Nel's New Day

December 22, 2021

Fallout of Lord Manchin’s Anti-BBB Continues

The man who controls the fate of democracy and economy in the United States deserves another column. Sen. Joe Manchin (R-WY) has arrogantly stalled for months and used his personal needs to change the Build Back Better (BBB) act. He also preened about demanding bipartisanship for federal voting act to remove some of the state’s oppression before voting with all the Republicans and only one other Democrat to remove President Joe Biden’s vaccine mandate for large private businesses’ employees. Now his feelings are hurt.

During all these months, his colleagues and the people in the White House treated him with courtesy while changing and changing the parameters of BBB depending on which way Manchin’s hot air blew. Democrats finally got fed up after he said “no!” to the bill to help the nation’s people and its economy on the Fox network with no heads up to Democratic leadership and only 30 minutes warning to the White House. He pompously said, “They know the real reason what happened. They won’t tell you and I’m not going to.” He further claimed that it’s the “staff [who] put some things out that were absolutely inexcusable.”

A week ago, a conversation about Manchin’s opposition to the child tax credit was supposedly leaked. When a reporter asked about his position, Manchin called the question “bullshit.” In the midst of his whining this week, Manchin said he knew from the beginning, five months ago, that the negotiations would fail but he kept all the Democrats, including Biden, dangling at the end of his line.

Manchin also said that no one would make any concessions, despite the reduction of the bill by one half to $175 billion a year for ten years. For Manchin, Democrats shrank problems such as paid leave from 12 to four weeks and eliminated such major policies as Biden’s biggest idea to cut emissions, the Clean Electricity Performance Program. Manchin still opposes any paid leave: he claims people in West Virginia use it only to go deer hunting.

Manchin complained about a child tax credit being an “entitlement” and accused his constituents of using all the money for drugs. Parents receiving this tax credit since this spring’s American Rescue Plan have mostly used the money in these ways:    

  • 43 percent – pay down debts.
  • 20 percent – saved it.
  • 37 percent – bought food, clothing, housing, and child care.

Following Manchin’s skewed rationale, people should not receive wages. He also thinks it’s okay for people to have highly inflated stock increases—like he does—but any welfare should be highly restricted. West Virginians have noted the inequality between them and their senators; he bought a yacht for his Washington, D.C. home and drives a Maserati, costing three times the state’s annual median income. Will Bunch has this description of Lord Manchin.

A flotilla of activists to demand that he support the Build Back Better Act.

Last fall, protesters from West Virginia kayaked around Manchin’s yacht to beg for jobs, lower drug prices, climate protection, and other provisions in BBB. He assured them that the rich would pay their “fair share” and that the bill would be a success.

The latest protest to Manchin’s actions came from Josh Sword, president of the West Virginia AFL-CIO, who stated that BBB also helps the Black Lung Disability Trust Fund benefits for the state’s coal miners. Other BBB provisions are protecting collective bargaining and workers’ organizing, creating home care workers jobs, expanding senior and disabled care, and investing $4 billion in coal communities “to attract manufacturing companies that will provide good-paying, union jobs.”

The United Mine Workers also want BBB because the bill calls for alternative energy manufacturing in “coal-producing areas of the country.” Fossil fuel jobs will certainly keep declining, and BBB will give displaced workers a greater chance for replacement jobs. Since 2012, 45,000 coal mining jobs have been lost, many of them under DDT. Although Manchin has supported tax credits for equipment manufacturing in alternative energy industries, he now objects to BBB’s climate provisions such as subsidies for fossil fuel companies’ transition.

Manchin said he opposes BBB because of his made-up threats, but these are the real threats without BBB:

  • Child poverty increased by 40 percent, destroying parents’ ability to provide food, shelter, sustenance, and upward mobility necessary for the future of the United States. U.S. child poverty will continue to be the highest in the developed world, resulting in lack of health for children into their adulthood.
  • Lack of universal pre-kindergarten, making young people less likely to graduate from high school and attend college as well as making them more likely to be arrested, need welfare, and be unemployed as adults. Pre-K participants pay more taxes because they make higher wages.
  • No extended healthcare subsidies decreasing life expectancy. Infant and maternal mortality rates will continue to be far behind other developed countries.
  • Lack of childcare keeping 20 million women out of the workforce.
  • Continued high drug prices producing illness for people who cannot afford inflated costs for such medications as insulin controlling diabetes. As President Joe Biden pointed out, drug companies are selling a formula costing from $.10 to $10 to make at $560 to $650 a month, perhaps even $1,000.
  • Increased climate warming with ensuing biodiversity extinction, more erratic—and lethal—weather patterns, and rising seas.
  • A delay to the future costing higher interest rates.

Manchin depicts West Virginians as independent, undeserving of “entitlements,” but 32 percent of its residents’ personal income, higher than any other state in the nation, comes from the government—retirement, disability, medical, welfare, veterans, unemployment, education, and training.

Goldman Sachs responded to Manchin’s “No!” by predicting that his killing the BBB would shrink the GDP from three to two percent because failure to pass the bill had “negative growth implications.” The bill’s vision is pre-1981—good jobs for households and a focus on children, families, and communities.

Manchin’s requirement for any benefits is limited by absolute proof that they are needed, work requirements. The result is inaccessibility for people who need them, for example, work requirements for grandparents who care for their grandchildren to receive child tax payments. The myth that anyone looking for a job can get one is particularly false in states like West Virginia. His ideas also spend much of the money from recipients by paying for wasteful administration.

His eligibility limits to a small group of “deserving” people, according to Manchin’s standards, also are politically vulnerable. Wilbur Cohen, “father” of Social Security and Medicare, stated, “A program that is only for the poor—one that has nothing in it for the middle income and the upper income—is, in the long run, a program the American public won’t support… Programs for the poor make poor programs.”

Twp of the wealthiest men in history, Andrew Carnegie and John D. Rockefeller, believed in Social Darwinism—some people are inherently worthier than others because of “better” genes. They viewed themselves the fittest and the poor unworthy, lazy people who they had to push to improve their lives. Their perspective is representative of conservative, anti-government philosophy with a paranoia that people receiving government benefits may take advantage of their “betters.” Their solution is to make life so horrible for people in poverty that they will go to work. This was the thinking that opposed Social Security in 1935, despite the “benefit” is paid back from taxes that people on Social Security have paid. Opponents called it socialism. Others call it “entitlements” and refer to “makers” and “takers.”

As Franklin D. Roosevelt said in 1938, government has always benefits the wealthy the most:

“The first to turn to Government, the first to receive protection from Government, were not the poor and the lowly—those who had no resources other than their daily earnings—but the rich and the strong. Beginning in the nineteenth century, the United States passed protective laws designed, in the main, to give security to property owners, to industrialists, to merchants and to bankers….Because it has become increasingly difficult for individuals to build their own security single-handed, Government must now step in and help them lay the foundation stones, just as Government in the past has helped lay the foundation of business and industry.”

Wealthy companies still receive the bulk of subsidies, a type of socialism and welfare, and the Republicans gave big business and the richest people most of the tax cuts in its 2017 law.

To give Manchin a tiny bit of credit, he met on a conference call with the Democratic senatorial caucus Tuesday evening after Republicans again begged him to switch parties. Even as the majority Senate party, the GOP would still need his votes—an iffy thing with Manchin’s record of refusing to vote in favor of any bills except for blocking vaccine mandates.

At the Democratic meeting, Manchin said he still has “concerns,” but he talked. And Senate Majority Leader Chuck Schumer (D-NY) left open the possibility of an agreement although he still plans to bring BBB on a motion-to-proceed vote in the new year. Conservative billionaires and companies are still giving him massive donations to scuttle BBB, but Manchin may still be looking for a different kind of attention—such as saving the country. He already has the money.  And Christmas is coming.

June 14, 2021

GOP Helps the Wealthy Become Wealthier

Earlier this month, ProPublica broke a story about how little the wealthiest people in the U.S. pay in taxes. All but the conservatives were outraged at the inequity; conservatives are angry only about the IRS leak. The report used tax filings from the nation’s 25 richest people, including Jeff Bezos, Mark Zuckerberg, Elon Musk, and Warren Buffett. The $13.6 billion the 25 people paid in five years for taxes was compared to the growth of their wealth during the same time, called their “true tax rate.” At 3.4 percent, the percentage of the wealth growth they paid in taxes was far under the 14 percent in federal taxes paid by the median household annually earning about $70,000.

According to the tax code, people pay taxes only on income and the sale of assets such as stocks. Growing wealth isn’t taxed until assets are sold. Instead of taking salaries or selling stock, the wealthy avoid taxes by taking out loans. A 1920 Supreme Court ruling explained how the wealthy can pass along assets to a person or nonprofit foundations where the leaders can benefit from the untaxed wealth.  

About $2.7 trillion owned by wealthy people in the U.S. isn’t being taxed. The $1.1 trillion owned by the 25 billionaires equals the annual pay of 14.3 million U.S. wage earners who annually pay $143 billion on these salaries, compared to the $1.9 billion the wealthy pay in taxes. These wealthy, like Deposed Donald Trump (DDT), sometimes pay zero taxes. A multibillionaire in 2007, Amazon CEO Bezos paid no taxes that year and again in 2011 when he also received a tax credit for his children. In 2018, Tesla founder Musk, the second richest person in the world, paid no federal income taxes. Other wealthy people who paid no income tax in recent years include Michael Bloomberg, Carl Icahn, and George Soros.

Conservatives want the poor to “pay their fair share” but say nothing about the wealthy. Buffett has long called for higher income tax rates for the wealthy: he paid $23.7 million tax on his $24.3 billion increase in wealth from 2014 and 2018—0.1 percent. During the same five years, the net worth of the media household averaged an increase in net worth of $65,000, mostly from the increase of their home values, but their tax bills averaged $62,000. In 2018, the 25 billionaires reported a combined $158 million to the IRS in wages, 1.1 percent of their total incomes for the year. 

Many of the wealthy use their money to oppose legislation for non-wealthy rights. Without knowing specifics about the infrastructure bill, Charles Koch’s Americans for Prosperity (AFP) founded a multi-million dollar grassroots campaign to fight the proposed law that would create thousands of jobs. The money targets 27 U.S. House Democrats in swing districts and use social media advertising, phone calls, direct mail, and rallies in over 100 cities to denounce the plan in 38 states. The same people who use the deficit to reject the plan paid $20 million lobbying for their 2017 tax giving them billions of additional wealth. The nonprofit claims that only one-third of the people support the infrastructure plan although 71 percent of respondents want to raise taxes on corporations and the wealthy.

Oil and gas companies on the government dole benefited from subsidies, tax cuts, and government COVID assistance. CEOs of Devon Energy, ExxonMobile, and EOG Resources refused to testify at a House hearing about the industry’s subsidies, as did the president and head of government affairs of industry trade group Western Energy Alliance. The 12.5 percent royalty fee, paid for onshore leases, hasn’t increased in 100 years although the government charges 18.75 percent to offshore drillers. Fees are used for public programs, such as education, by state, local, and tribal governments. The Interior Department’s Bureau of Ocean Energy Management (BOEM) has cost the government billions of dollars by reducing or waiving offshore fees. BOEM also retroactively lowered valuations of seafloor tracts to drop bids below fair market value.

States also lost money by giving subsidies, $1 billion in the case of ExxonMobil since 1983 with almost half that sum from Texas, the company’s headquarters. Devon got $89 million in state subsidies since 2009 and EOG Resources $8.8 since 2013. The oil and gas sector also received $774 million in forgivable Paycheck Protection Program loans because of COVID. As of December 31, the Federal Reserve loaned dozens of fossil fuel companies $2.2 billion, accounting for 13 percent of the Fed’s Main Street Lending Program. Renewable energy companies received only one percent of the program’s loans. The Fed also bought $400 million worth of corporate bonds in at least 36 companies. Because of the March 2020 COVID relief bill, at least 79 oil companies, service firms, and contractors claimed almost $8 billion in tax refunds. And that’s on top of DDT’s gift of $25 billion for 17 oil and gas companies in the 2017 tax bill, $5.9 billion going to ExxonMobil. 

Another loophole in the 2017 tax law gave the oil industry $84 billion over a decade by requiring taxes from 10.5 percent to no taxes on foreign profits, encouraging offshoring of factories and jobs. The extraction exemption also allows companies to bring profits back to the U.S. without paying taxes. In addition, Congress exempted securities transactions from requirements to preserve jobs and limit dividends, leaving no restrictions on the Fed’s bond purchases. Oil and gas companies fired workers, raised executives’ salaries, and paid huge dividends to stockholders. Devon, with a $220 million tax benefit from the COVID relief bill, laid off 400 workers, 22 percent of its workforce. Its dividends increased 40 percent over 2019. Another 85 percent of oil and gas companies receiving over $100 million from the tax loophole followed suit. Twelve of the companies pay CEOs over 100 times the median salary of workers while eliminating jobs.

The American Legislative Exchange Council (ALEC), a group of global corporations and state politicians secretly gathering to create state “model” bills increasing their profits, also pushes bills to enrich the wealthy. ALEC has ranked Utah, a state with one of the worst gender pay gaps, as having the best economic outlook for the year. “Best” means low income taxes, estate taxes, and minimum wages with anti-union policies. The other three top states—Florida, Oklahoma, and Wyoming—have some of the nation’s highest gender pay gaps, poverty rates, and/or percentage of residents without health insurance.

Stephen Moore, one of the report’s authors, identified the biggest economic problem in the U.S. is declining male earnings. Women in Utah make 30 percent less than men do. The poverty rate in Oklahoma is 15 percent, and the state ranks 47th in food insecurity. ALEC listed the state as having the third best economic outlook. DDT had nominated Moore to the Federal Reserve Board, but he removed his name because the public learned his history of disparaging women in sports and the workplace.

Unconcerned about the high inequity in paying taxes, Senate Finance Committee ranking member Michael D. Crapo (R-ID) focused on investigating the leak of the tax returns, concerned that Biden’s proposal reporting more taxpayer financial information to the IRS by banks would compromise privacy.

IRS Commissioner Charles Rettig confirmed an investigation into the possibility that the revealed investigation came from the IRS. He added that having financial account information readily available could reduce and shorten audits. The process “would lessen the burden on some taxpayers by having us not audit certain taxpayers,” Rettig said. He also pointed out that the IRS has been “very successful” in protecting taxpayer data with numerous oversight systems.

The committee’s chair, Ron Wyden (D-OR), called on the IRS to investigate the disclosure but addressed the need for legislative requiring the wealthiest billionaires to pay their “fair share.” He was not specific about the legislation, but his 32-page report almost two years ago proposed taxing wealth like income for those above certain income and asset levels. It also would require taxes to be annually paid on gains from tradable assets such as stocks.

Biden’s proposed changes for the IRS includes an $80 million increase in its budget, now smaller than a decade ago with 21,000 fewer employees—a loss of 35 percent. Audit rates for millionaires dropped over 70 percent in that decade, and audits of large corporations went from almost 100 percent to under 50 percent. The agency has fewer auditors than at any time since World War II while its responsibilities have expanded into administering the Affordable Care Act and distributing stimulus checks. Biden also proposes third-party reporting and information from financial services providers for greater accuracy, increasing compliance rates to above 95 percent instead of below 50 percent. Tax compliance initiatives could raise $700 billion in over a decade although experts think the amount could be twice as much, $1.4 trillion.

The IRS projected a tax gap of $441 billion a year but said it could be over $1 trillion. Treasury Secretary Janet Yellen put the amount at over $700 billion a year if everyone paid their assigned taxes. Researchers found that the top one percent of people fail to report about one-fourth of their income to the IRS and almost twice as high for the top 0.1 percent.

Biden’s proposed investment in the IRS could bring a huge profit. Republicans who worry about leaks really want only to increase assets for the wealthy.

February 14, 2021

Biden’s Work Leads to Popularity

Republicans are still wreaking havoc from Saturday’s acquittal of Deposed Dictator Trump (DDT): instead of declaring any victory, they are damning the seven GOP senators who voted to convict DDT for inciting violence in his unrelenting attempt to overturn the election—and democracy. Sen. Bill Cassidy (R-LA) explained best the reason for votes for conviction—“he is guilty.” His op-ed in the Baton Rouge newspaper covers the facts that DDT’s cult followers refuse to recognize.

For those who question the Democrats’ wisdom in not calling witnesses after the Senate voted in favor it, another reason has emerged. Republican senators threatened to filibuster every Biden nominee, every piece of legislation, in short everything Democrats brought to the Senate. Attempting to get 60 votes for everything with only 50 Democrats in the Senate was not worth the risk. As Rep. Jamie Raskin (D-MD), lead prosecutor for the trial, said:  

‘We could have had 500 witnesses and it would have not have overcome the kinds of arguments being made by Mitch McConnell and other Republicans who were hanging their hats on the claim that it was somehow unconstitutional.”

DDT issued a statement about his victory and insinuated he could return in some fashion. President Joe Biden set the tone for the future of the United States. He stated the impeachment trial showed the charge against DDT is not in dispute and quoted House Minority Leader Mitch McConnell (R-KY), who voted to acquit but still believes DDT is guilty of a “disgraceful dereliction of duty” and “practically and morally responsible for provoking” violence at the U.S. Capitol, directly killing five people:  

“This sad chapter in our history has reminded us that democracy is fragile. That it must always be defended. That we must be ever vigilant … Each of us has a duty and responsibility as Americans, and especially as leaders, to defend the truth and to defeat the lies.”

Contrasting DDT’s life in the White House with family events of the Bidens, this video shows a casual-looking Biden couple wandering the White House lawn with their two dogs looking at the Valentines that Dr. Biden had arranged to honor the day.

Conservative pundits accused Biden of avoiding the impeachment trial by working, ignoring his busy schedule which was so different from DDT’s obsession with watching television and being admired. These are a few of his accomplishments in the past week while the media focused on impeachment.

Biden reinstated the White House Office of Faith-Based and Neighborhood Partnerships, greatly changed and unstaffed during the previous administration. Melissa Rodgers, First Amendment lawyer and senior fellow at the Brookings Institution, will head up the agency with goals including help for disadvantaged communities, advancement of global humanitarian work, and protection for “church-state separation and freedom for people of all faiths and none.”

Before the impeachment trial, nominees for secretaries of the Education Department and the Labor Department were passed out of committee with the customary few naysayers.

Biden will rescind the ability of states to mandate work requirements for Medicaid coverage. Because of DDT’s request for these rules, some states require residents work for 20 or more hours a week in jobs, job search, community service, or taking classes. Judges have already struck down some of these requirements.

Protections under the Fair Housing Act now cover LGBTQ people, allowing the government to investigate discrimination complaints based on sexual orientation or gender identity. This executive order follows an earlier one prohibiting the same discrimination in employment. Last summer, then HUD Secretary Ben Carson stripped protections for transgender people to go to federally funded homeless shelters, a policy set to go into effect in two months until Biden reversed it.

Biden said his climate-change executive order combined with “Buy American” would help create one million new jobs in the automobile industry.

The 9th Circuit Court revoked an earlier general permit from the U.S. Army Corps of Engineers’ authorizing most of commercial shellfish aquaculture in Washington’s Puget Sound seriously harming the environment.  

The government has finalized deals for another 200 million doses of COVID-19 vaccine by summer, half from Pfizer and half from Moderna, bringing the total to 300 million. 

Biden told Congress he terminated DDT’s national emergency order diverting billions of military appropriations DDT used to build part of the southern wall. DDT issued the order because Congress refused to allocate the money. Part of Biden’s direction was to divert no more taxpayer dollars to construct a border wall and review “all resources appropriated or redirected to that end.”

The president also plans to ask Congress to eliminate $40 billion in taxpayer subsidies for the oil industry. Last year, progressive lawmakers in both chambers introduced legislation to end federal subsidies and loopholes.  

Biden has “indefinitely” shelved DDT’s deal for Oracle and Walmart buying much of the Chinese-owned video app TikTok. DDT had claimed “national security” but was really upset because the young people on the app had first ordered unused tickets for his Tulsa (OK) rally and then advertised the Georgia senatorial runoff election for younger voters in favor of the Democrats.

The DOJ notified the Supreme Court it does not regard the Affordable Care Act to be unconstitutional and considers it legal as the high court considers a challenge to the law by Texas and other GOP states. California and other Democratic states are defending the law. Although the Supreme Court earlier upheld the individual mandate in the law, some justices have been replaced by DDT’s appointments.

After the February 1 military coup in Myanmar, aka Burma, Biden announced sanctions on the leaders who deposed and detained its elected leader Aung San Suu Kyi, President Win Myint, and others until it relinquishes power and releases prisoners. Biden will also freeze U.S. assets of up to $1 billion benefiting the Burmese government. Like the attempted coup at the U.S. Capitol on January 6, the coup was intended to destroy the nation’s democracy.

While the House works on the stimulus bill, Biden is working on a $2 trillion bipartisan infrastructure package to create jobs and rebuild transportation networks, both growing the economy and reducing greenhouse gas emissions. In an opening meeting, four members of the Senate Environment and Public Works Committee, two from each party, joined both Biden and VP Kamala Harris in the White House. Transportation Secretary Pete Buttigieg participated by video while he is quarantining after exposure to COVID-19. They agreed new infrastructure must be built in both urban and rural areas. More meetings with congressional members are planned. Biden pointed out China is advancing high-speed-rail projects. Sen. Shelley Capito (R-WV) called the meeting productive. Biden has said he doesn’t support increasing the gas tax, but it has had no changes for 24 years while inflation and better gas mileage has taken its purchasing power. The current federal surface transportation expires in Fall 2021.

With Ron Bloom the new chair of the postal service board, the leadership has changed although the former RNC chair, Mike Duncan, remains as a Governor. Bloom plans to “revitalize” the USPS and restore its functionality, badly needed since DDT’s choice of the Postmaster General Louis DeJoy was intended to destroy the agency before the election. Working on the automobile industry bailout over a decade ago, Bloom was a senior adviser to the Treasury Secretary. Getting rid of DeJoy may be difficult, especially because he wants to stay, because the conservative majority of the board hired DeJoy. Biden could fill the three openings on the board, but Congress would need to confirm them.

DeJoy apologized to the board for problems with delivery and promised to do better, but his vision for the future includes even deeper service cuts, more expensive postage and services, and lower delivery commitments. Already one-time delivery of non-first class mail last month dropped to 38 percent, half of the same month in the previous year. Without DeJoy, the USPS could come back, especially if Congress passes its legislation rescinding the law requiring the agency to pre-fund 75 years’ worth of retiree benefits—something no other government agency requires. This mandate is responsible for putting the USPS billions of dollars in debt giving DeJoy and the GOP leverage for their changes. Democrats have also been pushing an expansion into postal banking to both provide more revenue and give over 7 million unbanked Americans with options for checking and savings accounts, bill payments, small loans, and low-fee ATMs instead of usurious payday lenders and check-cashing businesses.

Since the election, the favorability of the GOP has seriously dropped, completely because of changes from Republicans. For the first time in eight years, the Democrats are more favorable than Republicans by double digits. In 25 states, the only ones making voter registration available, 140,000 registered voters have dropped the GOP in the first month after the January 6 attack on the U.S. Capitol. Only 20 percent of voters think the GOP idea about the stimulus bill being “too much” is right, whereas 79 percent believe the COVID-19 relief package is either “about right” or too small.

And many Republicans, such as state GOPs and several congressional members, continue to sabotage anything Biden does.

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
Tags: , , ,

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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