for 2014.

Kansas was ordered to increase its school funding by hundreds of millions of dollars because the education spending plan violated the state constitution. Legislators merely took money from underfunded schools and gave it to more extremely underfunded schools. With most states digging out of their financial crises, higher tax revenues have increased spending on education, but no so in Kansas. The student population has gone up by 19,000 since 2009, and the number of teachers in the state has gone down by 665. In the same time, the average district will spend $41,500 less for teacher training this coming year.

These disasters come after Sam Brownback (R) was first elected as governor in 2010. The elimination of taxes on a specific category of business income greatly benefited large businesses, and his tax cuts benefited wealthy Kansans far more than middle-income taxpayers while raising taxes for the poorest people. Job creation in Kansas is also much slower than neighboring states and the United States.

George W. Bush’s dramatic tax cuts on income and investment gains for the wealthiest people in 2003 give a very graphic example of the difference among former CBO projections, dynamic scoring, and reality. The conservative Heritage Foundation tried to show that budget surpluses would quickly return despite tax cuts. The graph shows how accurate their predictions were.

graphAnother new rule is that any representative can raise a point of order if the House tries to pass a bill redirecting funds between Social Security funds, a change that can affect the Social Security’s disability program. Because of aging baby boomers, there is a projection that this trust fund will be empty by late 2016. After that, payroll taxes will cover only 81 percent of the benefits. As it has done 11 times in the past, Congress could use payroll taxes from Social Security’s much larger retirement fund. The  new rule blocks such a move unless it improves Social Security’s finances, by either cutting benefits or raising taxes.

For the past several years, the CBO reports have not been friendly to Republican positions. Conservatives are angry because the CBO shows the cost-saving measures of the ACA and the fact that the Bush era tax cuts did not stimulate the economy. For that reason, the GOP wants to eliminate the use of facts in determining the effects of fiscal bills.

In all probability, the Senate GOP majority does not plan to reappoint the current CBO Director. Doug Elmendorf has a history with the CBO beginning in the mid-1990s and was first appointed as director in January 2009. He has maintained the nonpartisan tradition of analyses and has been commended by both Republicans and Democrats. He has also long been opposed to using dynamic scoring.

Michael Hiltzik of the LA Times was one of those who saw the writing on the wall for Elmendorf after the election of GOP majorities in Congress:

“The shame of the GOP’s dumping Elmendorf as the CBO’s director is that it signals the end of the CBO’s role as a sober analyst of policy and legislation. Over the years, its analyses have sometimes angered Democrats, sometimes Republicans; sober analysis is essentially nonpartisan. CBO estimates haven’t been immune from criticism by analysts outside Congress, either. But no one has claimed that its analyses aren’t well grounded or that it doesn’t arrive at its conclusions honestly. That may be about to change.”

That change is just a small part of the way that the GOP will try to continue the movement of politics to the right.

October 13, 2013

Day Thirteen of the GOP Government Shutdown: No Movement, GOP in Fantasyland

With the GOP holding the country hostage, one person is in control—Rep. Eric Cantor (R-VA). Late September 30, the House Rules Committee changed the standing House rules. Normally any member trying to address a disagreement between the House and the Senate would have the “privilege” to make a motion to bring the Senate bill to the floor of the House. The rules change just before the actual shutdown applies only to the CR keeping the government running.  that could keep the functioning of the federal government.

New rule: any motion to take up the Senate bill “may be offered only by the majority Leader or his designee.” That designee is Cantor, making him the only person in the 532 people currently serving in Congress who can break the deadlock. “I’ve never heard of anything like that before,” Norm Ornstein, resident scholar at the American Enterprise Institute, said.

The rules change may have led to an heated exchange on the House floor between Rep. Joseph Crowley (D-NY) and Cantor’s floor director, Chris Vieson, after Democrats made requests for a vote for a clean CR. To avoid media attention—and make sure that members got their flights home—Vieson yelled that they were shutting down the debate and pulling the bill. Crowley asked Vieson if a staffer was shutting down democracy, and Vieson said, “That’s right.” Crowley told him that he was behaving in an inappropriate way. Cantor’s spokesman said that Crowley poked Vieson with an index finger; Crowley denied doing it. 

Rep. James E. Clyburn (D-SC) said, “This is what happens in the public process when we stymie opposition, when we cut off debate, and when we continue to tilt on disaster by manufactured crises. It is time for us to reopen the government.” House members did manage to escape on Friday, planning to return tomorrow.

At this time, there is no movement toward opening the government, and Cantor and GOP members of Congress claim that there would not no problem if the debt ceiling is not raised in less than 72 hours. Reasonable people are horrified by their lack of concern. Why aren’t they afraid of what Businessweek, called “a financial apocalypse” that would cause a worldwide economic depression? 

Most of the Tea Party base, especially the leadership, are fundamentalist Christians whose religion controls their worldview. This is not a secularist movement interested primarily in promoting “fiscal conservatism.” Tea Partiers are people guided by magical thinking and belief. Pew Research shows that Tea Party members are likely to cite religious belief as the prime motivation for their political views. This latest power play from the GOP is simply a repetition of white fundamentalists to assert their “right” to control the country even if their politicians aren’t in power.

A movement controlled by fundamentalist Christians ignores any real dangers that their actions cause. Fundamentalist religion convinces followers to be more afraid of imaginary threats than real ones. People who believe that the Lord’s work is forcing the government into default in an attempt to eliminate Obamacare cannot see the real, negative effects of their beliefs. They simply continue to believe that the president is an agent of the devil and the world will devolve into mayhem and apocalypse if he is not stopped. 

With no reason, Christian conservatives such as Ellis Washington are convincing people that the ACA  will lead to “the systematic genocide of the weak, minorities, enfeebled, the elderly and political enemies of the God-state.” Twenty percent of Republicans believe Obama is the Antichrist.  Washington Times columnist Jeffrey Kuhner argued that President Obama is using health care legislation to promote “the destruction of the family, Christian culture” and demanded that Christians “engage in peaceful civil disobedience against President Obama’s signature health care law.” 

The U.S. Conference of Catholic Bishops joined the evangelicals with their demand that the GOP shut down the government rather than let Obamacare go into effect. The excuse was their objection to the requirement that insurance make contraception available without a copayment, saying ending this requirement matters more than “serving their own employees or the neediest Americans.”

Pat Necerato of the Christian News Network accused the supporters of the law of committing idolatry and accused people who want health care of being covetous. The Christian Post approvingly reported various Christian leaders, including Tony Perkins of the Family Research Council, saying things like the health care law is “a profound attack on our liberties” and repeating “today is the day I will tell my grandchildren about when they ask me what happened to freedom in America.”

Rick Phillips, writing for Christianity.com, hinted that Obamacare might be predicted in Revelations, resulting in the End Times. Others went beyond hinting by falsely proclaiming a conspiracy theory of Obamacare requiring microchips planted in all citizens, the “mark of the beast” predicted in Revelations that portends the return of Christ and the end of the world. 

To people who believe in fire and brimstone, worldwide economic depression is no problem. Fundamentalist Christians minimize the problems of the real world while inventing imaginary ones. To these deniers, climate change doesn’t exist because they are more worried about abortion and LGBT rights. 

The far-right have become obsessed with the End Times; one-third of people in the U.S. believes that the Syrian conflict portends the end of the world. Rep. Michele Bachmann (R-MN) claimed this is true because President Obama is intentionally sending arms to terrorists which tells her that“the leaf is on the fig tree.” 

Even more horrifying than her mythical approach to politics, however, is her delight in a worldwide war that would kill millions. “Rather than seeing this as a negative, we need to rejoice, Maranatha Come Lord Jesus, His day is at hand,” Bachmann claimed. And most horrifying is that she has access to the nation’s most sensitive and highly classified materials because of her membership on the House Intelligence Committee. 

Three-fourths of the evangelicals who foresee God’s mass murder and hellfire believe they will escape any difficulties because the Rapture will whisk them off to a heaven before anything bad happens. This 19th-century invention took off in the late 20th century after pop culture products like the Left Behind series. The world’s end is also important to evangelicals because it proves they are right—they will have won the argument. There’s nothing like a fiery apocalypse to let people say, “I told you so!” That way they would see the non-believers punished and evangelicals would be instated as the rightful rules of all humanity.

Even Senate Chaplain Barry Black is fed up with Congressional stupidity. His opening prayers for Senate sessions have demonstrated increasing frustration. By today, he said in a Fox network interview that there’s a level of “insanity”  in the current government shutdown and ending the impasse will “take humility.”

When the shutdown seemed eminent, Black prayed, “Lord, deliver us from governing by crisis, empowering us to be responsible stewards of your bounty. May they remember that all that is necessary for unintended catastrophic consequences is for good people to do nothing.” Early in the shutdown, he said, “Unless you empower our lawmakers, they can comprehend their duty but not perform it.” On Day Two, he continued, “Save us from the madness.” 

By the fourth day of the shutdown, Black became even more direct: “Remove from them that stubborn pride. Forgive them for the blunders they have committed… the collateral damage of this government shutdown, transforming negatives into positives as you work for the good of those who love you.” He also said, “Deliver us from the hypocrisy of attempting to sound reasonable while being unreasonable.” 

On Day Nine with the delay of benefits for military families, Black said, “Lord, when our federal shutdown delays payments of death benefits to the families of children dying on far-away battlefields, it’s time for our lawmakers to say enough is enough. Cover our shame with the robe of your righteousness.” By Day Eleven, Black called on the Lord to “give our lawmakers the wisdom to distinguish between truth and error. Give them a hatred of all hypocrisy, deceit and shame as they seek to replace them with gentleness, patience and truth.”

The looming disaster is caused by a small cabal of hard-right legislators and back-benchers pushing the entire GOP into a radically extremist position regarding the Affordable Care Act and other laws. Take a look at this interactive description of 20 people behind the conservative groups with the ability to make the lives of Republicans who seek compromise very, very difficult. 

It’s Sunday night. Black will return to pray tomorrow, and members of Congress are still being paid despite the government shutdown. 

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