Saturday, December 31, 2011

Mitt Romney Promises To Veto DREAM Act If Elected

Original Link:

By Sarah B. Boxer

Mitt Romney, an opponent of the DREAM Act, said he would veto it if it came across his desk as president.

The question was posed Saturday by a voter at the Family Table Restaurant in Le Mars. It was the first time Romney had been asked directly if he would veto the act and he responded that the "answer is yes."

The DREAM Act would allow children brought to the United States illegally by their parents to earn citizenship by taking a number of steps that include completing college or serving two years in the military. It was been considered several times by Congress but has never passed.

Romney said he is open to military service -- with appropriate requirements -- as a way for people to earn permanent residency as it currently is a way for people to earn citizenship.

"I am delighted with the idea that people who come to this country and wish to serve in the military can be given a path to become permanent residents in this country. Those who serve in our military and fulfill those requirements, I respect and acknowledge that path," he said. He does not support a path to citizenship through education.

David Axelrod, President Obama's top campaign adviser, tweeted that Romney's comments Saturday were "Wrong on principle & politics." Juan Sepulveda, the Democratic National Committee's senior adviser for Hispanic Affairs, called Romney's veto threat "appalling." He said it removed any doubt that his "far-right views on immigration would make him the most extreme presidential nominee in recent memory."

Romney Admits He Destroyed Government Records To Keep Them From Political Opponents

Original Link:

By Alex Seitz-Wald

Last week, a Boston Globe investigation uncovered that former Gov. Mitt Romney’s administration destroyed emails, purchased hard drives, and otherwise obliterated all digital records of his time as governor of Massachusetts. This happened as Romney was leaving the state to campaign for president (the first time), and observers immediately speculated that the systematic destruction was politically motivated to hide embarrassing data.

Romney and his campaign have so far denied this, with the candidate saying this weekend in New Hampshire that his staff took the highly unusual step of purchasing their work hard drives because they might contain “confidential and private” information. Meanwhile, he’s made calls for greater White House transparency a part of his campaign message.

But in a fairly stunning admission today during an interview with the editorial board of the Nashua Telegraph in New Hampshire, Romney suggested that his administration deleted emails because they didn’t want “opposition research teams” to have access to them:
ROMNEY: Well, I think in government we should follow the law. And there has never been an administration that has provided to the opposition research team, or to the public, electronic communications. So ours would have been the first.
Watch it:

While Romney’s claim that no previous administration had kept emails may be true, that’s hardly a strong precedent given that emailing was not commonplace for very many years before Romney took office.

Meanwhile, Romney clearly broke precedent with the hard drive buybacks, as staffers for previous administration called the purchases “unheard of.” Terry Dolan, who worked in six previous administrations in the state, told the Globe, “That had not happened prior to the end of the Romney administration.” “I don’t remember anybody buying their hard drives. I don’t remember anybody buying anything,’’ said Stephen Crosby, who worked for Romney’s two predecessors.

Romney Fiscal Plan: Hypocrisy or Idiocy?

Original Link:

Romney Fiscal Plan: Hypocrisy or Idiocy?

Rome is burning. The federal government has a spending addiction. Our nation has made more than $63 trillion in unfunded promises, to be paid for by future generations. Those who are awake, agree we have to cut spending in a major way. It is what drives many of us. The solution is to reduce federal spending.

And yet, Washington, D.C.’s, bipartisan, multi-decade “borrow-and-spend” agenda and the U.S. national debt crisis is still on the fence with no resolution in sight. Yes, trash the needless bureaucratic departments and agencies and “dismantle” the size and scope of intrusive government. This is a fairly straight-forward point. It is a concern as old as our Republic.
Washington spoke about it… But, Jefferson said it best:
“I place economy among the first and most important republican virtues, and public debt as the greatest of the dangers to be feared.”
Romney Fiscal Plan

On November 3,2011, Mitt Romney presented his fiscal plan in USA Today outlining a deficit-reduction plan that he said would slash federal spending and “economize, simplify and make smarter government.” Smarter Government, eh? Romney sets a target of returning federal spending to around 20% of the economy by the end of four years.

To get there, he says he’ll apply a disjointed formulation of a simple cost-benefit test across the government: “Is this program so critical, so essential, that we should borrow money from China to pay for it?” Notably, Romney claimed he would “eliminate every government program that is not “absolutely essential.”” Eliminate every government program that is not absolutely essential, eh?
Romney’s platitudes sound good until you realize Romney’s spending “cuts” would expand the federal budget by 8% over the next four years and Mr. Romney does not eliminate a single cabinet-level department. Not one. Zilch. Nada. Let me repeat. Romney does not eliminate a single cabinet-level department. That doesn’t suggest a strong commitment to fiscal responsibility.

From Jacob Sullum: Romney’s goal of cutting $500 billion from projected federal outlays in 2016 would, at best, leave the budget about 8% higher than it is now and only 11 % lower than it would be without any attempt to restrain spending. The implication: Mitt Romney thinks 89% of what the federal government does is “absolutely essential.”

Cutting the amount of an increase in spending is not a ‘cut’. It is only a reduction in the increased rate of ‘spending’. All together, Romney’s proposed cuts represent less than 3% of federal spending in 2011 and less than 8% of the $1.3 trillion deficit. Romney’s increase in the size and scope of government is hardly a commitment to fiscal responsibility. By contrast, Ron Paul’s plan would balance the budget by 2015.
Specific Romney cut highlights:
  • Romney’s spending “cuts” would expand the federal budget, at best, 8% by 2016.
  • Romney claimed he would “eliminate every government program that is not “absolutely essential.”
  • Mitt Romney does not eliminate a single cabinet-level department.
  • Mitt Romney thinks the Department of Housing and Urban Development is “absolutely essential.”
  • Mitt Romney thinks the Department of Education is “absolutely essential.”
  • Mitt Romney thinks the Department Energy is “absolutely essential.”
  • Mitt Romney thinks the Department of Commerce is “absolutely essential.”
  • Mitt Romney thinks the EPA is “absolutely essential.”
  • Mitt Romney thinks the National Endowment for the Arts is “absolutely essential.”
  • Mitt Romney thinks the National Endowment for the Humanities is “absolutely essential.”
  • Mitt Romney thinks funding NPR and PBS are “absolutely essential.”
  • Mitt Romney does not cut one government worker. He would reduce the federal work force only through attrition.
  • Romney said he would align federal compensation with the private sector, which he said would save more than $40 billion by 2016.
  • Romney didn’t endorse private Social Security accounts so younger workers can build up wealth that they would own and be able to pass along to heirs. Instead, Romney would endorse “progressive indexing,” essentially an income test that would slow the increase in future benefits for wealthier seniors and gradually raise the retirement age.
  • Romney wants to “eliminate Title X family planning programs which cost roughly $300 million a year.
  • Romney wants to “eliminate subsidies for the unprofitable Amtrak” which he says would save $1.6 billion a year.
  • Romney says he would repeal ObamaCare, thereby saving $95 billion in 2016. Though, according to the CBO, the $95 billion reflects how much federal spending would be cut, not how much the repeal would reduce the deficit. Health-care repeal would cut the deficit by $16 billion in 2016, not $95 billion. That is because the health care law raises some taxes and cuts Medicare spending, changes that would also be repealed.
  • Romney favors block grants for Medicaid to the states capped at inflation plus 1%, which means Governors would lead a wave of federalist experimentation. The proposed cuts would reach $200 billion a year by the end of the decade.
  • Romney embraces about two-thirds of Paul Ryan’s “premium support” Medicare plan giving all seniors a defined cash contribution to choose among private insurance options. Missing from his plan is how the premium-support payments would grow over time.
  • Romney would repeal the Davis-Bacon Act saving $10 billion a year.
  • Romney would increase Defense spending.

    Underwhelming. The idea of eliminating programs is always preferable to proposals than make overall spending reductions. The latter path can simply be negated by future Congresses by increasing the spending again, whereas elimination of the program makes it much more difficult to recreate them. Romney simply has no credibility when he promises to “eliminate every government program that is not absolutely essential.”

    Instead of zeroing NEA out, Romney makes “deep reductions” in NEA’s funding, which was $155 million this year, or 0.004% of the $3.7 trillion federal budget. And to think, getting rid of three Arts programs; the NEA, the NEH and the CPB [CPB provides funding for both NPR and PBS] would save less than $1 billion a year, about 0.02% of the total budget. What does it say about Romney’s commitment to fiscal restraint that he can’t even go that far?

    Romney said he would “consolidate, eliminate and streamline federal departments, agencies and offices following a stem-to-stern review.” But gave no detail. Romney claims he would take a stand against ‘foreign aid’ or giving taxpayer money to “countries that oppose America’s interests” but then does not name any in his plan, which in any event, accounts for just 1% of federal spending. Could he possibly be more vague?

    The biggest change is more of a nod to voucherizing Medicare, though keeping the old system for those who want it. Typical Romney. Have it both ways. Where are the $100B required annual savings in Social Security, Medicare and Defense? Name some victims other than Amtrak passengers and ballet companies. Next he’ll claim he can balance the budget by eliminating the White House Christmas card.

    There is pervasive institutional dishonesty when it comes to D.C.’s budget math. A classic example is the way politicians rig the system so a “spending cut” takes place if the budget grows by, say, 6% instead of 8%. The nefarious D.C. budget math is explained here by Dan Mitchell during an interview with Judge Napolitano.

    Romney is full of platitude and pander [stronger language deleted by author]. He has no intention or plans to cut much of anything, but is making symbolic attacks on things Republicans traditionally don’t like. It’s the most predictable, cliché list of pseudo-cuts I’ve ever seen, proving once again that Romney is a principle-free opportunist. With Romney, we would only be rearranging the deck chairs on the Titanic:
    Mr. Romney does not eliminate a single cabinet-level department.
    Mr. Romney’s spending “cuts” would expand the federal budget.
    Mr. Romney thinks 89% of what the federal government does is “absolutely essential.”
    It is laughable how Mitt Romney tries to pass himself off as some champion for fiscal restraint, a candidate with grassroots Tea Party ideals with a history of job creation. Nothing could be further from the truth. Romney’s record as Massachusetts’s governor is that of a liberal progressive; higher taxes, high unemployment and bigger government. And, this chart from the Boston Globe on Massachusetts’s economic performance during Romney’s tenure brings home the point.
    Instead of reducing federal spending Rome would continue to burn under Romney.

    Will Cutting Taxes for the Rich Really Create Jobs?

    Original Link:

    By Brendan Fischer

    The White House and many Congressional Democrats recently caved to Republicans in a deal extending all of the Bush tax cuts for two years in exchange for a 13-month extension of unemployment benefits. The deal reverses stated opposition by many Democrats to an extension of tax cuts for the top income bracket, with 25 percent of the savings from the deal going to benefit the richest one percent of Americans. While Democrats who supported the bill claimed to do so begrudgingly, the plan has many avid supporters who justify its lopsided benefits by insisting that tax cuts for the rich and for businesses create jobs and benefit the economy. This is a big myth.

    Looking at raw statistics, it is easy to see that there is hardly any correlation between reducing personal income tax rates for the wealthy and employment levels. The marginal tax rate for the wealthiest members of society hovered above 90% for the twenty years between 1944 and 1963, with unemployment during this period as low as 1.2 percent and a high of 6.8 percent. From 1965 to 1981, taxes for the upper income bracket were lowered to 70 percent, with unemployment as low as 3.6 percent and as high as 7.7 percent; from 1982 to 1986, the wealthy were taxed at 50 percent, with unemployment only reaching a low of 7 percent and a high of 9.7 percent. Taxes continued dropping through the 1980s and 1990s, with the top tax rate dropping to 31 percent in 1992, but with very little positive impact on job growth. In 1993, unemployment was at 6.9 percent, the tax rate for the wealthiest increased to 39.6 percent, and unemployment actually decreased to 4 percent by 2000. From 2003 through today, thanks to the Bush tax cuts, the rich have been taxed at 35 percent, and unemployment is now approaching 10 percent.

    Jobs are Created by Consumer Demand, Not by Increasing the "Supply" of Disposable Income for the Rich

    Republicans have pushed for extending Bush's tax cuts on the rich based on the logically appealing premise that "government doesn't create jobs, private business creates jobs; therefore, if we reduce taxes on businesses and the upper income brackets they will have more to spend on creating jobs." Many Republican candidates ran on this platform, and recently, "bipartisan" deficit reduction recommendations from both the Bowles-Simpson and Rivkin-Domenici commissions have arguably advocated for reducing taxes for the wealthy and corporations, and increasing taxes on low- and middle- income Americans. Whlie the degree of the cuts depends on whether we look at marginal or average tax rates, and the baseline tax rate used in the assessment, its regressive tax margins appear to rest on the "less taxes on the rich equal more jobs" assumption.)

    The idea that wealthy people and corporations create more jobs when paying less in taxes is a claim that has superficial appeal, premised on the idea that, because businesses employ workers, they would employ more workers if they had more money. However, this simple calculus fails to acknowledge that employment is driven by consumer demand, not the amount of money in an executive's pocket or on a business' balance sheet. A business or entrepreneur will not use profits to add more workers unless there is consumer or business demand for their product or service.

    To take a simple example, a Subway franchise owner hires more employees when her shop sells more sandwiches. She does not hire another employee simply because her personal income has increased (unless she has no business sense). The same applies to manufacturing: the widget mill owner hires employees when the business gets more orders for widgets, not when there are profits on the balance sheet; to expect otherwise assumes naive altruism on the part of the business owner. A worker is hired to produce something that people are buying, not to idly absorb excess business profits or executive income.

    Tax Cuts for the Rich Do Not Create Jobs

    Despite the claims of tax cut proponents, new jobs are not created by reducing taxes on businesses, nor are they created by reducing taxes on the upper-income bracket. Employment is determined by consumer demand, not by the amount of money in an executive's pocket.

    Reducing taxes for the upper-income bracket puts more money in the pocket of the wealthy few, who are most likely to spend that money paying down debt or investing it, neither of which are likely to create many jobs or stimulate the economy. Even if increased income for the wealthiest is invested, it tends to create few jobs. Savvy investors tend to put their money where the return is greatest -- in recent decades, the greatest return comes from investing in speculative activities with a quick turn-around (like housing bubbles or credit markets, neither of which contributes to real growth) or in developing countries with low costs and high growth rates. The latter was especially true with Bush's tax cuts-- when the dollar is weak, capital tends to flow to stronger currencies. Indeed, the Financial Times reports that much of the increased take-home pay from Bush's tax cuts for the upper income tax brackets has gone overseas.

    Extending the Bush tax cuts for the wealthy will generate far fewer economic benefits than demand-focused dollars directed towards the average American. The White House deal won Republican concessions on maintaining tax cuts for average Americans and extending unemployment benefits, both of which will benefit the economy. Low- and middle-income earners tend to spend the take-home pay that comes from tax cuts or unemployment benefits -- they purchase more Subway sandwiches or widgets, which compels the franchise or factory owner to hire extra employees to meet the increased consumer demand.

    The Economic Policy Institute reports that "Moody's Analytics Chief Economist Mark Zandi estimates that every dollar spent making the Bush income tax cuts permanent generates only 32 cents of economic activity. Comparatively, every dollar spent on unemployment assistance generates $1.61 worth of economic activity, a dollar of spending on infrastructure (which gives work to middle class Americans) yields $1.57 and a dollar in assistance to states to prevent layoffs of teachers or first responders (both middle class jobs) yields $1.41."

    Business Tax Cuts Do Not Necessarily Create Jobs

    The "less taxes equals more jobs" theory also does not hold true for cuts targeted at businesses. Reducing taxes reduces business operating costs, which increases profits; however, as noted above, jobs are generated by demand, not by profits. The Subway franchise will not hire additional employees until it sells more sandwiches.

    Indeed, American corporations are more profitable now than they were at the beginning of the recession, but still are not hiring. After two years of streamlining spending and laying off American workers, leading US corporations reported nearly $2 billion on their balance sheets at the end of the second quarter. If businesses hired employees when they had extra profits, America would not be facing 10% unemployment. Many businesses are hesitating to hire new employees because they are concerned about future demand.

    Reducing the tax overhead for a business permits the owner to reallocate tax expenditures elsewhere. These funds may be used to pay down debts or increase the owner's take-home pay, but these dollars are not used to hire more employees. While increased liquidity could be used to hire new employees to develop, produce, or market new goods or services, a business will only do so if there is anticipated demand from people willing and able to pay for the new goods or services.

    While reduced tax overhead does not create jobs, targeted business tax reductions can be beneficial. In our current situation, a business could be compelled to move its profits into the economy and hire new employees through a temporary employer payroll holiday, or by permitting tax write-offs for certain types of business investments that tended to create new jobs. A business that is contemplating shutting down or moving overseas can be incentivized to continue operating in the U.S. through tax incentives that reward employing workers domestically (admittedly, this has been made more difficult by international trade agreements requiring that American workers compete with foreign workers whose standards of living are lower, or whose governments provide social services that reduce wages). Likewise, providing tax incentives to nascent but socially useful industries can advance the national interest-- for example, providing tax incentives to manufacture wind energy turbines in the United States can create jobs and reduce the need to import this equipment.

    Business Tax Cuts Do Not Increase Wages

    Decreased tax overhead not only fails to provide employers an incentive to hire more employees, it provides little incentive to raise wages for existing employees. At first glance, it might seem that cutting taxes for businesses would trickle down to existing employees in the form of increased compensation. However, basic rules of labor supply and demand contradict this Utopian scenario -- an efficiently-run business pays employees the lowest wage possible to maintain productivity and morale.

    Employees could theoretically demand higher wages in response to business tax cuts, but this rests on a misunderstanding of employment relations. An existing employee's ability to demand higher wages is primarily based on "leverage" -- the threat that the employee would quit, and that the employer would not be able to find another employee with the same skills and abilities for a lower price. Reducing a business' tax overhead does nothing to change this calculus. What's more, an employee's leverage is diminished in a tough economy with high unemployment, as most current employees can likely be replaced by an equally skilled (but more desperate) job-seeker willing to work for a lower rate.

    Putting Money in the Pocket of the Average American Will Create Jobs

    This scenario helps describe why America needed the demand-focused economic stimulus package. By putting unemployed people to work building roads and installing internet cables, the middle and lower classes have money in their pocket to spend on groceries, Subway sandwiches, and widgets. And when the Subway franchise owner sells more sandwiches, she hires more employees to meet that growing demand. The same goes for widget demand and widget manufacturing jobs. Likewise, when taxes are reduced for low- and middle-income families, they tend to spend their increased take-home pay, boosting demand for goods and services and creating more jobs.

    The Bush Tax Cuts Never Lived Up to Their Promise in the First Place ... But Have Been Extended Anyway?!

    Considering the above facts, it should be surprising that any politician would willingly support extending the Bush tax cuts, until we look at their major campaign supporters. Extending the cuts is even more absurd considering that the tax cuts never lived up to Bush's promises of economic growth.

    Bush's 2001 and 2003 tax cuts significantly reduced personal income tax rates, particularly for the upper tax bracket (although taxes for most Americans were also reduced). The 2001 cuts were followed by continued job losses for about a year. The economy started to turn around after the 2003 tax cuts, but failed to create the growth its proponents claimed-- the Bush Administration's projection was off by 3.1 million jobs. What's more, post-tax cut growth was partially buoyed by the housing bubble and refinancing rules that allowed people to borrow money against increased housing values; that bubble began to burst in 2006.

    According to most estimates, President George W. Bush created a net total of 1.08 million jobs over his eight-year term, tax cuts and all. President Bill Clinton, who did not cut taxes, created 22.7 million jobs during his term. Clinton's job growth rates may actually be greater if we discount artificial growth under Bush generated by the housing bubble, and the IT job growth from the tech bubble under Clinton. And when we look at the labor market's cyclical expansions and contractions over the past 40 years, we see little correlation between tax cuts and jobs created.

    The deal recently passed by Congress also will extend Bush's cuts on dividend and capital gains taxes. Capital gains are where the richest members of society really avoid taxes, particularly profits made from hedge funds. The Financial Times reports that Bush's capital gains tax cuts failed to stimulate business investment and improve economic competitiveness, and that "the 2000s -- that is, the period immediately following the Bush tax cuts -- were the weakest decade in U.S. post-war history for real non-residential capital investment."

    Of the 10 economic expansions since 1949, the expansion from 2001 through the end of 2007 ranks dead last in terms of economic growth, national investment, employment and employee pay. With the recent passage of the deal between the White House and Congressional Republicans, it is a good bet that the U.S. will see more of the same.

    The 9 Biggest Conservative Lies About Taxes and Public Spending

    Original Link:

    ByJoshua Holland

    Here are the things the corporate media won't tell you about the tax-cut rhetoric in Washington.

    It’s difficult to know where to begin deconstructing conservative rhetoric on taxes and spending. It's such a central part of their worldview, and yet it's a view informed by a whole slew of falsehoods that have been repeated again and again during this year's debates over the Bush tax cuts, public spending and the deficit. What follows are nine of the biggest fact-free whoppers that conservatives insist are true.

    1. Cutting Taxes Leads to More Money for the Government

    Conservatives can't say they oppose popular programs on ideological grounds, and they can't admit they're happy to run up huge budget deficits, so they've come up with the fiction that cutting taxes actually brings in more revenues to finance the public sector.

    What's especially brazen about this is that it's usually preceded by debate-stifling phrases such as “as everyone knows,” “history shows us” or “every single time taxes have been cut.”

    In 2007, Sen. John McCain, R-Arizona, said, “Tax cuts, starting with Kennedy, as we all know, increase revenues”; Sen. Kay Bailey Hutchinson, R-Texas, claimed that “Every major tax cut we've had in history has created more revenue," and Senate Minority Leader Mitch McConnell, R-KY said earlier this year that the myth represented “the view of virtually every Republican on that subject."
    It's also complete nonsense, and it's worth noting that only conservative politicians and pundits make the claim -- economists across the ideological spectrum agree that the argument is cursed by voodoo math.

    As Time Magazine's Justin Fox noted in 2007, "Every economics Ph.D. who has worked in a prominent role in the Bush administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves—and were never intended to.” Harvard professor Greg Mankiw, a former chairman of Bush’s Council of Economic Advisers, dedicated a whole section of his economics textbook to debunking the claim.

    And in an opinion column in the Wall Street Journal responding to Bush's claim that "You cut taxes, and the tax revenues increase," Andrew Samwick, who served as chief economist on Bush’s Council of Economic Advisers, wrote, “You are smart people....You know that the tax cuts have not fueled record revenues... You know that the first order effect of cutting taxes is to lower tax revenues.”

    2. Conservatives' Favorite Economist Proves the Point

    As I note in my book, The Fifteen Biggest Lies About the Economy, that falsehood is based in large part on an abuse of “Laffer’s curve,” the conservative media’s favorite economic theorem. The idea, first scribbled on a cocktail napkin by economist Arthur Laffer (according to lore), is pretty simple. It holds that you can raise income taxes to a degree, but when the top tax rate exceeds a certain point, people will go to such extraordinary lengths to avoid paying the piper that the government will actually end up collecting less revenue.

    When Dylan Matthews asked a number of experts where the Laffer Curve “bends” for the Washington Post, the economists (he asked some conservative opinion columnists as well) all agreed that a top rate of 50 percent – several went as high as 70 percent – would still fall below the curve. That's important to keep in mind as we debate the merits of letting the top rate return to the 39 percent that prevailed during the Clinton years.

    Each time taxes have been cut in the past few decades, it's led to a drop in revenues, which is why people like McCain like to go back to the Kennedy era, when cutting the top rate did spur growth and bring more money into the government's coffers. What they don't mention is that Kennedy cut the top rate from 91 percent to 70 percent, which has no bearing on the debate we're having today.*

    3. Taxes on the Rich Keep 'Wealth Producers' from 'Creating Jobs'

    We're all familiar with this one. In a New York Post column last week, Fox Business columnist Charles Gasparino claimed that businesses have "been hoarding cash instead of hiring" because of "the likelihood for higher taxes.” Media Matters responded by citing the CBO's finding that "[I]ncreasing the after-tax income of businesses typically does not create much incentive" to hire.
    What's noteworthy about the narrative is the degree to which it defies simple common sense. It shouldn't be a matter of debate that only one thing creates jobs, and that's demand for companies' goods and services. The idea that a business that was booming would refuse to hire people and forego expansion because top tax rates might nudge upward is as silly as the idea that a business that has no customers would add new employees because its owners expect taxes to be low.

    4. The Opposite: Tax Cuts for Upper Earners Spur Job Growth

    Demand creates jobs, and U.S. Demand is way down because American households lost around $15 trillion dollars in wealth during the downturn. So it's important to note that research has shown that when you give a tax break to high-earners, they bank it, and when you give relief to working people, they spend it, increasing demand.

    Like other types of public spending, giving cuts to those at the top does stimulate the economy, but very, very badly. According Mark Zandi, chief economist for Moody's, a dollar in tax cuts on capital gains adds .38 cents of economic growth and a dollar in corporate tax cuts brings us just .30 cents worth of stimulus, but a dollar in unemployment benefits gives the economy a boost of $1.63 and a buck worth of food stamps adds $1.73 in stimulus (PDF).

    5. Only Half of American Families Pay Taxes

    Rush Limbaugh put it this way: “The bottom 50 percent is paying a tiny bit of the taxes.... Remember this the next time you hear the ‘tax cuts for the rich’ business. Understand that the so-called rich are about the only ones paying taxes anymore.”

    That's an entirely false narrative that emerges from some rather transparent sleight-of-hand. You have to look at the federal income tax in isolation and then pretend that it represents the government’s entire take. But the reality is that the government isn't financed from federal income taxes alone – far from it. Payroll taxes, for example, represent the biggest tax bite for the average worker.

    When you add it all up—state and local taxes, federal taxes, sales taxes and excise fees—it turns out that the rich, the poor, and those in between all end up with about the same tax rate. That’s the conclusion of a 2007 study by Boston University economists Laurence J. Kotlikoff and David Rapson. They summarized, “The average marginal tax rate on incomes between $20,000 and $500,000 is 40.3%, the median tax rate is 41.8%, and the standard deviation of all of those rates is 5.3 percentage points. Basically, most of us pay about 40%, plus or minus 5.3 percentage points.”

    6. Americans Are Taxed to Death

    This is one of those claims made so frequently that it becomes a matter of faith. But faith doesn't rely on fact, and this one is totally untrue.

    In 2008, we ranked 26th out of the 30 countries in the Organization for Economic Cooperation and Development (OECD) in terms of our overall tax burden -- the share of our economy we fork over to the government. The U.S.came in almost 9 percentage points below the average of the group of wealthy nations, and some 20 percentage points below highly taxed countries like Denmark.

    7. We're Being Killed by Runaway Government Spending

    Public spending has increased with the wars in Afghanistan and Iraq, and, temporarily, with the stimulus package. And it will rise in the future as more baby boomers retire. But beyond that, it's important to understand how “limited” our government really is relative to other wealthy countries.
    Sabina Dewan and Michael Ettlinger of the Center for American Progress crunched the data and found that between 2004 and 2007, the U.S. ranked 24th out of 26 OECD countries in overall government spending as a share of our economic output. Only Ireland and South Korea, both relative newcomers to the club, had a more “limited government” than we did during that span. Again, we came in around 7 percentage points of GDP below the OECD average -- and almost 20 percentage points beneath that of big spenders like France

    8. Conservatives Favor Low Taxes and Limited Government

    The Right loves “Big Government” as long as it's pursuing their preferred agenda. What they don't like are the government's most popular functions – assuring a social safety net, protecting consumers and the environment, subsidizing education, etc. They don't want to debate priorities, so they claim an ideological preference for a smaller government while showering tons of money on the military, law-enforcement, corporate subsidies, etc.

    That's why the share of the economy represented by government spending (at the local, state, and federal levels combined) has been remarkably consistent during the last 40 years or so, regardless of which party controlled the White House or Congress.

    In the two years that Gerald Ford presented budgets, government spending as a share of GDP averaged 31.4 percent; in ultra-liberal Jimmy Carter’s four years, it dropped to 30.7 percent; Ronald Reagan, the patron saint of fiscal conservatism, came into office, and it rose to 32.2 percent. It nudged slightly higher during the first George Bush’s term in office, then dropped to an almost Nixonian 30.3 percent during the Clinton years, before rising to 31.6 percent during the second Bush administration.

    Looking at the other side of the ledger, overall government revenues have also remained relatively stable, but the pattern is reversed. The government’s take, as a share of GDP, dropped during the Ford era, rose again under Carter, and fell again under Reagan. Revenues rose by almost 2 percent under Clinton and fell by a percent and a half under George W. Bush. (The only exception: government revenues rose from 27.3 percent of GDP during the Reagan years to 27.6 percent under George Herbert Walker Bush – that was the “peace dividend.”)

    Although the government taxes and spends at fairly similar rates, under Republican leadership the nation shells out a bit more for government services and takes in just a bit less in taxes. With a $15 trillion economy, those little differences add up to pretty big deficits, and this, rather than hot school lunches for poor kids, is responsible for a large chunk of our federal debt.

    Given that reality, it's a wonder that conservatives have managed to convince the mainstream media and much of the country that they’re the fiscally responsible ones who are always ready to step in and clean up the nation’s budgetary mess.

    9. Taxes on Top Earners Are Actually Taxes on 'Small Businesses'

    For years, Republicans have pushed the spin that most of the Bush cuts for the highest earners were going to “small business owners,” the proverbial lifeblood of Small Town U.S.A. Then Republican national committee chair Ed Gillespie launched the meme in a 2003 speech, saying that “80% of the tax relief for upper income filers goes to small businesses.”, the nonpartisan campaign watchdog, looked at the claim, which was cooked up by GOP staffers on the House Economic Committee, and concluded that “it’s untrue—and a classic example of a statistical distortion gone amok.” The lie is pretty simple: around 80 percent of the wealthiest Americans report some business income on their tax returns, either from private partnerships (think big law firms) or from “hobby” businesses. And the GOP committee counted everyone who reported even a dollar on Schedule C of their returns as a “small business owner.”
    The reality? Less than 2 percent of tax returns reporting small-business income are filed by people in the top two income brackets. As a Washington Post analysis concluded, “If the objective is to help small businesses, continuing the Bush tax cuts on high-income taxpayers isn't the way to go -- it would miss more than 98 percent of small-business owners and would primarily help people who don't make most of their money off those businesses.”

    Friday, December 30, 2011

    Corporate Tax Cuts Don't Stimulate Job Growth

    Original Link:

    By Susan Milligan

    Prevailing conservative wisdom dictates that businesses need tax cuts—and investors need capital gains tax cuts—to get the economy moving. But two very well-executed articles on wages and taxes published recently suggest that targeting tax cuts at business executives may do little to improve the dismal unemployment picture.

    The Washington Post offers a startling analysis of income disparity, noting that the gap between the very rich and the rest of us has grown dramatically in the past few decades, reaching current levels that have not been seen since the Great Depression. In 2008, the Post reports, the top one-tenth of one percent of earners took in more than a tenth of the personal income in the United States. But the moneyed class is not dominated by professional athletes or big-name artistic performers or even hedge fund managers, the Post found. Instead, it is due to a big increase in executive compensation, even as real wages for some of their workers have dropped:
    The top 0.1 percent of earners make about $1.7 million or more, including capital gains. Of those, 41 percent were executives, managers and supervisors at non-financial companies, according to the analysis, with nearly half of them deriving most of their income from their ownership in privately-held firms. An additional 18 percent were managers at financial firms or financial professionals at any sort of firm. In all, nearly 60 percent fell into one of those two categories.
    The New York Times has a fascinating story that serves as an unwitting companion piece to the Post story. Corporate executives, the paper reports, are clamoring for a tax holiday to encourage them to bring their offshore profits back to the United States. And the money in question is big, the Times notes: Apple has $12 billion in offshore cash, while Google has $17 billion, and Microsoft, $29 billion. The companies with money sitting offshore argue that if the federal government were to offer them a huge tax break—say, a one-year drop from 35 percent to 5.25 percent—the businesses would bring the money home and operate as a private-sector economic stimulus. [See a slide show of the top 10 cities to find a job.]
    However, the Times notes:
    (T)hat’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage. Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research.
    Who needs a tax cut, then? The U.S. economy is very much consumer-driven; companies aren’t hiring, many business owners say, because people aren’t buying. The past behavior of corporations that have received huge tax cuts has not necessarily been to use the money to hire more people; the Bush-era tax cuts have been in place for a decade, and the unemployment rate is still 9.1 percent. And executive compensation has grown. Executives may feel entitled to earn more and more if their companies are doing well and expanding. But without customers, those companies will go bust.

    Happy 10th Birthday, Bush Tax Cuts!

    Original Link:


    You've been a failure in every conceivable way.

    The massive Bush tax cuts mark their 10th birthday this week. Sadly, despite my best efforts to find something redeeming about them—honest!—there is little to celebrate. By nearly all of the metrics set out by President Bush himself, the cuts were a colossal failure.

    In 2001, the Bush administration inherited a few years' worth of budget surpluses, so it decided to cut income tax rates, double the child-care credit, and sharply reduce the levies on investment income. The economy then slowed, even entering a brief recession. As a form of stimulus, the administration doubled down, expanding and hastening the 2001 changes. Bush promised that the tax cuts would do a whole lot more than put money in people's pockets—which, in fact, they did. He said they would "starve the beast," forcing Congress to reduce the size and scope of government. He promised they would increase the prosperity of all Americans. He also vowed: "Tax relief will create new jobs. Tax relief will generate new wealth. And tax relief will open new opportunities."
    OK, a pitter-patter of applause for what the tax cuts did do effectively: Cut taxes and reduce overall payments to Uncle Sam. Low-income families benefited from the child-care credit jumping from $500 to $1,000. High-income families benefited from the top marginal rate falling. Billionaires benefited from lightly taxed dividend income. And government receipts, in turn, dropped.
    But the benefits mostly accrued to the rich, according to the nonpartisan Tax Policy Center. The think tank reports that between 2001 and 2008, the bottom 80 percent of filers received about 35 percent of the cuts. The top 20 percent received about 65 percent—and the top 1 percent alone claimed 38 percent.
    What about the president's claims? Take his pledge that the cuts would spur job growth. To be fair, we'll ignore employment changes during 2008, the year the Great Recession seized the economy. During the 2001 to 2007 business cycle, America's economy enjoyed 52 straight months of job growth. But it was sluggish—in fact, the slowest rate of jobs growth on record since World War II, and just one-fifth the pace of the 1990s.
    Then there's wealth. Put simply, the aughts were a decade of income stagnation: The tax cuts failed to bolster most taxpayers' earnings, even before the recession hit. Median real wages actually dropped from 2003 to 2007. Household income from business-cycle peak to business-cycle peak declined for the first time since tracking started in 1967. As documented by my colleague Timothy Noah in his series "The United States of Inequality," this did not hold true for the nation's billionaires and millionaires. Garden-variety high-wage earners saw their income go up. And incomes for the top 1 percent skyrocketed. For some people, obviously, the cuts "generated new wealth," in the president's phrase. But overall, inequality got worse.
    That leads to the third metric: Did the cuts "open new opportunities"? It's a vague phrase, but one way to measure it is to look at job growth—and there's nothing to see there. Another way would be to say that the cuts benefited "job creators" (to use the current en vogue phrase), like the nation's start-up businesses. But the number of private-sector jobs created by young companies fell during the Bush administration.
    Unfortunately, the tax cuts never translated into robust economic growth, either. Indeed, the aughts saw the worst growth since World War II. From 2001 to 2007, annual GDP growth averaged just 2.4 percent per year, lower than in any other postwar business cycle. The contrast is starker still when judging against the previous decade. In real terms, GDP grew half as much from 2001 to 2010 as from 1991 to 2000.
    There is another metric that Bush set out for the tax cuts: Did they succeed in helping to create a smaller government? Again, the answer is no. Events beyond Bush's control necessitated the Afghanistan war. He later decided to invade Iraq, and pushed through unpaid-for domestic expansions of government, like Medicare Part D. Deficits and government spending as a share of GDP grew during the Bush administration.
    OK, a final attempt at celebration. Did the tax cuts stimulate the flagging economy in the early aughts? Sort of. Tax cuts give a mild boost to the economy, but not a big one. "After the tax rebates in 2001, 2003, and 2008, households [spent] between 25 and 67 cents more for each dollar of tax cut," William Gale of the Tax Policy Center writes. That makes tax cuts "a relatively weak way to help the economy compared to increases in government purchases, for which each dollar of increased deficit turns into an additional dollar of spending."
    So, to recap: The Bush tax cuts were followed by low GDP growth, negative median wage growth, and little job growth. Even before the Great Recession, growth in the Bush business cycle was the weakest since World War II. And the cuts cost about $2.6 trillion between 2001 and 2010, according to the Economic Policy Institute—adding to a debt future generations of taxpayers will pay for, plus interest.
    By Bush's own metrics, then, the tax cuts were a failure. But perhaps that is because Bush chose such absurd metrics and made such silly promises about tax cuts' economic omnipotence in the first place. To state the obvious, tax cuts are not magic. They can help a strong economy get stronger or help a weak economy pick up some steam. They also have a direct impact on the government budget. But they cannot goose employers into adding millions of jobs, pay for themselves, and arrest the growth of government, all while delivering everyone cupcakes. So perhaps the best we can say about the Bush tax cuts is that they did exactly what we should have expected them to do.

    At Town Hall, GOP Rep. Hultgren Can’t Explain How Bush Tax Cuts Created Jobs

    Original Link:

    By Zaid Jilani

    Last week, Rep. Randy Hultgren (R-IL) held a town hall meeting in Geneva, Illinois where he was peppered with questions about the Bush tax cuts. A woman stood up and asked him to explain how the Bush tax cuts for the wealthy created jobs for Americans.

    Hultgren repeatedly avoided answering the question, instead choosing to bash the stimulus or claim Illinois’ economy was hurt by higher taxes. Members of the audience continually asked him “Where’s the evidence?” but he avoided providing any answer:
    WOMAN: When the Bush tax cuts took effect in 2003 the unemployment rate was 6.2 percent. Now, in the ninth year of those cuts, the unemployment rate is 9.2 percent, so where is the evidence that these cuts for the most affluent actually create jobs? [...]
    (Audience applauds)
    HULTGREN: I think clearly the evidence, uh, well, let me say this. I get back to the stimulus, which was another thing which –
    MAN: We want the tax cuts?
    WOMAN: Where’s the evidence?
    ANOTHER WOMAN: Where are the jobs?
    HULTGREN: Good question. Let’s keep goin’. We got three minutes.
    (MULTIPLE AUDIENCE MEMBERS): No answer! [...]
    HULTGREN: I believe we’ve got a tax system that discourages productivity. We have to adjust that. It has to be flatter. [...] Not too long ago we raised taxes in Illinois, just in the past eight months, they already told us they spent all that money. [...] My evidence is Illinois being the number one job creator for Indiana, Iowa.
    Watch it:

    One reason Hultgren may have been unable to explain to his constituents how the Bush tax cuts created jobs is because they mostly haven’t. From 2001 to 2007, the economy endured “the slowest rate of jobs growth on record since World War II, and just one-fifth the pace of the 1990s.”

    Retired GOP congressional staffer: Bush tax cuts didn’t create jobs, budget deficits “were Republican in origin.”

    By GottaLaff

    Today’s L.A. Times has an op-ed written by Mike Lofgren. Who’s Mike Lofgren, and why should I care, you may be wondering? Why, he’s a retired congressional staffer, I reply. In fact, he’s a Republican. He worked in both the House and Senate Budget Committees.
    In his piece, Lofgren the Republican discusses the budget deficit, and explains (as very few do on the Tee Vee Machine) that raising the debt ceiling is not about more spending. It’s about paying back what we already owe, and that we must pay “for past congressional decisions on taxes and spending, and those decisions were made primarily when Republicans were in charge.”
    He should know.

    He also points out that the GOP, while heaping the blame on Democrats, hasn’t exactly come up with any ideas of their own.

    My party talks a good game, railing about the immorality of passing debt on to our children. But the same Congressional Budget Office that punctured Obama’s budget also concluded that the major policies that swung the budget from a projected 10-year surplus of $5.6 trillion in 2001 to the present 10-year deficit of $6.2 trillion were Republican in origin. [...]
    The Bush tax cuts have added another $3 trillion in red ink. While Republican leaders wail that Americans — particularly their rich contributors — are overtaxed, the facts say otherwise: U.S. taxpayers, particularly the wealthiest, pay far less in taxes than they would in most other developed countries. Today, the 400 wealthiest Americans have as much wealth as the bottom 125 million. The GOP insists that those wealthy people use their money to create jobs, and that taxing them more heavily would ultimately hurt the economy. But, if that’s so, why was the rate of job creation in the decade after the Bush tax cuts the poorest in any decade since before World War II?
    Like a drunk swearing off hooch for the hundredth time, Republicans are now trying to show they are serious about controlling the deficit
    That’s right, he just compared the GOP to alcoholics who, like so many addicts, swear they can quit if they want to. You see, they said they were going to quit (control the deficit), but they were just saying it, they really didn’t mean it.

    Please read the whole thing here.

    Mitt Romney Close to Worst in Country at Job Creation, Ranked 47th Out of 50 States

    Original Link:,_ranked_47th_out_of_50_states/

    By Steve Benen

    As Mitt Romney’s atrocious record on job creation continues to from other Republicans, Democrats are starting to focus more of their energies on the Republican frontrunner’s more glaring vulnerability.

    Today, for example, the former governor will campaign at a NASCAR race in Loudon, New Hampshire. The Democratic National Committee released a new video to honor the occasion.

    In case there are any doubts, this has the benefit of being true. During Romney’s only service in public office, his state’s record on job creation was “one of the worst in the country.” Massachusetts really did rank 47th out of 50 states in jobs growth on Romney’s watch (and unlike President Obama, Romney didn’t inherit an economic crisis). There was a reason Romney served one term and then quit — he was not all popular with his constituents and probably would have lost a re-election bid.
    And that’s just his public-sector record. In the private sector, Romney made a living slashing American jobs — a record that’s also starting to gain wider attention.

    On the campaign trail, Romney keeps making this worse. He not only seems to find unemployment funny, he’s also arguing that jobless Americans have to bear a greater burden because corporations need another tax cut.

    Despite all of this, Romney has decided to not only build his entire campaign around the jobs issue, but also position himself as a champion of the unemployed. This morning’s DNC video is a hint of what’s to come — labeling Romney as “the anti-jobs candidate” will be a pretty straightforward exercise.

    As a purely political matter, unemployment is obviously a key obstacle for the president’s re-election. Is Obama lucky enough to have Republicans nominate the candidate whose weakest issue is jobs?

    Romney Gives Obama A Failing Grade, But Massachusetts Ranked 47th In Job Growth While He Was Governor

    Original Link:

    By Travis Waldron

    Former Massachusetts Gov. Mitt Romney (R) is focusing the early part of his presidential campaign on the economy, slamming Obama’s performance while touting himself as an experienced job creator. But while he assigns Obama a failing grade on his job performance thus far, reports from his time as governor show that Romney’s record as a job creator isn’t as strong as he would like voters to think.

    Massachusetts, which Romney governed from 2003-2007, ranked 47th among the 50 states in job creation numbers during his tenure.

    Romney will officially launch his campaign later today in New Hampshire, again blaming Obama for having “failed America.” At campaign stops in Columbia, SC, and Des Moines, IA, over the past two weeks, Romney has consistently bemoaned lagging economic numbers during Obama’s time in office. ThinkProgress was in Des Moines Friday, when Romney told a crowd at the Des Moines Historical Building that Obama couldn’t manage an economic recovery because he has never had a real job:
    ROMNEY: Our economy hasn’t returned to full employment like it should have. We’ve seen the slowest job recovery since Hoover. … What’s wrong is that this president put in place a series of economic steps that didn’t work. His agenda failed because he doesn’t understand how the economy works. It’s time to have a president who understands how to create jobs because he’s had one and knows how the economy works for the American people.
    What Romney leaves out of his stump speech, however, is just how bad his state’s job creation statistics were during his four years as governor. Different job creation studies rank Massachusetts in the bottom four states during Romney’s administration. A study by the independent think tank MassINC ranked the state 49th in job creation from 2001-2007, ahead of only Michigan. And according to the U.S. Department of Labor, Massachusetts ranked 47th, ahead of only Michigan, Ohio, and Louisiana. Michigan and Ohio, both located in the Rust Belt, faced heavy job losses due to the flight of manufacturing jobs from the Midwest. Louisiana, meanwhile, lost hundreds of thousands of jobs in the aftermath of Hurricane Katrina in 2005.

    During Romney’s period as governor, Massachusetts’ job growth was just 0.9 percent, well behind other high-wage, high-skill economies in New York (2.7), California (4.7), and North Carolina (7.6). The national average, meanwhile, was better than 5 percent.
    Andrew Sum, an economist at Northeastern University, researched Romney’s job record and found that Massachusetts lagged on virtually every economic indicator during his time in office, as he told Reuters in 2008:
    “As a strict labor market economist looking at the record, Massachusetts did very poorly during the Romney years“, he said. “On every measure you’ve got, the state was a substantial under-performer.”
    As Pat Garofalo notes, Romney’s record in the private sector is equally unimpressive.
    Romney blames the poor job numbers on Democrats in the Massachusetts state legislature. But since its economy faltered in 2008 and 2009, Massachusetts has rebounded in the job creation ranks, emerging from the recession with some of the nation’s strongest job numbers. Under current Gov. Deval Patrick (D) — and a legislature still controlled by Democrats — the state experienced 4.2 percent job growth in the first quarter of 2011, better than twice the national average and good enough to rank in the top 10 nationally. That followed a year of solid growth in 2010, when Massachusetts was among the nation’s leaders in job growth.

    Wednesday, December 28, 2011

    Grover Norquist's Real Game: Shifting Power and Wealth to the 1 Percent

    Original Link:'s_real_game%3A_shifting_power_and_wealth_to_the_1_percent___

    ByDonald Cohen and Peter Dreier

    Norquist's real mission has been government that serves corporate America.

    Grover Norquist is fast becoming the man everyone loves to hate – except those who fear him. Norquist, the leader of Americans for Tax Reform, is both the architect and enforcer of the Republican Party’s obsessive opposition to all taxes – an obsession that threatens to drive America off a fiscal cliff.
    Every Republican running for president (except John Huntsman) has signed Norquist’s no-tax pledge. So have 13 governors, 1,300 state legislators, 40 of the 47 Republicans in the Senate, and 236 of the 242 Republicans in the House.
    Politicians who refuse to sign Norquist’s pledge – or who violate it after getting elected by voting for tax increases -- risk facing his wrath in the next election. To avoid getting branded as pro-tax, they sign. Few candidates have wanted to appear “soft” on taxes since Ronald Reagan beat Walter Mondale in 1984 after the Democrat said that, if elected, he’d raise taxes.
    Norquist refuses to identify his donors, but, clearly his anti-tax small-government rhetoric is just a clever cover story to help his corporate benefactors. Last year Norquist supported the Republicans’ plan to extend the Bush tax cuts on the wealthy and to cut payroll taxes, which President Obama reluctantly agreed to. Norquist still embraces tax cuts for the rich. Atrecent meeting with GOP lawmakers, Norquist said that permitting the expiration of the Bush temporary tax cuts on the wealthy would violate the no new taxes pledge. But, he said, allowing this year’s payroll tax cut to expire wouldn’t breach the no tax dogma.
    Apparently, Norquist’s no-tax pledge doesn’t apply when it’s a tax on middle class families. In 2011, the payroll tax cut put $120 billion into the hands of millions of middle and working class Americans.
    In 2011, the richest one percent of Americans will get an average tax break of $66,384, thanks to the Bush cuts. That’s larger than the the average income of the other 99 percent -- $58,506.
    Norquist’s real agenda is obvious. Speaking for his corporate funders, he brands ending tax cuts for the rich as an outrageous tax increase while claiming extending payroll tax relief for working families is typical Democratic fiscal irresponsibility.
    Norquist claims that he is committed to smaller government. He once famously said that he wanted to reduce the size of government to the point that he could drown it in a bathtub. But his hypocrisy on extending tax cuts – OK for the rich but not for average working families -- reveals Norquist’s true colors. He’s a front man for the 1%.
    How did Norquist become the Machiavelli for the mega-rich? After earning his MBA at Harvard, Norquist served as was executive director of both the National Taxpayers Union and the College Republicans, then went to work as a speechwriter at the U.S. Chamber of Commerce. In 1985, Donald Regan – the former CEO of Merrill Lynch before becoming. Ronald Reagan’s chief of staff – plucked Norquist out of the Chamber and installed him as head of Americans for Tax Reform.,
    Since then, Norquist’s real mission has been government that serves corporate America. He’s supported government subsidies for ethanol and has lobbied on behalf of Microsoft, Seagrams and the gambling industry.
    As the head of Americans for Tax Reform he shilled for the tobacco industry. In 1993, tobacco giants Philip Morris and R.J. Reynolds worried that taxes on tobacco products might be included as a source of funding for health care reform. Norquist was an experienced warrior against taxes and had a network of state-level contacts that could be mobilized. The tobacco firms gave grants to ATR’s educational arm and made payments for ATR’s lobbying services. It was a marriage of convenience and opportunity for both and another example of Norquists’s real agenda behind his no-tax pledge: Shift more wealth and power to the already wealthy and powerful.
    Norquist also proved useful to the tobacco industry when he held press conferences, wrote op-ed pieces and lobbied against cigarette tax increases in a number of states seeking new revenues to fund health programs for children, including Maine, New Jersey, Alaska, and New Hampshire. He fronted for the tobacco lobby in its opposition to lawsuits seeking damages from states who spent billions of dollars in health care expenses treating the illnesses suffered by long-term smokers.
    In 2001, as George W. Bush was coming into the White House, Norquist penned an article in the right-wing American Spectator that outlined a Bush Administration strategy to create a permanent conservative Republican majority. His goal was, and is, to relegate the Democratic Party to minority status to head off progressive taxes and regulations on business that upset his corporate clients.
    Norquist’s article laid out a straightforward five point battle plan. Today, flush with cash, Republican elected officials are aggressively targeting Norquist’s “five pillars” of the Democratic party’s support.
    • Unions
    This year’s campaigns against public sector worker in Wisconsin, Ohio and Indiana are the merely latest chapter in concerted campaigns to shrink unions and limit their participation in politics. Conservative legislators and governors have proposed “right to work” measures, so-called “paycheck protection” measures that would make it harder for unions to represent workers in politics and privatization schemes designed to break unions while slashing wages and benefits.
    • Trial lawyers
    Business interests, under the benign sounding banner of “tort reform,” have been trying to limit corporate liability for decades. (The new documentary film, “Hot Coffee,” describes the business/Republican assault in great detail). The Bush presidency made it a centerpiece of his agenda. In 2005, George W. Bush signed a law moving class action suits from state courts to federal courts where fewer classes would be certified. The Bush Administration also regularly inserted pre-emption language into federal rulemaking at the FDA, the Consumer Product Safety Commission, the National Highway Traffic Safety Administration and the Department of Homeland security. For example, a 2006 FDA rule shifted on prescription labeling preempted state laws and helped Merck that was fighting thousands of lawsuits by consumers harmed by the arthritis drug Vioxx that was recalled in 2004 after it was linked to increased heart attacks and strokes. Similar preemptions were slipped into regulations covering mattress flammability, sunscreen labeling, and auto safety standards.
    • Voter registration groups
    GOP-controlled state legislatures are passing laws to restrict the right for Democratic-leaning constituencies – the poor, minorities, young people, and immigrant citizens. Dozens of laws have been proposed that restrict early voting days to make it more difficult for working people who aren’t given time off to vote on Tuesdays; reduce the number of college students that can vote by making it impossible for parents to claim their child as a dependent on their taxes if they register to vote while away at school; and require onerous identification cards for voters that will make it more difficult for seniors and others lacking drivers licenses or their birth certificates.
    • Progressive organizations receiving federal funding
    Efforts to defund non-profit organizations that receive federal funding to serve low income people began during the Reagan administration. In the last decade, the GOP has targeted funding for Planned Parenthood, NPR, and environmental groups such as the Defenders of Wildlife that receive federal grants and reimbursement of legal fees for non-profits that successfully sue the federal government for failure to enforce existing law.
    • “Big City” mayors
    Since the New Deal, Washington has sent job-creating funds – for housing, infrastructure, social services, and economic development and other goals – to urban areas, but when Reagan took office he began slashing these programs that primarily benefit low-income and minority populations, who tend to vote for Democrats. George W. Bush worked to finish the job started by Reagan. He proposed completely defunding the Community Development Block Grant (CDGB). He failed to eliminate the program but slashed the budget by over $1 billion during his second term. Norquist viewed this as money to help Democratic mayors gain support among their urban constituencies, who could then be mobilized to vote for Democratic candidates for President and Congress.
    Norquists’s plan has begun to hit roadbumps. Voters have opposed the attacks on the collective bargaining rights of public sector workers. In November, Ohio voters soundly rejected Governor’s Kasich’s law restricting union rights. Wisconsin residents recalled two state legislators and are signing petitions by the thousands to recall Governor Scott Walker. Republicans’ attempts to defund Planned Parenthood’s family planning clinics failed. In fact, the organization, the nation’s largest provider of women’s health services, has been gaining new members and supporters.
    American’s are even tiring of dogmatic no-new taxes pledges that only really apply to taxes on the wealthy. Voters in every poll show that the public wants a balanced approach to the public budget deficits – cuts and revenues. They want to see the end of the Bush tax cuts on the wealthy that cut a trillion dollar hole in the federal budget since 2001.
    And Norquists’s threats to destroy the careers of elected officials who support new taxes are now attracting enemies with the GOP’s own ranks. Allen Simpson, the former Senator from Wyoming, recently said that Norquist is an “egomaniac” with an agenda of “no taxes, under any situation, even if your country goes to hell.” Even the conservative New York Times columnist David Brooks wrote that Norquist “enforces rigid ultimatums that make governance, or even thinking, impossible.”
    Last month, seven Republican House members who had signed Norquist’s pledge announced that their commitment has expired. They reminded their supporters that Republicans once put country over party and ideology, and supported tax increases when absolutely necessary. Norquists’ no-tax pledge may very well take American off a fiscal and economic cliff. Will his corporate sponsors eventually wake up and realize that their own futures are intertwined with the fate of the entire country?
    Peter Dreier, who teaches politics and chairs the Urban & Environmental Policy Department at Occidental College, is author of The 100 Greatest Americans of the 20th Century: A Social Justice Hall of Fame, which Nation Books is publishing next year. Donald Cohen is the chair of In the Public Interest, a national resource center on privatization and responsible contracting. Dreier is chair and Cohen is director of the Cry Wolf Project, a nonprofit research network that identifies and exposes misleading rhetoric about the economy, regulation and government.