Republicans' True Colors

Republicans say they care about creating jobs and bringing the federal budget into balance.  Simple facts demonstrate that their true agenda is focused on increasing the wealth of the richest Americans, above all else.

It was the last Republican president who saddled us with $2.5 trillion of budget-busting costs with his irresponsible tax cuts passed in 2001 and 2003. Those cuts brought tax rates to their lowest levels in decades.  Nearly half of the cuts have gone to the richest five percent of taxpayers.  If tax cuts for the rich are the way to stimulate job growth, as forcefully advocated by Mitt Romney, why did Bush’s eight year reign produce the worst record of job growth of any president in the last 80 years? 

In fact, according to Bureau of Labor Statistics data, he is the only president since Herbert Hoover responsible for a loss in jobs during the budget cycles for which he was responsible.  In contrast, President Obama has created 3.4 million jobs since his first budget went into effect.

The explanation is simple.  Jobs are created by consumer spending, which accounts for 70 percent of economic activity.  The way to boost spending, and job growth, is to increase the purchasing power of those who need the extra cash the most and will spend it.   Through tax policy, this can be accomplished with extended unemployment benefits, payroll tax cuts, earned income tax credits and continuation of income tax cuts for the middle class, precisely what President Obama has proposed, but which Republicans have stood in the way of passing. 

Yet Mitt Romney, Paul Ryan and Congressional Republicans insist on extending tax cuts for the richest two percent of taxpayers, at a ten-year cost of $1 trillion.  And showing their true colors, they oppose extending the earned income and child tax credits , which would put more cash in the hands of working Americans struggling to get by.  Apparently the no-tax-increase pledge signed by Romney and virtually every Congressional Republican applies to the rich, but not the poor.

This election poses stark differences in values and desired outcomes.  The Democratic vision for prosperity embodied by Jim Himes, running for re-election in the 4^th Congressional District, and Chris Murphy, running for U.S. Senate, emphasizes shared sacrifice, fairness and fact-based policy to boost economic growth and security for all Americans.  Republican policy, in contrast, will continue to favor the very affluent, without regard to the impact on tens of millions of middle and lower income Americans.

Why not raise taxes on the least affluent Americans?

I have to give Eric Cantor credit for finally being honest about the Republican desire to fund tax cuts for the wealthy from the pockets of the middle class.  This came to my attention from the informative Citizens for Tax Justice, which reported on Cantor's moment of tax transparency. That was grist for my latest piece on the deceit of the Republican agenda.

Eric Cantor, the Republican House majority leader, signed Grover Norquist's "no tax pledge.” But apparently his pledge doesn’t apply to the 45 percent of workers who make so little money that they don't owe federal personal income taxes. At a private event hosted by Bank of America, Cantor said we “have to discuss the issue” of increasing personal income tax rates for these workers so that he can lower tax rates for everybody else.  The rationale: to get the economy growing again.

Cantor’s appeal continues the Republican opposition to tax relief for the middle class, despite their vigorous opposition to raising taxes on the wealthiest Americans. As these actions demonstrate, the agenda embraced by the Republican Party and fully supported by Mitt Romney is misguided and deceitful.

Cantor's remarks can only be interpreted as suggesting that the rich are over-taxed and the middle class is under-taxed. In fact, data compiled by the nonpartisan Institute on Taxation and Economic Policy shows that when all taxes are taken into account, our tax system is barely progressive. In 2011, the share of taxes paid by the top one percent (21.6%) matched their share of the country's income (21.0%).   The top one percent paid 29% of their income to taxes; the rest paid nearly the same amount, 27.5%.

Not only do the wealthy not pay higher average tax rates than others, but taxes for them are at the lowest levels in more than 50 years, thanks to Republican policies that have dramatically lowered rates on the highest income brackets, and preferentially treated investment income that goes mostly to the wealthy.

Republicans want us to believe that lowering taxes for the rich will trickle down and help the middle class. It's not true. Over the past three decades, per capita income has grown no faster in the U.S., where top tax rates were cut substantially, than in European countries that did not cut their top rates.  Long ago, President George Bush called supply-side economic theory for what it is, “voodoo economics.”

What is true is that the Republican tax agenda has benefitted the wealthy enormously.  The Congressional Budget Office reported that from 1979 to 2007, household income for the top one percent rose 275 percent, while for bottom fifth of households, it increased just 18 percent.  As the middle class struggles with the aftermath of the Bush-era Great Recession, most of the gains are going to the ultra-wealthy. As the economy recovered in 2010, nine out of every ten dollars of additional income versus 2009 went to the top one percent. That equated to a 12% increase in income for those fortunate few, while the bottom 99 percent gained, on average, just an extra $80!

That hasn’t stopped Republicans from pushing policies, cloaked as job building, that help the wealthy even more. The House Republican leadership has introduced The Small Business Tax Cut Act, which lets most small businesses (those with less than 500 employees, hardly the definition of small) deduct up to 20 percent of their income in 2012, a $46 billion expense to taxpayers. According to the independent Tax Policy Center, nearly half of the cuts will go to people making more than $1 million. What's worse, it will do little to create jobs.  The economic impact is “so little as to be incalculable,” according to the official analysis by the Congressional Joint Tax Committee.  More reason not to believe Republicans and Romney when they talk about the wisdom of their policies for lowering the deficit and growing the economy.

Companies don't have to hire new workers to receive the credit, one of the reasons that an analysis by the Congressional Budget Office ranked business income tax cuts as the second-most expensive way to create jobs among those evaluated.  It isn't taxes (or regulation) that are keeping businesses from growing.  Rather, it is lack of demand, as reported in a survey conducted last fall by the National Federation of Independent Businesses.

What's the most tax-efficient way to create job growth?  According to the CBO, it is payroll tax cuts and unemployment insurance that put money into the hands of those who need it most, and will stimulate the economy by spending it.  Precisely the two middle class-friendly policies that Republicans have stood in the way of since President Obama took office. 

Rhetoric aside, the facts are clear:  the Republican agenda is about making the wealthy richer, not putting Americans back to work. On this point, Eric Cantor is clear: “I've never believed that you raise taxes on those who have been successful.”

I got shouted out by Mr. Arthur Clarke in Greenwich Time and Stamford Advocate for my recent letter to the editor wherein I made the case that President Obama is not a "radical socialist" (see my Feb 28th post, below). (No, not the Sir Arthur C. Clarke, he's passed on.)

His counterattack, entitled by the paper's editor "President Obama is indeed far left" put me to work once again. This is a longer version of what was published as my rebuttal.

Thanks to Arthur Clarke for clarifying the difference between Democrats and Republicans (“President Obama is indeed far left,” Opinion Mar. 15). His interpretation of facts puts into stark terms the Republican vision, which leads down a very different path than where Democrats are going.

The Republican vision favors those who have succeeded over those who have not, sides with private enterprise at the expense of the individual, imposes a narrow faction’s religious beliefs on others, and pursues profit without regard to consequences. Listening to their current narrative, it is clear that Republicans have a visceral hatred of government, believing that anything it does is devised to take what’s mine, or keep me from doing what I should be allowed.

By contrast, Democrats subscribe to a vision that sees a positive role for government—to provide incentives for socially useful activity (education, safety, national infrastructure), sensible regulation to protect us from the harm of unchecked private enterprise (BP oil spill, subprime lending), safety net programs to help those who are less advantaged (social security, Medicare, unemployment insurance).

Democrats also believe that government should actively step in and help Americans when the market fails, such as the Obama administration did to save the U.S. economy from the worst economic crisis since the Great Depression.

Beyond the difference in Democratic and Republican values, Mr. Clarke brings to light three observations, which should lead voters to take stock of their choices this November. First, the inconsistency of what Republicans say versus what they do. Second, their use of facts to mislead and divert attention from real issues. And third, their dishonesty.

Let’s start with the third, because it is the most serious charge. Mr. Clarke states that President Obama “gave $2 billion to Brazil to drill off their shores.” The U.S. did not give Brazil $2 billion. The U.S. Export-Import Bank, whose charter is to assist in the financing of U.S. exports, made a commitment in 2009 to help finance Petrobras because that would lead to the purchase of U.S. goods and services, creating jobs in the U.S. The Ex-Im Bank does not use taxpayer money. According to its chairman, Fred Hochberg, the Ex-Im Bank has returned nearly $5 billion to American taxpayers from fees it has collected. I’m not sure if Mr. Clarke considers Mr. Hochberg to be one of the “43 czars all with radical left-wing ideologies” (he was appointed by President Obama). But Forbes Magazine described Hochberg as “one of the great success stories of American entrepreneurship.”

Using facts to distort and mislead? Twice Mr. Clarke states that gas prices have doubled since Mr. Obama took office. The price of gas is set by worldwide market conditions and geo-political factors, not the U.S. President. But for what it’s worth, the price of gas more than doubled from the time President Bush took office to its peak in the summer of 2008. It was so low when Obama took office because the global economy was in shambles and demand low. It is higher now because some economies, including ours, are recovering. Also because of Obama-led sanctions on Iran to pressure it to abandon their pursuit of nuclear weapons, a goal that Republicans support.

Here’s another inconvenient fact for Republicans who say that Obama is destroying domestic oil production: it dropped every year during Bush’s administration, down 15% from 2001 to 2008. Under Obama, it is up 11%.

The Republican storyline is particularly distorted with regard to the economic crisis inherited by Obama from his Republican predecessor. First, it was a crisis: the contraction of the U.S. economy during 2008 was the worst in half a century. More than 5 million jobs had been lost. But, in the words of John Boehner, Obama’s policies “have made our economic woes worse.” The overwhelming majority of experts disagree. The Booth School of Business at the University of Chicago (hardly a leftist institution) recently polled economists from across the political spectrum and found widespread agreement that Obama’s stimulus package is working. Eight out of 10 said it has lowered unemployment. Four times as many agreed as disagreed that stimulus program produced net benefits. While there is much work to be done, freely admitted by President Obama, the economy has recovered to its peak size in 2007.

More distortion aimed at obfuscation? Mr. Clarke reports, accurately, that nearly half of tax filers don’t owe federal income tax (he didn’t say that 80% of them do pay federal taxes). He apparently believes that the wealthy are suffering at the expense of the middle class: “tax cuts for the rich are political hyperbole.” In doing so, he demonstrates Republican’s utter disregard for the less advantaged. Who are all those people not paying federal income tax? In 2009 four out of five of them had adjusted gross income of less than $30,000. It seems Mr. Clarke believes they are less deserving of tax breaks than the top 1% whose income, according to the nonpartisan Congressional Budget Office, has increased more than ten times faster than the bottom 20% over the past three decades. If you want to continue the trend where the rich get richer at the expense of everybody else, vote Republican.

Finally, on to the topic of healthcare, where Republicans’ true colors really shine. Plain and simple, they are hypocrites. Romney and Gingrich are vociferous in their opposition to Obama’s healthcare reforms, especially the individual mandate that requires everybody to carry insurance to avoid the economic costs of free-loading.

But in 2009 Romney wrote in USA Today that he was “proud to be the first governor to insure all his state’s citizens.” How did he do it? He established an individual mandate by using government “tax penalties” levied against those who didn’t carry insurance which got “free-riders” to take responsibility. Gingrich, in a 2009 conference call to healthcare executives, said “We believe there should be must-carry; that is, everybody should have health insurance…”

Mr. Clarke is right to assert that we must bring down the costs of Medicare. But he scoffs at the fact that Medicare is more efficient in delivering care than private insurance. As reported by Paul Krugman, a Nobel laureate, it’s an inconvenient truth for Republicans that while Medicare spending per beneficiary has increased more than 400% over the past forty years, private health insurance premiums have increased more than 700%. Or that private insurance via Medicare Advantage costs taxpayers more than traditional Medicare. Or that the US has the most privatized system in the world, and the most expensive, but doesn’t deliver better health outcomes than the “socialist” alternatives.

Assign whatever label you want, but I believe Democrats have a better vision and track record for national prosperity than do Republicans, not to mention more integrity.

Obama not a "radical socialist"

At the risk of making some of President Obama's decisions look unwise, I think it is critically important to show that he is not the radical that the Republican nominees say he is. Thus my latest "letter to the editor."

I’m not a Republican, yet I found much to agree with in “lifelong Republican” Carla Wallach’s opinion piece, Calling all moderate Republicans: Where are you? (Greenwich Time, February 23, 2012). Agreed with her, that is, until the end where she equated Republicans’ shift to the extreme right with President Obama’s shift “far to the left.”

No analysis of Obama’s presidency would put him anywhere other than as a moderate Democrat. He extended Bush’s tax cuts for the wealthy, a key contributor to current fiscal problems. He was willing to cut trillions from federal safety net programs, only to be rebuffed by the Republican leadership who want to preserve tax breaks for the wealthiest. He presented a plan to fully fund the extension of the payroll tax cut, a much more fiscally conservative approach than Republicans’ budget-busting unfunded tax cuts.

On health care reform, Obama never even considered a single payer model, and compromised with Republicans by taking the public option off the table, despite ample evidence that the government run, single payer program—Medicare—operates far more efficiently than privately run programs. He made a grand bargain with the insurance industry to pass health care reform, to the dismay of many Democrats.

Obama has expanded offshore drilling (with improved oversight), and in his State of the Union address, pledged support for shale gas drilling, anathema to environmentalists. Cap and trade, which he supports, is a market-based solution to pollution control that avoids government regulation. Twenty years ago it was sponsored by President Bush and voted for by Mitch McConnell and Newt Gringrich.

On matters of military policy, Obama escalated the war in Afghanistan and substantially increase drone strikes in Pakistan. He reneged on his pledge to shut Guantanamo Bay and resumed military trials, despite the infractions of constitutional protections brought to light during the Bush administration.

Empirical analysis reinforces the moderate policies of President Obama. Political scientist Keith Poole uses presidential policy positions to document that Obama is the most moderate Democratic president since World War II. Far from the “radical socialist” that GOP candidates accuse him of being.

Republican Storyline: Fact or Fiction?

I've been on the sidelines too long. We must elevate the national discourse. Here's my attempt, my latest letter to the editor.

Our country faces substantial challenges. While there will always be differences about the policies needed to surmount them, we can only achieve success through an honest debate based on accurate representation of facts. Sadly, truth is in short supply in the Republican Party.

Mitt Romney says that more jobs have been lost during President Obama’s tenure than any president since Hoover. Newt Gingrich accuses Obama of being the “food stamp president.” Both candidates ignore the fact that Obama inherited an economy in worse condition than any time since the Depression. It is dishonest to hold Obama accountable for the 3 million jobs lost during the first six months of his administration, the disastrous legacy of Bush’s fiscal mismanagement, while not recognizing the economic recovery for which his policies are responsible. Since June 2009, Obama has added 1.2 million jobs to the economy, more than half of what Bush added during his entire eight year tenure.

Romney recently claimed that “I’m not terribly worried about the very wealthiest in our society. They’re doing just fine.” So why does his proposed tax plan, as analyzed by the non-partisan Institute on Taxation and Economic Policy, afford the wealthiest 1% tax breaks that are three times larger, in percentage terms, than the bottom 80%?

Republicans say that creating jobs is their top priority, but stood in the way of a payroll tax break for 160 million workers (that Moody’s Analytics estimated would add 750,000 jobs) because it was to be paid by a small tax increase for the wealthiest Americans. Their alternative was to lay off 10% of the federal workforce, which would only exacerbate the problem. And lest one assume that Republican administrations lead to smaller government, the facts prove otherwise. President Reagan increased nonmilitary payroll by nearly one-quarter million. George W. Bush increased it by 53,000. Under Obama, the federal workforce is smaller than it was when Reagan took office, in no small part due to the Democratic administration of Bill Clinton, which lowered the federal payroll by 380,000.

We need to evaluate the Republican storyline carefully; it’s apt to be more fiction than fact.

A local matter: High school auditorium project 'MISA'

Just like the Republicans in Washington, the local Republicans in my hometown of Greenwich, CT are doing what they can to defund spending on valuable public services, in this case education...

To the editor:

In a town that pays for human traffic lights on Greenwich Avenue, repeatedly plows roads that have already been cleared of snow, and resurfaces roads that are already in good condition, it’s disingenuous for the Republican members of the BET budget committee to claim that Greenwich doesn’t have the resources to afford the Greenwich High School Music Instruction Space and Auditorium project. While I enjoy the relatively low property tax rates in Greenwich, I would gladly pay more to fund worthwhile investments in the Greenwich Public School system.

MISA addresses a well-defined need, with long term benefits for our children and the community at large that have been thoroughly vetted in public forums. It has broad community support among those who care about the quality of public education in Greenwich The unfortunate message coming from Republican BET members is that public education is not a priority in Greenwich. It is time for First Selectman Peter Tesei to show leadership by actively lobbying for the project, and for voters in Greenwich who care about the quality of education to carefully consider who they elect to the BET next November.

Truth about Taxes

My last letter prior to the mid-term elections. Please don't forget to vote on November 2nd.

Jonathan

I don’t like taxes any more than the next person, but it’s important to make decisions about the upcoming election based on facts.

Republicans are in favor of extending Bush tax cuts to the richest 2% because they claim it will help the economy. But according to the non-partisan Congressional Budget Office, extending high-income tax cuts is the worst policy option currently available for promoting jobs and economic growth.

Republicans want us to think that President Obama and the Democrat-led Congress have raised taxes. That’s not correct. The stimulus package resulted in tax cuts for 98% of working taxpayers in 2009; no one has had a federal tax increase in the past two years.

Republicans claim they want to help “Joe taxpayer” as much as they want to help the rich. It’s not true. They are against extending enhancements to the Child Tax Credit and Earned Income Tax Credit that help working families, but for extending tax cuts to the richest 2% of taxpayers. So, with Republicans in control, many Americans would actually pay higher taxes than under President Obama’s proposed tax relief.

Republicans want us to think that the Bush tax cuts were great for the economy. Facts show the opposite. In the six years following the Bush tax cuts, jobs grew by 4.8%. In contrast, following Clinton’s courageous move to raise taxes in order to restore fiscal responsibility to the Federal budget, jobs grew by 16.2%, more than three times better than Bush’s performance.

If you want to live in a fairyland of low taxes and no hard choices, vote Republican. If you want to help the vast majority of Americans who need help, and recognize that some sacrifice by the most fortunate of us is necessary to set our fiscal house in order, vote Democrat.

A good article from which some of my facts were confirmed:

Three Good Reasons to Let the High-End Bush Tax Cuts Disappear This Year, Center for American Progress, 7/29/10

http://www.americanprogress.org/issues/2010/07/let_cuts_expire.html