Nel's New Day

September 23, 2013

GOP House Saves $29 per Taxpayer to Starve Children

Filed under: Uncategorized — trp2011 @ 8:17 PM
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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.

January 2, 2013

GOP Passes Tax Cuts, Otherwise Fails

After stalling for two months, the House finally decided late last night to support the Senate version of the fiscal cliff bill one day before the end of the 112th Congress. Although the end vote was bipartisan, the Republicans were badly split: Speaker John Boehner (R-OH) and Budget Committee Chairman Paul Ryan (R-WI) voted in favor; House Majority Leader Eric Cantor (R-VA) and Majority Whip Kevin McCarthy (R- CA) opposed.

Grover Norquist can’t complain about the tax increase on the top 2 percent because it wasn’t really an increase. According to the GOP, the taxes went up on midnight of 12/31/12; the new bill lowered the taxes on the bottom 98 percent and left the top 2 percent the same. They think like children do.

Provisions of the new law:

  • Tax rates will revert to the ones in 2001 for families making over $450,000 and individuals over $400,000. All income below these amounts, basically the bottom 98 percent of the people in the United States, will permanently remain at the current level.
  • Taxes on capital gains and dividends are permanently set at 20 percent for the top 2 percent and stay at 15 percent for everyone else. [Clinton-era taxes were 20 percent for capital gains with dividends taxed as ordinary income, topping out at 39.6 percent.]
  • The estate tax is permanently 40 percent for the top 2 percent ($450,000/$400,000), indexed to inflation, with a $5 million exemption.
  • The pay freeze for Congress, lifted by President Obama this week, has been re-imposed.
  • The 2009 expansion of tax breaks for low-income Americans: the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit ($2,500 tax credit to help college students and their families pay for tuition and related expenses) will be extended for five years.
  • The Alternative Minimum Tax, which sometimes raised taxes for the middle class, has been fixed.
  • Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.
  • Extended for the coming year are the full package of temporary business tax breaks, federal unemployment insurance that benefits those unemployed for longer than 26 weeks, and avoidance of Medicare cuts to doctors.
  • A farm bill fix is good for nine months, probably keeping the price of milk the same.

After two months of wallowing in the possible disaster of the tax-cut situation, the climate of antagonism and fear will continue for the next two months.  That’s when the debt ceiling expires, and Congress has to approve its increase. The Republicans will spend most of their time claiming that raising the debt ceiling costs us money. It doesn’t. Raising the debt ceiling just allows the United States to pay their bills; it doesn’t spend any additional money.

The sequester, the across-the-board spending cuts of $110 million both domestic and military, has not been settled, just delayed for two months. And the payroll tax “holiday” has expired, raising taxes 2 percent for Social Security on the first $113,700 of wages.

Thus the GOP will rattle their sabers for two months about raising the age for Social Security, lowering the payments, and screaming about how “entitlements”—that people have already paid for—are the reason for the deficit instead of the Bush tax cuts and wars that cost the country over $4 trillion.

The fiscal cliff bill did provide bonuses to corporations in the form of subsidies.

  • NASCAR – Sec 312 extended the “seven year recovery period for motorsports entertainment complex property.” That means the tax breaks for anyone who builds a racetrack and related facilities to the tune of $43 million during the next two years.
  • Railroads – Sec. 306 provides tax credits to certain railroads, private businesses, for maintaining their tracks which costs taxpayers about $165 million a year.
  • Movies – Sec. 317 costs about $150 million for two years by providing a subsidy to Hollywood studios.
  • Mining Companies – Sec. 307 and Sec. 316 offer tax incentives for miners to buy safety equipment and train their employees on mine safety because laws can’t make companies protect their workers.
  • Goldman Sachs Headquarters – Sec. 328 extends “tax exempt financing” an extension of post-9/11 recovery funds that pretty much goes to “fancy Manhattan apartments and office towers for Goldman Sachs and Bank of America Corp,” according to Bloomberg. That paid Goldman $1.6 billion in tax-free financing for its new headquarters through Liberty Bonds.
  • Off-shore Loophole for banks – Sec. 322 allows American corporations such as banks and manufacturers to avoid taxes on certain lending practices. Those benefiting from the $9 billion include GE, Caterpillar, and JP Morgan.
  • Foreign Subsidiaries – Sec. 323 extends the “Look-through treatment of payments between related CFCs under foreign personal holding company income rules.” This provision cost $1.5 billion from 2010 and 2011 and allows U.S. multinationals to not pay taxes on income earned by companies they own abroad.
  • Bonus Depreciation, R&D Tax Credit was projected to cost $8 billion for 2010 and 2011, and the depreciation provisions were projected to cost about $110 billion for those two years, with some of that made up in later years.

The Joint Committee on Taxation in 2010 did an analysis of what many of these extenders cost, more than the over $100 billion per year listed above.

While the Republicans were stalling on the fiscal cliff bill, they refused to address the issue of the money needed after Superstorm Sandy. After the House adjourned on Tuesday night without passing the $60.4 billion Sandy relief package that the Senate approved last week, many GOP members affected by the storm became livid. Rep. Peter King (R-NY) told people in New York and New Jersey to not donate one cent to congressional Republicans.

Boehner felt so threatened that he promised to address the bill on Friday. That’s after the 112th Congress ends, meaning that both House and Senate have to restart the entire legislative process. Chris Christie, New Jersey governor, used much stronger language when he charged that the GOP put politics “before our oaths to serve our citizens”:

 “Our people were played last night as a pawn. Last night, the House of Representatives failed that most basic test of public service and they did so with callous indifference to the suffering of the people of my state. There is only one group to blame for the continued suffering of these innocent victims: the House majority and their Speaker John Boehner. [Historically] disaster relief was something that you didn’t play games with, but now in this current atmosphere everything is a subject of one-upmanship. It is why the American people hate Congress.”

Christie finished by emphatically saying, “Shame on you, shame on Congress.”

Boehner may back down on the Sandy relief bill, but it appears that after 18 years, the Violence against Women Act is gone.  Sen. Patty Murray (D-WA), the Democratic point person on VAWA, said:

“The House Republican leadership’s failure to take up and pass the Senate’s bipartisan and inclusive VAWA bill is inexcusable. This is a bill that passed with 68 votes in the Senate and that extends the bill’s protections to 30 million more women. But this seems to be how House Republican leadership operates. No matter how broad the bipartisan support, no matter who gets hurt in the process, the politics of the right wing of their party always comes first.”

If proponents succeed in reviving the bill in the 113th Congress, there will still be far fewer resources available for state and local governments to combat domestic violence until they succeed. The original VAWA was drafted in the office of then-Sen. Joe Biden (D-DE) in 1994; maybe the vice-president can resurrect his creation.

At this time, no one knows if Boehner will even continue as Speaker of the House. Conservatives claim that they have enough votes to oust him. Again, they are behaving like children. No one has come out for Boehner’s job because they are afraid, and no one will try a coup if they aren’t 100 percent positive that they will succeed. Boehner has already taken retribution against his opposition, and he’ll continue to do that.

So Boehner stays, the House GOP will cause Congress to be the same failure for the next two years, and the bottom 98 percent won’t have to pay more taxes.

December 1, 2012

U.S. Needs to Solve Disconnect between Money, Humanity

Filed under: Uncategorized — trp2011 @ 3:14 PM
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Thanks to reader Pat Brown for the following blog. If anyone is interested in writing a blog for Nel’s New Day, leave me a comment.

Capitalism and making money have always been the driving forces behind the creation of the United States of America. But when money becomes the only goal and there is no humanity involved, then there’s a terrible disconnect. When providing employees with a truly livable wage becomes anti-business or socialist, then I have to ask, where did the America of our forefathers go​?

Henry Ford is often considered the father of modern industry with his introduction of the assembly line. His success has been held up as an example of what America could do that no one else in the world had been able to accomplish. He paid his workers an above-average wage. Even if his motive was to give them the money to buy one of his cars, it still triggered the beginning of America’s middle class that built this country.

Now all the progress is being undermined by rapacious greed where the workers at the core of every business are driven into bankruptcy. We see the world’s largest retail company paying its employees less than they require to even maintain a simple life style, let alone be able to dream of a future. That same company teaches employees how to apply for food stamps, in essence, making the American taxpayer subsidize its unimaginable wealth and give but a minuscule amount back.

Is it financial genius to figure out how to use the American taxpayer to feed and take care of its employees, so the company doesn’t have to? This is, in effect, another government subsidy that no one ever talks about.

The question was raised during the campaign about who built what. Romney claimed it was only the entrepreneurs who risked their money to become successful. Did they, really? Travel back a hundred and fifty years. Between the 1850s and 1860s, the federal government granted a series of subsidies to express companies, stagecoach lines, telegraph corporations, and railroads. Federal money gave the country an economic bootstrap to promote the expansion of the vast territories west of the Mississippi and bring its wealth into the new federation.

Contracts were awarded for mail service to California. Before the Panama Canal, this meant mail was first carried to the Isthmus of Panama, lugged overland, and sailed to San Francisco. It was slow and very expensive. Pressure was levied on the government to fix this—no wealthy businessman or company fronted money to do it. There was no question of anyone being asked to. The people wanted, and expected, the federal government to build and pay for all the infrastructure that would allow them go forth and conquer.

In 1856 a petition, signed by 75,000 Californians, demanded a route to the South pass. This angered the South, which thought it gave the North an unfair advantage. The end result was a proposal to improve two roads, one from Ft. Kearney through the South pass to California and another from El Paso to Ft. Yuma.

Once trails had been picked, an annual subsidy of $600,000 was given to John Butterfield and William Fargo to devise a route that would offer a mail service on a weekly or semi-weekly basis.

Government subsidies and grants made this country what it is today. People were willing to take incredible chances to have a better life. When they did it, they worked with their neighbors. The essence of humanity is to work together to create a safe world. We’ve lost that in our relentless pursuit of wealth. Employees have become nothing but cogs in a machine, to be replaced by cheaper ones when they wear out.

At the height of America’s boom, unions were strong, and wages were good. A family knew they could buy a home, a car, raise kids and know they could take care of them. Now, there’s no sense of we’re all Americans and we’re all in this together.

Is destroying the country to amass more money really a good business decision? I would hate to think that we are so morally bankrupt to say yes.

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