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At a certain level, it’s understandable to think the new White House budget plan is unimportant, or at a minimum, political theater. Given the far-right Republican majority in the House, there’s simply no way this budget will be approved by Congress, making the new White House document more of an opening bid than a realistic plan.
But don’t dismiss it too quickly. As a political document, President Obama’s budget tells us quite a bit about his priorities, his ideological goals, and what he intends to fight for, and in the process, it helps set the stage for the kind of fights we can expect to see over the next several months. Brian Beutler explained earlier:
Neither the GOP budget nor Obama’s counteroffer will — or are even intended to — become law. But they represent fresh bids in the ongoing fight between the parties over the scope of the safety net, and the question of whether the wealthiest people in the country contribute too much, or not enough, to the public purse.
The policies Obama will advocate are broadly popular; the GOP’s counter proposals are popular among their conservative supporters.
With that in mind, here are a handful of angles to keep an eye on as the budget fight unfolds in earnest:
* Domestic priorities: The White House budget intends to boost spending on “job-creation initiatives for infrastructure, job-training and innovation.”
* Taxes: Obama’s plan reflects the arguments the president has pushed for a long while,calling for “tax dividends of the wealthiest taxpayers as ordinary income subject to their top income-tax rate.” This idea alone, which Republicans hate with the heat of a thousand suns, would raise roughly $206 billion over 10 years.
* Oil companies: The oil and gas industries continue to enjoy generous taxpayer subsidies every year. The White House plan “would nix roughly $39 billion worth of tax breaks” over the next decade.
* Infrastructure: The administration’s budget would take money that was going to the wars in Iraq and Afghanistan and use it to nearly double investments in “U.S. highway, bridge and mass transit projects.”
* Deficit: Obama would use higher taxes on the wealthy, and fewer tax subsidies for oil companies, to help bring down the deficit. Overall, the White House plan would reduce the deficit by about $4 trillion over the next decade, though the White House plan prioritizes economic growth in the short term, and leaves debt reduction for another day.
* Striking a chord for budget honesty: If the White House were more inclined to rely on gimmicks, the deficit figures would look a lot better. Whereas Bush/Cheney consistently chose to ignore the cost of wars, the Medicare “doc fix,” and AMT costs to make it appear they were keeping deficits down, Obama’s team is playing it straight. This matters: “If the Obama White House had budgeted for2013 and beyond the way Mr. Bush had, its deficit forecast for 2022 would have been $167 billion, or 0.7 percent of the economy. Instead, because White House budget writers are adjusting for such costs, the deficit is forecast to be 2.8 percent of the economy that year, $704 billion.”
The politics of this larger fight would appear to favor the president — most of the American mainstream endorses Obama’s priorities, including higher taxes on the very wealthy — though that’s unlikely to persuade congressional Republicans.
President Obama’s proposed tax hikes and infrastructure spending for 2013 have grabbed headlines. But there’s a slew of other changes that Obama has proposed in his $3.8 trillion budget that are worth flagging as well. Here are a few of them:
1) Obama wants to change the composition of nickels and pennies to save money. The president’s budget would give the Treasury Department the ability to “change the composition of coins to more cost-effective materials,” pointing out the current cost of making the penny is 2.4 cents and the nickel is 11.2 cents. Of course, the value of the U.S. dollar isn’t pegged to the materials that it’s composed of, but it’s still a compelling argument on its face. The composition of U.S. coins hasn’t changed since 1981, the Wall Street Journal notes, while major components like zinc have become more expensive. Industry lobbyists stalled the proposal when Obama brought it up in 2010, but it may have new appeal to the frugally-minded.
2) All employees without an existing retirement plan would be be automatically enrolled in an IRA. Obama initially proposed this on the 2008 campaign trail — and nearly included it in his 2010 budget — but this appears to be his most aggressive push yet to implement the idea. Under the proposal, all employers who don’t currently offer a retirement plan to their workers “will be required to enroll their employees in a direct-deposit IRA account.” These employees would be automatically enrolled in an IRA plan unless they chose to opt out. Small employers would be exempt from the mandate, but they would receive up to $250 per year if they set up a retirement plan and employees choose to sign up. The idea is the brainchild of behavioral economist Richard Thaler and Cass Sunstein, head of Obama’s Office of Information and Regulatory Affairs, but opponents have deemed it too paternalistic and a burden for employers.
3) Obama would strengthen enforcement against illegal immigrants while reducing the number in detention. The president’s budget would ramp up funding for two immigration verification programs: E-Verify, which helps employers determine whether potential employees are legally able to work in the United States, and Systematic Alien Verification for Entitlements (SAVE), which helps public agencies verify the immigration status of those applying for federal, state and local government benefits. There aren’t any new mandates for requiring employers or the government to screen for immigration status or go after illegal immigrants. But the new changes would make E-Verify a more reliable system by allowing applicants to voluntarily “self check” and pinpoint errors in their documentation, and both programs are intended “to promote compliance with immigration laws while preventing individuals from obtaining benefits they are not eligible to receive,” according to the budget.
That said, Obama’s budget also seems to respond to pro-immigration advocates who’ve criticized the administration for putting too many non-criminal illegal immigrants in detention, despite its vow to target criminal offenders. His budget increases alternatives to detention — including electronic minority and “intensive supervision” — for illegal immigrants caught by Immigration and Customs Enforcement who are deemed low-risk. And the overall funding level for ICE would be cut by $193 million, with the promise that “as ICE continues to focus on criminal and other priority cases, it expects to reduce the time removable aliens spend in detention custody.”
4) He doubles down on making Wall Street pay for TARP.Obama has been proposing a “financial crisis responsibility fee” on big banks since 2010, but he’s doubled the amount from a year ago: He’s now proposing that the “largest financial firms” pay a total of $61 billion as part of the payback for the government bailouts they’ve received, in contrast to $30 billion a year ago. That’s partly because the projected cost of TARP has increased from a few months earlier: The White House now projects that the bailout will cost $68 billion, and the proposed fee on big banks would help cover that bill, along with an additional $10 billion for mass refinancing.
But banks — many of whom have already paid back their TARP loans and were not directly responsible for making bad loans to home owners — won’t be happy with this proposal. There’s also a debate over whether the White House’s price tag for TARP is too high: though Obama has lowered the fee since 2010 — when he proposed a $120 billion levy — it’s still significantly higher than the Congressional Budget Office’sestimated bill for TARP at $34 billion.
5) Obama lauds the Consumer Financial Protection Bureau, even though it has nothing to do with the 2013 appropriations process. The president’s budget isn’t just a list of numbers and policy proposals, but also a document to promote Obama’s accomplishments to the public. The traditional budgeting process doesn’t touch the CFPB — which is funded independently by the Federal Reserve, to the consternation of many Republicans — but Obama goes out of his way to praise and defend the new bureau, which is mentioned by name on six occasions in the 2013 budget.
His statements go straight to the heart of the controversy surrounding Obama’s recent recess appointment. “To ensure that consumers are protected, the President appointed Richard Cordray to head the CFPB,” the budget asserts. “Without a Director, the CFPB could not fully supervise non-bank financial institutions…this meant that tens of millions of Americans were left unprotected from falling prey to many of the harmful practices that contributed to the worst financial crisis since the Great Depression.”
The President’s budget would, if enacted, make significant progress in reducing deficits, although policymakers would have to take further steps, especially for future decades. Under its economic assumptions, it would achieve what most budget analysts, and all recent bipartisan commissions or panels, have identified as the crucial fiscal goal for the decade ahead — stabilizing the debt so that it no longer rises faster than the economy. To meet that goal, deficits must shrink to a bit less than 3% of Gross Domestic Product (GDP), and the President’s budget would stabilize deficits at 2.8% of GDP from 2019 through 2022. The budget also would stop the debt from rising as a share of the economy in 2014 and reduce it slightly as a share of GDP over the following eight years.
When the Congressional Budget Office (CBO) analyzes the Obama budget in coming weeks, it will likely show deficits under the budget somewhat above 3.0% of GDP, and the debt continuing to rise somewhat as a share of GDP because CBO’s current economic assumptions are more pessimistic than those of the White House Office of Management and Budget (OMB). Both sets of economic assumptions are in the range of mainstream economic forecasts; the differences between them reflect reasonable differences of opinion among economists about the long-term effect of the recent recession on future growth.
The costs and deficit numbers in the budgets of some previous Presidents could not be trusted for the “out-years,” because they omitted future-year costs for overseas wars and for continuing relief from the Alternative Minimum Tax and the scheduled deep cuts in Medicare payments to physicians. The Obama budget includes such costs in all years, making its out-year numbers more meaningful. If Congress enacted the Obama budget in full and its economic assumptions proved correct, the debt would stabilize over the coming decade although, as the White House acknowledges, policymakers would have to subsequently enact significant more deficit reduction to keep the debt stable in future decades.
The budget either achieves or approaches this key fiscal target for the coming decade with several trillion dollars in deficit reduction, through a balanced combination of spending cuts and revenue increases. In total, deficit reduction over the coming ten years (fiscal years 2013-2022) — through acombination of the proposals in the budget and measures enacted in 2011 — would equal about $4.3 trillion, not counting savings from reductions in costs for the wars in Iraq and Afghanistan. About three-fifths of these savings (not counting the savings from lower interest costs) would come from spending cuts, with about two-fifths coming from revenue increases, as compared to roughly a one-to-one ratio under the Bowles-Simpson plan. (The Bowles-Simpson plan is sometimes described as having a two-to-one ratio, but that ratio counts interest savings as a spending reduction and measures revenue increases from a baseline that already assumes the savings from the expiration of the high-end Bush tax cuts.)
Indeed, the composition of the deficit reduction under the Obama budget is actually to the conservative side of the Bowles-Simpson plan — it raises significantly less in revenues and reduces security spending much less than Bowles-Simpson would.
One striking feature of the Obama budget is the degree to which federal spending outside Social Security, Medicare, and Medicaid would fall as a share of GDP.
- Non-security discretionary spending would fall from 3.1% of GDP in 2011 to 1.7% in 2021 and 2022, the lowest level on record with data back to 1962.
- Spending for mandatory programs other than Social Security and Medicare — a budget category that includes the Medicaid program and the costs of the health reform law — would decline from 6% of GDP in 2011 to 5.5% in 2022.
- Entitlement and mandatory programs other than Social Security, Medicare, and Medicaid would fall from 4.2% of GDP in 2011 to 3.2% in 2022.
These figures underscore the significant restraint in the budget overall, outside of programs whose rising costs are driven by the aging of the population and the rise in health care costs throughout the U.S. health care system. Per-beneficiary costs have actually been rising faster under private-sector health insurance than under Medicare and Medicaid, reflecting the system-wide cost pressures throughout the health system.
While a detailed examination of the full array of proposals in the budget lies beyond this initial assessment, several deficit-reduction proposals merit a brief mention here. Among other things, the budget proposes:
- To save $156 billion over ten years by eliminating the excess prices that Medicare pays for prescription drugs prescribed for low-income beneficiaries. Before the 2003 prescription drug law, Medicaid provided drug coverage for low-income elderly and disabled people also enrolled in Medicare. The 2003 law shifted that coverage to Medicare while abandoning the features of Medicaid that secured low prices for those drugs by requiring drug manufacturers to pay rebates — on the theory that the private insurance companies in the Medicare drug program (Part D) would negotiate still-lower prices from drug manufacturers. This theory proved seriously mistaken, and Medicare is now paying considerably more to provide drugs to these beneficiaries than Medicaid used to pay. The President’s budget proposes to secure for Medicare the same price levels that Medicaid continues to get for the same drugs when they are prescribed for Medicaid recipients who are not elderly or disabled. This proposal also was included in the Bowles-Simpson plan. (But, due to opposition from the pharmaceutical industry, most congressional Republicans, and some congressional Democrats, this common-sense proposal is unlikely to move on Capitol Hill.)
- To save $119 billion from restoring the generous estate tax rules that were in place in 2009, under which the first $3.5 million of an estate for an individual — and the first $7 million for a couple — were entirely exempt from the tax, with only the estates of the wealthiest one-quarter of 1 percent of people who died subject to any estate tax at all. The tax-cut extension deal that President Obama and Congress enacted at the end of 2010 weakened the estate tax further, however, showering tens of billions of dollars of additional tax cuts on the estates of the top one-quarter of 1 percent of Americans. The Obama budget would end the additional estate tax cuts.
- To re-submit an important proposal from last year’s budget to reform the financing of the unemployment insurance system in order to strengthen its soundness and solvency, and to reduce the need for state unemployment insurance systems to borrow from the federal government in future recessions. This proposal would reduce the deficit by $47 billion over ten years. Unfortunately, amidst calls from House Republicans for UI “reforms” that would, among other things, impose drug-testing and educational requirements as a condition for benefit receipt — measures that CBO estimates would have no significant fiscal impact — this much more important and fiscally consequential package of UI reforms has been ignored. It should be at the center of any debate of reform of the unemployment insurance system to shore up the system for coming years and decades.
President Obama submitted his budget for fiscal year 2013 to Congress this morning, with the explicit goal of “rebuild(ing) our economy and strengthen(ing) the middle class.” The $3.8 trillion budget includes $5 million to help individual states launch paid leave programs – similar to those inCalifornia and New Jersey – that allow workers to take paid time off from work to provide care to a new child or ailing family member.
While some have argued that government intervention into work-family policies will only increase the cost of employing women, and that the marketplace will respond by voluntarily providing policies in order to retain valuable employees, the evidence does not support these arguments. At present, there are huge gaps in access to maternity leave for working women. According to the U.S. Census Bureau, between 2006 and 2008 about two-thirds of mothers with a bachelor’s degree or higher received paid maternity leave, but only 18.5 percent of those with less than a high school degree did. New mothers who have access to paid maternity leave are more likely to return to their previous employer, and 97.6 percent of those who return to the same employer do so at their previous pay level or higher. When women have to change employers after giving birth, often times because they are forced to quit or are fired in the absence of paid maternity leave, more than 30 percent experience a drop in pay.
New research on California’s Family Disability Insurance program illustrates how offering paid leave to women after childbirth helps individual workers and the economy as a whole. California’s program was passed in 2002, and became available to workers in July of 2004. Paid leave is administered through the State Disability Insurance program, and is funded through payroll taxes on employees. Eligible workers in California who take leave receive 55 percent of their regular pay, up to a maximum of $928 per week, for up to 6 weeks to bond with a new child or to care for a seriously ill family member.
California’s program has increased both job retention and the number of hours worked by employed mothers. More than 95 percent of workers who took leave in 2009 and 2010 returned to work; 80 percent returned to the same employer. Workers who made $20 an hour, meanwhile, returned to the same employer 83 percent of the time. And according to researchers from the University of Virginia and Columbia University, paid leave increased hours worked by mothers six to nine percent.
Working mothers are often the ones keeping their families afloat. The typical working wife now brings home 42.2 percent of her family’s earnings, and while married families with a male breadwinner and a female homemaker haven’t seen incomes rise since the 1970s (when adjusted for inflation), families with a working wife have seen incomes grow by 30 percent. Families where wives work, work longer hours, and receive higher pay are thus more likely to maintain their position on the income ladder or move up.
If every woman in America had access to paid leave when she had a baby, estimates are that this would increase employment by approximately 40,000 new mothers each year. Imagine how many families that would help raise up into the middle class, or secure their foothold there. If we are serious about repairing the economy, we must remember that a rebuilding a strong middle class is not just about helping the unemployed find work, but also about helping workers keep the jobs they already have. Paid family leave is one policy that can help us meet those goals.
In the previous post, I compared the tax rates under President Obama’s 2013 budget and Mitt Romney’s budget promises. But how about President Obama’s 2013 budget and the budget proposed by Paul Ryan and the House GOP?
Right now, revenues are 15.4 percent of GDP, and projected to rise, if current policies are simply extended, to 18.3 percent of GDP in 2022. Obama’s budget envisions revenues rising to 20.1 percent of GDP by then. In the Congressional Budget Office’s score (pdf) of Ryan’s budget, they projected revenues rising to 18.5 percent of GDP over the same time period.
Or let’s take debt. If current policies are extended, CBO projects public debt will rise to 94.2 percent of GDP by 2022. Obama’s budget would hold it to 76.5 percent. Ryan’s budget, according to CBO, would hold it to 70 percent. So Obama and Ryan’s budgets are fairly close on debt over the next decade.
Spending, however, is a different story. If current policies are extended, CBO estimates spending at 24.4 percent of GDP in 2022. Obama’s budget would hold it to 22.8 percent. And Ryan’s budget would keep it at 20.25 percent.
There are a few caveats to this. For one thing, the CBO looked at Ryan’s budget last April, and their economic outlook has worsened since then. If they ran the numbers on his proposal today, the dimmer economic outlook would likely lead to, at the least, more projected debt.
For another, many of Ryan’s harshest cost controls don’t kick in till well after 2022. His privatization and voucherization of Medicare, for instance. So his defenders might argue that projecting only a decade into the future unfairly cuts him off from his most radical savings, His detractors, meanwhile, could say that policies a decade into the future don’t account for much, and Ryan’s Medicare proposals are unlikely to work.
Note also that Ryan will be bringing out his 2013 budget in the coming weeks. So that will be helpful for getting a more apples-to-apples comparison.
Last week, Wisconsin Gov. Scott Walker (R) announced that he would use the funds his state received from a $26 billion mortgage settlement between 49 states and the nation’s largest banks to help balance the state’s budget, even though the settlement money was marked to help homeowners. In all, Walker will use $25.6 million of the $31.6 million Wisconsin’s state government receives to help close a budget shortfall.
Though Walker’s move to push struggling homeowners aside may seem radical, it is now being followed by at least one other state. Missouri Gov. Jay Nixon (D) and Attorney General Chris Koster (D) have pledged to put $40 million of the state’s $196 million share of the settlement into the state’s general fund to boost its higher education budget, Stateline reports:
Koster, a Democrat, told reporters on Thursday that he agrees with the governor’s call for more higher education funding and will transfer the $40 million Nixon has requested into the general fund, citing the “severe budget shortages” the state faces.
Though specific terms of the settlement have not been released, states have been given significant leeway on how to spend the money from it. According to the National Mortgage Settlement website, however, the money is supposed to “help fund consumer protection and state foreclosure protection efforts.”The full $26 billion, though, is already woefully short of what is needed to ameliorate the nation’s housing crisis, and diverting funds from it to other problems will only exacerbate that fact.
And while Nixon and Koster’s plan to boost higher education funding, which faces a 12.5 percent cut in Nixon’s proposed budget, is certainly a noble goal, there are other sources from which the money could come that wouldn’t jeopardize relief from homeowners. As the St. Louis Post-Dispatch pointed out in January, Missouri has a “propensity to hand out tax credits like legislative candy along a parade route.” Ending the credits, many of which go to corporations, could generate more than $500 million in new revenue, more than enough to restore the higher education budget without taking money from programs meant to help struggling homeowners.
The Republican primary field has recently decided to revive the Welfare Queen trope, perhaps in hopes that a bit of that old Reagan magic will rub off on them. The argument, as usual, is that there’s a vast stream of federal money going to people who are sitting on their asses eating Cheetos instead of going out and earning a living instead. These people are being bred into dependence on Uncle Sam’s tit and having their work ethics destroyed.
So CBPP decided to add up the numbers and figure out how much money the federal government spends on the nonworking poor. The answer: about 10% of all federal welfare spending. How did they come up with that? CBPP’s methodology uses Census data to figure out exactly where program dollars are going, but you can get pretty much the same answer using a simpler, easier-to-understand technique. Step One is to list every federal welfare program. Step Two is to deduct spending on the elderly, blind, and seriously disabled. That’s Social Security, Medicare, SSI, and about two-thirds of Medicaid. Step Three is to deduct spending that goes to the working poor. That’s unemployment compensation, EITC, and child tax credits. Step Four is to add up the rest. This overstates how much goes to the nonworking poor, since these programs are open to both working and nonworking families, but it gives you a rough idea.
It comes to about $235 billion, the bulk of which is SNAP (formerly food stamps) and about one-third of Medicaid. That’s 12% of all federal welfare spending and about 6% of the whole federal budget. Once you account for the fact that some of these program dollars go to the working poor, you end up with CBPP’s estimate of 10%, or about 5% of the whole federal budget.
Is that too much? I guess you have to decide for yourself. But I’ll bet most people think we spend a lot more than 5% of the federal budget on this stuff. They might be surprised to know the real numbers. The CBPP’s chart is below, with spending on the nonworking poor highlighted.
After a few hours of thought, Democrats have decided the GOP’s blink on the payroll tax cut is an unvarnished good, not some devious trick.
Republicans have all but agreed to renew the payroll tax cut through the end of the year without paying for it — a huge tactical swing for them. But they’re still insisting that the other expiring measures — extended unemployment insurance (UI), and Medicare physician reimbursements (the “doc fix”) — are somehow offset with cuts elsewhere.
Having taken the most politically important, and most costly item off the table, are Republicans in the driver’s seat in negotiations over extending the other two items? Not necessarily.
A senior Senate Dem aide explains how Democrats might well proceed from here.
“We might amend it [the unpaid-for payroll tax cut] with UI and doc fix over here and…the amends would be hard for Republicans to vote against, because we have worked with Republicans to find pay-fors for those pieces that are attractive to them.”
The doc fix and UI extensions cost together about $60 billion — Dems think they can cover that cost over 10 years in ways that Republicans will have to accept. If that’s correct, the whole saga could end with a quick ping pong game between the House and the Senate.
That is, unless Senate Republicans want to threaten the whole package by demanding more partisan financing provisions. But no GOP leader has been more sensitive to the political dangers of threatening this package than Senate Minority Leader Mitch McConnell — and there’s no reason to think he’d want to up the brinkmanship this time around.
When Mitt Romney bowed to political pressure and released his 2010 tax return, it showed, to no one’s great surprise, that the Romneys are rich. Really, really rich. They reported income of more than $21 million, itemized deductions of over $4.5 million, and a total tax bill of just over$3 million. They made charitable contributions of almost $3 million, although more than half of that went to their church.
But what really stood out in the tax return—beyond the presidential candidate’s 13.9 percent tax rate—is not that Mitt makes a lot of money, it’s that he has a lot of money. Romney’s finances are illustrative of the growing gulf between haves and have-nots. It’s not about income equality; it’s about the widening wealth gap.
In recent years, the fortunes of the Romneys and others in their cohort have continued to grow, notably diverging from the majority of Americans still struggling to deal with a slow economic recovery. The Occupy Wall Street protesters stole the media spotlight this past fall by creatively highlighting these discrepancies. President Obama has taken notice and, as reflected in his State of the Union address, is teeing up inequality as a major campaign theme for the fall. But it is not enough to highlight the gap between incomes of the top 1 percent and the bottom 99. What’s more alarming—and consequential over the long haul—is the growing concentration of wealth.
Recent estimates indicate that the while the top 1 percent earn 21 percent of the nation’s income, they possess 36 percent of total wealth. This is especially troubling because while income dictates how well you’re doing today, it is access to wealth (the stock of resources) that creates opportunities down the line. Wealth is the bundle of assets, investments, and savings that can be tapped at will and strategically deployed. Or it can be used to generate passive income, as it does for the likes of Warren Buffett and Mitt Romney. There certainly is an issue of fairness to consider. As long as we tax capital gains and dividends well below the tax rate on earnings gained through work, the rich will have much lower marginal tax rates than the rest of us.
There’s an additional problem. When wealth is concentrated at the top, there are fewer resources available for everybody else to deploy. And in the aftermath of the Great Recession, we should recognize that the dynamics of inequality have fundamentally shifted.
What’s the primary cause of our current and growing wealth gap? Home values, the largest item on most families’ balance sheet, remain depressed, while stock prices, the largest item on the balance sheet for those at the top, have rebounded. In short, Wall Street has recovered, Main Street has not. Consequently, in the last three years, the concentration of wealth has occurred at the expense of those in the middle. Economist Sylvia Allegretto estimates that the top 1 percent of households by wealth had a net worth 225 times greater than the median household in 2009. This is the highest ratio of wealth inequality on record and an increase of 24 percent since 2007. Without drastic changes in the market or in policy, the divergence between housing values and securities prices will be the main driver of wealth inequality for the foreseeable future.
One of the most dispiriting trends is a quickly expanding racial wealth gap. Prior to the recession, the average African American and nonwhite Hispanic families owned 10 percent of the wealth of the average white families. But the recession has hit hard. Not only do minority families have larger shares of their assets held as housing equity, they are also more likely to live in communities hard hit by foreclosures and housing price drops. New findings from Pew Charitable Trusts estimate that this figure has been cut in half: Minority families now own a nickel for every dollar of their white counterparts.
Low wealth holdings have been linked to poor health and educational outcomes, which undermine economic mobility as well as national economic growth. Without policy efforts to get working families out from the overhang of debt and empower them to save and invest, wealth inequality will persist and undercut opportunities for families to move up the economic ladder.
The first step in changing this trajectory is to help families rebuild their balance sheets wrecked by the recession. This will require a large-scale effort to modify loans of families with underwater mortgages. This means reducing the principal owed and not just lowering the interest rate or extending the term. Currently, consumers behind on their credit obligations may file for bankruptcy to protect some of their assets, but primary mortgages are exempted. Bankruptcy laws should be changed to allow judges to lower the principal and interest rate on outstanding mortgages.
Another way to ensure families have greater opportunities to save and build wealth is to let Richard Cordray and the new Consumer Financial Protection Bureau do their job. The mandate of this new agency is to make sure families have access to high-quality and low-costfinancial products, rather than ones that rip them off. It would also be a good idea to support widespread financial education programs in high schools and in the workplace. To fund these efforts, we can raise the tax rate of capital gains to bring it more in line with income, lessening the advantages conferred on those that have already accumulated wealth.
The OWS demonstrators have performed a valuable public service. They have initiated a conversation about how the distribution of wealth, income, and power correspond to our common values. Fundamentally, radical wealth inequality is incompatible with a meritocracy and undercuts our national creed that everyone has the opportunity to succeed. In response, we should design policy interventions that minimize household debts and democratize savings and investment opportunities. This is not the politics of envy. Few are asking Romney to apologize for his success (although some may be asking where their jobs went). But if America is to be a country where success is not determined by circumstances of race, class, or birth, he should have to pay his fair share.
Some conservative critics of federal social programs, including leading presidential candidates, are sounding an alarm that the United States is rapidly becoming an “entitlement society” in which social programs are undermining the work ethic and creating a large class of Americans who prefer to depend on government benefits rather than work. A new CBPP analysis of budget and Census data, however, shows that more than 90 percent of the benefit dollars that entitlement and other mandatory programs spend go to assist people who are elderly, seriously disabled, or members of working households — not to able-bodied, working-age Americans who choose not to work. (See Figure 1.) This figure has changed little in the past few years.
In a December 2011 op-ed, former Massachusetts Governor Mitt Romney warned ominously of the dangers that the nation faces from the encroachment of the “Entitlement Society,” predicting that in a few years, “we will have created a society that contains a sizable contingent of long-term jobless, dependent on government benefits for survival.” “Government dependency,” he wrote, “can only foster passivity and sloth.” Similarly, former Senator Rick Santorum said that recent expansions in the “reach of government” and the spending behind them are “systematically destroying the work ethic.”
The claim behind these critiques is clear: federal spending on entitlements and other mandatory programs through which individuals receive benefits is promoting laziness, creating a dependent class of Americans who are losing the desire to work and would rather collect government benefits than find a job.
Such beliefs are starkly at odds with the basic facts regarding social programs, the analysis finds. Federal budget and Census data show that, in 2010, 91 percentof the benefit dollars from entitlement and other mandatory programs went to the elderly (people 65 and over), the seriously disabled, and members of working households. People who are neither elderly nor disabled — and do not live in a working household — received only 9 percent of the benefits.
[…] The big Times report on dependence on government benefits was a fine piece of reporting. One thing that caught my eye, of course, was the statement that some of the areas most dependent on government benefits are also the most Republican and anti-government. I noted this point long ago, and was by no means the first person to do so. Still, I would have liked a bit more documentation; so I’ve done some myself.
Below the fold, from the IRS and from the BEA, is the ratio of taxes paid to Washington to personal transfers received, with states ranked by the ratio (there may be an issue with intra-state transfers, but I doubt it makes much difference):
So are states that get a lot but don’t pay much also states that vote for candidates demanding self-reliance and an end to Big Government? Basically, yes. By my reckoning, 7 of the most dependent states in the sense that they pay relatively little while receiving a lot went for McCain in 2008; only 2 of the least dependent states did.
President Barack Obama called on Congress Monday to create an $8 billion fund to train community college students for high-growth industries, giving a financial incentive to schools whose graduates are getting jobs.
The fund was part of Obama’s proposed budget for 2013. The overall package aims to achieve $4 trillion in deficit reduction over the next decade by restraining government spending and raising taxes on the wealthy, while boosting spending in some areas, including education.
Obama warned Congress that blocking investments in education and other proposals in his budget would be standing in the way of “America’s comeback.”
“By reducing our deficit in the long term, what that allows us to do is to invest in the things that will help grow our economy right now,” Obama said during remarks at Northern Virginia Community College.
The White House says the “Community College to Career Fund” would train 2 million workers for jobs in potential growth areas such as electronic medical records and cyber security within sectors such as health care, transportation and advanced manufacturing.
A key component of the community college plan would institute “pay for performance” in job training, meaning there would be financial incentives to ensure that trainees find permanent jobs — particularly for programs that place individuals facing the greatest hurdles getting work. It also would promote training of entrepreneurs, provide grants for state and local government to recruit companies, and support paid internships for low-income community college students.
Obama said community colleges needs resources to become community career centers where students can learn skills that local businesses need immediately.
“This should be an engine of job growth all across the country, these community colleges, and that’s why we’ve got to support them,” Obama said.
Obama pointed to programs in Louisville, Ky., Charlotte, N.C., and Orlando, Fla., as good examples.
UPS overnight workers in Louisville get a tuition-and-book benefit at the University of Louisville or Jefferson Community and Technical College as part of a program designed to help the company recruit and retain workers. Central Piedmont Technical College in Charlotte created a two-year degree in mechatronics, whichcombines skills in mechanical, electrical and computer fields. In Orlando, Northrop Grumman has aggressively hired laser technicians who completed a program developed by Valencia College because of demand.
Education Secretary Arne Duncan told reporters on a conference call that the specifics of the pay-for-performance aspect of the plan are still being hammered out, but it’s possible that about $500 million would go toward rewarding programs that successfully place workers.
Rep. John Kline, R-Minn., the chairman of the House Committee on Education and the Workforce, said in a statement that he’s “skeptical” of the president’s plan, but that Republicans support the goal of modernizing federal job training programs.
“The committee will give the president’s proposal the consideration it deserves,” Kline said.
Blake Clayton, an energy fellow at the Council of Foreign Relations, says that not enough people appreciate just how stunning the recent boom in U.S. exports of refined petroleum products really is. Here’s a historical chart showing that we’ve gone from a huge net importer to a huge net exporter in just a few short years:
Now, remember, this is just an increase in refined products. The U.S. is still a colossal net importer of crude oil, in part because overall U.S. oil production has sharply plunged from its peak back in the 1960s, even after the recent (and comparatively small) surge in shale oil production in North Dakota and elsewhere. But our refineries are now doing big business abroad, and it’s one reason why overall exports have been ticking upward lately. And this hasn’t happened in decades: The last time the U.S. was a net exporter of finished gasoline was way back in 1959.
So why is this happening? Clayton offers some theories: “First, North American oil production gains have reduced the country’s reliance on imported oil — not just products, but crude as well — as more oil came from Canadian and U.S. sources. Second, economic growth in Central and South America that outpaces that of the United States is leading to quicker fuel consumption growth in these markets, which is pulling additional volumes south of the border. Third, geographic proximity and highly efficient refining capacity in the Gulf of Mexico means that growing oil streams, from Canadian heavy to U.S. unconventional, are being sent to the Gulf, from which refined products are then sent outward. Fourth, U.S. law mandating the use of ethanol as a gasoline additive has reduced domestic demand for conventional gasoline and boosted supply.”
I’d also add that Americans have been driving less since the 2008 oil shock and financial crisis (and, according to data from the University of Michigan’s Michael Sivak, buying increasingly fuel-efficient cars), which has kept domestic demand for gasoline down.
RH Reality Check:
Lately the water cooler conversations at my religiously-affiliated nonprofit social service agency have been focused on trying to understand the new HHS contraceptive mandate. My younger, female coworkers and enlightened male coworkers are giddy with anticipation. For as long as any of us have been working here, we haven’t been able to get coverage for our birth control and have even had to struggle to get our employer to cover contraception prescribed for conditions like polycystic fibrosis and dysmenorrhea.
When a coworker with a cancer-causing condition needed contraception, she didn’t know what to do. She couldn’t afford the medication out-of-pocket with her meager nonprofit salary. I called our HR Director on her behalf. It took weeks to get an answer. Meanwhile my coworker couldn’t fill her prescription and her condition got worse. Recently I found out that another coworker has been paying $90 a month out-of-pocket for the contraception she needs to treat her polycystic fibrosis.
HR then told us that we would have to ask permission of the agency’s CEO on a case-by-case basis. It reminded me of when I first got my period at age 12. My cramps were so bad that my pediatrician recommended low-dose contraception. My non-Catholic mother said that my very Catholic father might not allow it and that I would need to ask him for permission. The only difference here is that we are not young girls and the CEO is not our father.
I pursued my coworker’s issue with our agency’s lawyer. She acknowledged that the agency had to cover the contraception in this situation, and she finally intervened and informed HR that they needed to cover it. A year later, I too needed to get contraception for dysmenorrhea, so when I asked for coverage I ended up in battle with a male HR employee that knew nothing about the earlier situation. It was embarrassing to have to reveal my medical condition to him. The ground I thought I covered last year had been lost it seemed, making it a continuously frustrating battle.
When I finally got a clear answer, I requested that the agency develop a protocol and send it out to our thousands of staff throughout the city. They refused.
We’re relieved that with today’s announcement from President Obama, by this time next year, the HHS mandate will allow us to make our own decisions about whether or not to take birth control. We will consult our own consciences, informed by our own health needs, and our own religious and moral convictions, not the religious beliefs of a distant religious figure. As U.S. Sen. Kirsten Gillibrand recently said, “whether or not to take birth control is the woman’s choice, not her boss’s.”
President Barack Obama on Monday proposed more aggressive deficit reductions through savings from Medicare, Medicaid and other federal healthcare programs than the White House put forward just five months ago.
Obama’s $3.8 trillion federal budget proposal for fiscal year 2013 seeks more than $364 billion in savings from lower healthcare spending over the next 10 years, nearly all of it from Medicare and Medicaid, the national government health programs for the elderly and poor, respectively.
Savings would come from a menu of cost-cutting and efficiency measures proposed in September, including Medicare drug rebates, reductions in payments to doctors and hospitals, higher costs for wealthier retirees, a shift in Medicaid costs to states and a continued crackdown on waste and fraud.
The deficit reduction target is $44 billion, or about 14 percent higher than the savings that Obama proposed last year, when the congressional “super committee” searched for a deal to reduce the nation’s ballooning debt.
The Pharmaceutical Research and Manufacturers of America issued a statement calling the proposal “a short-sighted proposition that could destabilize the program and threaten hundreds of thousands of American jobs.”
While seeking deficit reduction from entitlement spending, the new fiscal blueprint would shift more tax dollars to the Centers forMedicare and Medicaid Services, an agency working with states to set up health insurance exchanges meant to extend coverage to an estimated 34 million uninsured Americans under the Patient Protection and Affordable Care Act.
The plan would give the agency a $4.8 billion budget for the fiscal year beginning next October 1, an increase of nearly $1 billion, or 26 percent from this year. About 87 percent of the new money would go to fund state exchanges, which are required to be up and running in January 2014.
But the Obama budget is not expected to win approval in Congress, where Republicans hope to defund the implementation of healthcare reform. HHS still has about half of a $1 billion appropriation from 2010 and expects to spend the funds on exchanges and other reforms this year.
The proposed budget lays out in detail many of the Democratic president’s priorities as he seeks re-election in November. For the fourth year in a row, the annual U.S. budget deficit is expected to exceed $1 trillion. The White House projects an easing of the shortfall the following year.
Healthcare reform is unpopular with many voters and Republicans have accused the administration of cutting Medicare to finance reforms.
“The president has failed to offer a single serious idea to save Social Security and is the only president in modern history to cut Medicare benefits for seniors,” Republican presidential candidate Mitt Romney said in a statement on Monday.
The White House said its new proposals would extend by two years the solvency of Medicare’s Hospital Insurance Trust Fund, which finances hospitalization benefits. Government forecasts released last year said the fund would be exhausted in 2024.
Nation of Change:
Little did Willie Nelson know when he recorded “Crazy” years ago just how crazy it would become for our cherished family farmers in America. Nelson, President of Farm Aid, has recently called for the national Occupy movement to declare an “Occupy the Food System” action.
Nelson states, “Corporate control of our food system has led to the loss of millions of family farmers, destruction of our soil…”
Hundreds of citizens, (even including NYC chefs in their white chef hats) joined Occupy the Food System groups, ie Food Democracy Now, gathered outside the Federal Courts in Manhattan on January 31st, to support organic family farmers in their landmark lawsuit against Big Agribusiness giant Monsanto. (Organic Seed Growers & Trade Association v. Monsanto) Oral arguments were heard that day concerning the lawsuit by 83 plaintiffs representing over 300,000 organic farmers, organic seed growers, and organic seed businesses.
The lawsuit addresses the bizarre and shocking issue of Monsanto harassing and threatening organic farmers with lawsuits of “patent infringement” if any organic farmer ends up with any trace amount of GM seeds on their organic farmland.
Judge Naomi Buckwald heard the oral arguments on Monsanto’s Motion to Dismiss, and the legal team from Public Patent Foundation represented the rights of American organic farmers against Monsanto, maker of GM seeds, [and additionally, Agent Orange, dioxin, etc.]
After hearing the arguments, Judge Buckwald stated that on March 31st she will hand down her decision on whether the lawsuit will move forward to trial.
Not only does this lawsuit debate the issue of Monsanto potentially ruining the organic farmers’ pure seeds and crops with the introduction of Monsanto’s genetically modified (GM) seeds anywhere near the organic farms, but additionally any nearby GM fields can withstand Monsanto’s Roundup herbicides, thus possibly further contaminating the organic farms nearby if Roundup is used.
Of course, the organic farmers don’t want anything to do with that ole contaminated GM seed in the first place. In fact, that is why they are certified organic farmers. Hello? But now they have to worry about getting sued by the very monster they abhor, and even have to spend extra money and land (for buffers which only sometimes deter the contaminated seed from being swept by the wind into their crop land). At this point, they are even having to resort to not growing at all the following organic plants: soybeans, corn, cotton, sugar beets, and canola, …just to protect themselves from having any (unwanted) plant that Monsanto could possibly sue them over.
This post from The Independent helps explain why Rupie has hired a former US Justice Department and White House counsel, among others, to defend his, er, um, honor [sic].
Rupert Murdoch’s global empire is set to face new legal action in the US over alleged illegal practices by News Corp journalists. The lawyer at the heart of the phone-hacking scandal in the UK, Mark Lewis, who was instrumental in exposing the scale of illegal voicemail accessing at the News of the World, is in the “advanced stages” of bringing his first case against News Corp on the other side of the Atlantic.
The news comes as Mr Murdoch prepares to fly to London following a series of arrests of senior Sun journalists. […]
... Rupert Murdoch, is already being viewed, according to one News Corp executive, as “five-star crisis management” with the future of The Sun on the line.
Can you say “slo-mo schadenfreude”? […]
The Independent has more, so give yourself a treat and link over.
The Obama administration called it an “accommodation,” but the media had a slew of other ways to describe President Barack Obama’s change on Friday to a rule requiring faith-affiliated employers to provide free contraception. Here’s a look at 14 different ways the media characterized the announcement:
1.“Obama backtracks on contraception mandate” – Washington Times
2.“Obama shifts course on birth control rule to calm Catholic leaders’ outrage” – Washington Post
3. “Obama retreats on contraception” – Wall Street Journal
4. “Obama announces contraception compromise” – CNN.com
5. “Obama amends contraception rule amid backlash” – New York Post
6. “Obama blinks on contraception rule” – ABC News
7. “Obama, seeking to quell birth control furor, shifts cost to insurers” – Christian Science Monitor
8. “Obama adjusts a rule covering contraception” – New York Times
9. “Obama tweaks birth control rule” – USA Today
10. “Obama bends on birth control mandate” – Boston Globe
11. “Obama: Contraception rule change a ‘solution that works for everyone’” – Real Clear Politics
12. “White House announces ‘accommodation’ on birth-control issue” – The Atlantic
13. “W.H. caves: Obama to announce ‘accommodation’ on contraception rule – Drudge
14. “Obama tries to quell birth-control furor” – POLITICO
Romney under pressure to tout his social conservatism: Hislatest:
“I want people to remember that I was on the front lines on conservative social issues, on conservative fiscal issues, and standing up for conservative foreign-policy values. I wanted to reacquaint people with what they remember from four years ago.”
Christian Heinze debunks. This quote, combined with his claim Friday that he was a “severely conservative” governor of Massachusetts, remind us yet again how much pressure Rick Santorum’s presence is placing on Romney to do a better job connecting with social and religious conservatives.
* Romney lured on to social conservative turf: Relatedly, Glen Johnson notes that the “severely conserative” quote only reveals the ways that the looming battle over social conservative credentials is terrible terrain for Romney.
My question: At what point does this backfire? At what point do conservative rank and file voters hearing this stuff realize that Romney is treating them like idiots?
* Is Romney really the most electable GOPer? Also: Michael Barone’s piece is worth a read because it provides a glimpse into the deliberations of conservatives as they try to determine whether Romney is really the most electable against Obama.
As Barone points out, Santorum’s case for electability is equally plausible, thanks to SantorRomney’s “unforced errors and political tin ear,” which ensure (as I’ve argued) that he’ll struggle among blue collar whites.
* Santorum surging in … Michigan? If there’s anything to this, it will be a big deal: The robo-polling firm Public Policy Polling is set to releasea new poll showing Santorum up by as much as 15 points in Michigan, where Romney has deep roots.
Key footnote: Romney recently tried to lower expectations for his performance in Michigan by fibbing about his 2008 margin of victory in the state.
[…] A Republican source confirms to me that Romney’s camp bought registrations at CPAC to ensure their victory at the straw poll. There was also a more visible presence. Two young men, one who identified himself as a staffer but declined to talk and another who said he was a volunteer, held up Romney signs Saturday morning near the entrance to the ballroom and urged attendees to vote for the former Massachusetts governor.
Romney’s effort to win the vote was first reported by Jeff Zeleny, who wrote in the NYT Saturday that the campaign was “busing students from colleges along the Eastern Seaboard to show their support.”
Now that Obama has reached an accommodation on birth control that has won some support on both sides of the debate, could it now become a wedge issue against the GOP, as I speculated the other day?
Mitch McConnell vowed over the weekend to turn the battle against Obama’s proposal into a crusade that won’t end until the White House backs down. But as Igor Volsky notes, two GOP Senators — Olympia Snowe and Susan Collins — have voiced cautious support for Obama’s compromise, breaking with the idea that it’s an assault on religious liberty.
Snowe: “It appears that changes have been made that provide women’s health services without compelling Catholic organizations in particular to violate the beliefs and tenets of their faith.”
Collins: “While I will carefully review the details of the president’s revised proposal, it appears to be a step in the right direction…The administration has finally listened to the concerns raised by many and appears to be seeking to avoid the threat to religious liberties posed by its original plan.”
Make no mistake: This dynamic will be crucial going forward. If more Republicans decide that Obama’s proposal is politically or substantively difficult to attack, it could encourage Dems to express greater unity behind the plan, and further marginalize opponents of it, making it tougher to continue this fight.
So where are Senators like Kelly Ayotte, Lisa Murkowski, and Scott Brown on this? A spokesman for Murkowski declined comment. It’s hard to imagine Brown, who’s facing a tough challenge from Elizabeth Warren in Massachusetts, voicing opposition to the idea — as McConnell put itover the weekend — that requiring insurers to cover birth control as a health care expense for women constitutes interfering “with your religious beliefs.”
Also: What vehicle will Republicans support? Will they back the amendment offered by GOP Rep. Roy Blunt, which would allow either employers or insurers to deny any health coverage they find morally objectionable, at a time when polls show that requiring employers to cover birth control is backed by nearly six in 10 independents and nearly seven in 10 women?
UPDATE: Senator Ayotte has just come out against Obama’s proposal. Here’s her statement, sent over by her office:
“The president’s proposal leaves religious institutions vulnerable to federal coercion. This debate has always been about religious freedom. As I fight for a full repeal of Obamacare, I will continue to push for a legislative solution that protects conscience rights.”
UPDATE II: Here’s the response from John Donnelly, a spokesman for Senator Scott Brown:
“Senator Brown appreciates President Obama’s willingness to revisit this issue, but believes it needs to be clarified through legislation. The senator signed onto bipartisan legislation that writes a conscience exemption into law, which is an important step toward ensuring that religious liberties are always protected.”
UPDATE III: Brown spokesman Donnelly confirms that the Senator supports GOP Rep. Blunt’s legislation.
Making it easy for us to debunk is incredibly smart. I’m always googling to refute wingnut emails and this just makes it one stop shopping.
President Obama’s re-election team is seeking help from Internet and on-the-ground backers to spread the word about Obama’s record in office, and to bash his Republican critics.
The purpose of the “Truth Team” is to “promote the president’s achievements, respond to attacks on his record and hold the eventual Republican nominee accountable,” said the announcement from the Obama re-election team.
The overall website — BarackObama.com/TruthTeam – includes three specialty websites: KeepingHisWord.com (devoted to Obama’s record), KeepingGOPHonest.com (attacking Republicans), and AttackWatch.com (responding to critical GOP ads).
“The sites also contain tools for sharing materials via Facebook, Twitter and e-mail, and empowers supporters to take further action by volunteering, writing letters to the editor, sending postcards to undecided voters with information about the president’s record, and more,” said the Obama announcement.
[…] While Mr. Romney’s broad positions onfinancial regulation, taxes, energy and other issues are shared by other Republican candidates, they have also not infrequently overlapped the interests of his advisers’ clients.
John M. Herrmann II, a co-chairman of Mr. Romney’s trade policy advisory group, is a lobbyist for Allegheny, a major steel producer whose products have figured in United States trade lawsuits against China. Mr. Romney’s platform calls for a more aggressive posture with China on trade, including more “punitive measures to deter unfair Chinese practices.”
Mr. Talent’s firm, Mercury Public Affairs, represents one of the largestcoal producers in the country, Peabody Energy. That connection is not disclosed in a commentary that Mr. Talent contributed to Mr. Romney’s energy platform, which calls for increasing production of coal and oil and amending the Clean Air Act to exclude carbon dioxide from environmental regulation.
A number of Mr. Romney’s donors, including at least four of his bundlers, have lobbied for financial companies on the Dodd-Frank Act, which tightened Wall Street regulation. Mr. Romney has called for repealing the law.
They include Mr. Berman, who represents the Blackstone Group private equity firm. Blackstone’s founder, Stephen A. Schwarzman, has co-hosted major fund-raisers for Mr. Romney in New York and Palm Beach, Fla., and Blackstone employees donated at least $86,850 to Mr. Romney last year.
Mr. Weber began advising Mr. Romney on foreign policy in August. He is a lobbyist for the Council on Pakistan Relations, which has sought to protect United States aid to Pakistan as relations between the countries have soured.
In a debate in November, Mr. Romney said he wanted the United States to “bring Pakistan into the 21st century” to help the country “engage throughout the world with trade and with modernity.”
In an interview, Mr. Weber said he participated regularly in the campaign’s broad policy discussions, but “I’ve never spoken to Romney or anyone on the campaign about anything related to Pakistan.”
He suggested that Washington lobbyists — many of them with significant experience in the executive branch, on campaigns or on Capitol Hill — would continue to be an important source of advice for candidates.
Even with the president’s approval rating showing signs of life and the Republicans busily bashing themselves over the head — “one is a practicing polygamist and he’s not even the Mormon,” retired Supreme Court Justice Sandra Day O’Connor recently quipped about her party’s two frontrunners — America continues to track right, according to polling data released by the Gallup Organization last week.
Americans at this political moment are significantly more likely to identify as conservative than as liberal: conservatives outnumber liberals by nearly two to one. Forty percent identify as conservative, 36 percent as moderate, and 21 percent liberal.
The map above charts the ideological divide across America’s states. There are four states where conservatives make up more than half the population: Mississippi, Utah, Wyoming, and Alabama. Conservatives make up more than 40 percent in 20 more states. Liberals now outnumber conservatives in just one state, Massachusetts, and the District of Columbia.
Last March, I took an in-depth look at the factors that might be associated with America’s increasingly conservative ideological cast; I update that analysis here with Gallup’s year-end data. The ongoing economic crisis only appears to have deepened conservatism’s hold. America is becoming a more conservative nation, at least at the state level.
My MPI colleague Charlotta Mellander ran a series of correlations on a range of political, economic, demographic and other factors. The associations we found, I hasten to add, are just that — associations; correlation does not show causation. Nonetheless, they reflect the deep cleavages of income, education, and class that divide America.
As before, conservative states are considerably more religious than liberal-leaning states. The correlation between conservative political affiliation and religion (the share of state population for which religion is an important part of daily life) has grown stronger, increasing from .63 to .70.
The correlation between religion and the increase in conservatism over the past year is also considerable. As American states become more religious, they also become more conservative.
Conservative states are also less educated than liberal ones. The correlation between conservative affiliation and the percent of adults who are college graduates) is also substantially higher than before (-.76 vs. -.53), as is the correlation between human capital and the increase in conservatism (-.79).
States with more conservatives are less diverse. Conservative political affiliation is highly negatively correlated with the percent of the population that are immigrants (–.56), or gay and lesbian ( -.60). There is no correlation to race or ethnicity, however, whether measured as percent white, percent black, or percent Hispanic.
Class continues to play a substantial role. Conservative political affiliation is strongly positively correlated with the percentage of a state’s workforce in blue-collar occupations (.73), and highly negatively correlated with the proportion of the workforce engaged in knowledge-based professional and creative work (-.61). Both are also associated with the tilt toward conservatism in the past year.
States with more conservatives are considerably less affluent than those with more liberals. Conservative political affiliation is highly negatively correlated with state income levels (-.73) and even more so with average hourly earnings (- .77). This is in line with the findings of Andrew Gelman’s Red State, Blue State, Rich State, Poor State, which finds that while rich voters favor Republicans, rich states favor Democrats.
That said, conservatives across America appear to be split along class and income lines when it comes to the issue of whether government should provide help for the poor. According to asurvey conducted by the Pew Research Center, more than half (57 percent) of lower-income Republicans (those with family incomes of less than $30,000) said that government does not do enough for the poor, while less than one in five (18 percent) said it does too much. Richer Republicans (those with incomes of $75,000 or more), perhaps not surprisingly, overwhelmingly think government does too much.
The ongoing economic crisis only appears to have deepened America’s conservative drift – a trend which is most pronounced in its least well off, least educated, most blue collar, most economically hard-hit states.
Reporters covering the GOP primary horse race may have moved on, but a key question continues to dog Mitt Romney’s presidential campaign — one that will loom large if he wins his party’s nomination. Has he avoided U.S. taxes by investing a fortune offshore?
At a town hall event in Maine on Friday, an antagonistic questioner asked Romney, “Do you think it’s patriotic of you to stash your money away in the Cayman Islands?”
In response, Romney correctly noted that money U.S. taxpayers invest offshore is largely taxed just as it would be if they invested it in the states. But he once again denied avoiding any U.S. taxes by investing offshore — a claim tax experts openly doubt.
Every dollar that’s in any enterprise, whether it’s foreign or domestic, you have to pay U.S. taxes on it. You might think you can put your money somewhere else and you don’t pay U.S. taxes – of course you do. And the blind trustee, meeting with the media, said, Mr. Romney has paid all U.S. taxes, I have not saved one dollar by having an investment somewhere beside this country.
But this doesn’t always have to be true. As we’ve explained here repeatedly, Romney’s massive individual retirement account could very easily have avoided a significant (35 percent) tax called the unrelated business income tax (UBIT), if it is invested in any offshore entities that finance their own investments with debt. Tax exempt vehicles like the IRA are subject to the UBIT when they invest in companies that use leverage here in the U.S. But they can avoid the UBIT altogether by investing in companies that use leverage in other countries.
Romney’s camp has declined to address this question directly, despite growing attention from segments of the media — most recently the New York Times. If it turns out he has avoided this tax, it will puncture the central defense of his offshore investments.
Last week, in the wake of Rick Santorum’s Tuesday Night Massacre, Barb asked “What’s next for Mitt Romney?” The answer, helpfully supplied by Romney’s own campaign, was that Romney planned to attack Santorum just like he attacked Newt Gingrich. His campaign even called Rick and Newt “two peas in a pod” and Romney himself accused Rick Santorum of having “acted like a Democrat.”
Well, the attacks aren’t working. Between the fact that Rick Santorum isn’t nearly as toxic to Republicans as Newt Gingrich and the fact that Romney damaged his own brand by going negative in Florida, Romney’s playbook is in serious trouble, and conservatives aren’t keeping quiet about it.
Today, National Review‘s editors accused Romney of “trying to win the nomination by pulverizing his rivals,” adding that “his attacks on Santorum have been lame, perhaps because they are patently insincere.” Richard Land, an evangelical conservative leader who hasn’t endorsed a candidate, said Romney would be making a terrible mistake to go nuclear on Santorum. “Santorum’s a much more likable figure and a much harder figure to demonize than Newt Gingrich was,” Land told Politico. “If he does that, there’ll be a backlash.” And Byron York reports that late last week a group of conservatives at CPAC informed Romney that he shouldabandon his attack-dog strategy against Santorum.
All of that makes a fair bit of sense: Romney shouldn’t expect beat Santorum by running his anti-Gingrich playbook from Florida. If he goes all-in on negative campaigning, he’s likely to cause at least as much damage to his campaign as he is to Santorum’s.
But as Adam Bonin points out, that still leaves Romney with a problem, given that the people who vote in Republican primaries and caucuses are, well, Republicans.
He can’t attack Santorum for being too conservative and less electable — which would be truthful — and is stuck with lame attacks on Santorum’s having actually served in the federal government. Other than that, Romney just has bio to run on.
And between Bain Capital and RomneyCare, in the view of most Republicans, Mitt Romney doesn’t have the most attractive bio to run on.
A year ago, Republican capture of the Senate in the 2012 election was regarded as close to a sure thing. The political direction of the country had shifted in favor of Republicans. Democrats faced the unenviable task of defending 23 seats, Republicans only 10. And 8 of the GOP seats were safely in Republican hands.
Now Republican prospects are not as rosy. The odds on a Republican Senate are no worse than 50-50, maybe better. But the effort to oust Democrats, who currently control the Senate 53-47, looks more difficult than it did.
What has changed? Most significant may be President Obama’s improved chances of reelection. He has enormous liabilities, but he has managed to alter the political environment enough to make Republicans and the rich a live issue in the campaign. Before, his record in the White House, especially on the economy, was the lone issue.
Pollster Scott Rasmussen says how Obama fares will affect Senate races. The relationship is pretty simple. If Obama is reelected, Democrats are likely to hold the Senate. If the Republican nominee wins, Republicans are odds-on to take over the Senate, while retaining the House.
Jennifer Duffy of the Cook Political Report, a savvy analyst of congressional races, says the outcome of four Senate races may depend on Obama’s fate: Virginia, Montana, Massachusetts, and Nevada. Notice that two of those states have Republican incumbents, Scott Brown of Massachusetts and Dean Heller of Nevada. Republicans can lose one of those seats and still take the Senate, but probably not both.
Another impediment to a Republican Senate is Democratic success in recruiting strong candidates. North Dakota was considered a certain GOP takeover for Rick Berg, a House Republican freshman, until Heidi Heitkamp, a former state attorney general, jumped into the race. Democrats are talking up a poll that shows her leading Berg, but Heitkamp has striking vulnerabilities—like her strong support of the president and Obamacare. The betting is still on Berg.
In the open Democratic seat in Virginia, Democrats got their best possible candidate, former governor Tim Kaine. That he was Obama’s first Democratic national chairman won’t help him, but he is a clever politician and a strong campaigner. Last week, for instance, he sided with the Catholic church in its battle against Obama’s Department of Health and Human Services—and made sure his criticism got reported in the press. “I think the White House made a good decision in including a mandate for contraception coverage in the Affordable Care Act insurance policy,” Kaine said, “but I think they made a bad decision in not allowing a broad enough religious employer exemption.” Republican George Allen, seeking reelection after losing his Senate seat in 2006, will have his hands full (in the likely event he defeats Tea Party candidate Jamie Radtke for the nomination).
Republicans were relieved when former Democratic senator Bob Kerrey declined to run in Nebraska, where Democrat Ben Nelson is retiring. They shouldn’t have felt threatened. “Nebraska has changed,” Duffy says, since Kerrey left the Senate in 2001. Nebraska isnow a GOP slam dunk.
There’s one other obstacle confronting Republicans. They may need a five-seat pickup to be assured of a working majority in the Senate. If Obama is reelected and Republicans win three Senate seats, ties will be broken by Obama’s vice president. Result: a Democratic Senate. If they gain four seats in this circumstance but lose one—Scott Brown’s, for instance—the veep will also be the decider. The upshot: At least five pickups could be required.
But let’s not be gloomy about Republican chances. In Ohio, Republican state treasurer Josh Mandel was languishing in his bid to unseat Democratic senator Sherrod Brown. Mandel, who is 34 but looks younger, is the boy wonder of Ohio politics. Now he’s getting traction. In a Rasmussen poll last week, he trailed Brown just 44 percent to 40 percent, with 12 percent undecided.
In New Mexico, former congresswoman Heather Wilson will get a clear shot at the open Democratic seat. Her chief Republican rival, Lieutenant Governor John Sanchez, dropped out of the race last week. Wilson, a moderate, is considered the strongest GOP candidate.
And in Florida, Republican representative Connie Mack IV has emerged as the likely opponent of Democratic senator Bill Nelson. Mack is nearly even with Nelson in at least one poll. A Mack-Nelson race would be competitive. But Mack must first defeat GeorgeLeMieux, who served as an appointed senator from 2009 to 2011. LeMieux’s ties to ex-governor Charlie Crist have severely weakened his candidacy.
Three other Democratic seats are vulnerable. No state has trended Republican in recent years more than Missouri. John McCain narrowly beat Obama in Missouri in 2008. Roy Blunt won the open Senate seat there in 2010 by 14 percentage points. So it’s no surprise that Democratic senator Claire McCaskill is in deep trouble this year. The Republican Senate primary is August 7.
Wisconsin is more Democratic, but it offers Republicans a great opportunity. Congresswoman Tammy Baldwin, the Democratic candidate, is gay, liberal, and a zealous campaigner. Either of the GOP candidates, former governor Tommy Thompson or ex-House member Mark Neumann, could beat her. When Neumann gave up his House seat in 1998 to run (unsuccessfully) for the Senate, by the way, he was replaced by Paul Ryan.
In Hawaii, Democrat Dan Akaka is stepping down after three terms, and there’s only one Republican with a realistic chance of winning his seat, former governor Linda Lingle. Fortunately for Republicans, Lingle is running. She didn’t have to buck a Democratic tide in a presidential year when she won the governorship in 2002 and 2006. With Obama, a native of Hawaii, leading the ticket, she’ll have to overcome a strong partisan headwind.
Where does this leave us? Duffy projects a Republican gain of three to six seats. The Rothenberg Report says two to five. A year ago, I’d have said four to seven. Today, three to six seems about right, with emphasis on the three. But my rule of politics is that the future is never a straight line projection of the present. In November, Republican prospects may look better—or worse.
If requiring Catholic universities and hospitals to cover contraception for employees ends up hurting President Obama with Catholic voters, then Wisconsin is one place to keep an eye on.
That’s because it’s one of the most Catholic of the presidential swing states.
Among this year’s likely electoral battlegrounds, only New Hampshire (38%) and New Mexico (36%) had a higher percentage of Catholic voters than Wisconsin (33%) in 2008, according to exit polls:
An Administration decision not to exempt religious employers from a mandate to cover contraception has sparked an outcry among church officials and leading Republicans. (Churches are exempt from the mandate but church-affiliated institutions that serve the broader public, such as hospitals, are not).
Whether the controversy could reduce the President’s support among Catholic voters is hard to know, partly because these voters are so diverse and numerous that it borders on the absurd to generalize about them. They made up a quarter of the electorate in 2008.
So keep in mind some caveats in any discussion about the role or impact of the “Catholic vote.”
First, while it’s often portrayed as a large, decisive bloc in American politics, it’s not really a voting bloc at all. Studies have shown that being Catholic, by itself, predicts little about the way an individual is likely to vote.
“It ceased to be a cohesive bloc more than 40 years ago, and, as a group, Catholic voters have not always been the consistent ‘swing vote’ group that they are often portrayed to be,” wrote the authors of a research paper on Catholic voting from 1960 to 2004: “Camelot Only Comes but Once? John F. Kerry and the Catholic Vote.”
The authors take on what they identify as “myths” about Catholic voters: that there is a cohesive Catholic presidential vote; that Catholics were especially motivated by “moral values” in the 2004 election between Democrat Kerry and Republican George W. Bush (they were less likely than non-Catholics in exit polls to cite moral values as the issue that mattered most to them).
The study asserts that the “defining features of anything that one might call the ‘Catholic vote’ are in its fractures, not its wholeness.”
Taken as a whole, the Catholic vote often tracks closely with the national vote, giving it the appearance of a bellwether in American politics.
But this “swing vote” is actually the sum of two sub-groups that vote very differently from each other: white Catholics, who leaned Republican four years ago, and Latino Catholics, who were heavily Democratic.
For example, Democrat Obama dominated among Latino Catholics nationally and in key swing states in 2008. He won roughly three out of four Latino Catholics in New Mexico and Nevada, according to exit polls.
But he narrowly lost white Catholics in the majority of swing states he carried, winning this group in only three battlegrounds with sizable Catholic populations– Wisconsin, Iowa and Michigan. In most cases, the “white Catholic vote” was very similar to the “white vote.”
In Wisconsin, the Catholic vote is overwhelmingly white and non-Hispanic. White Catholics made up 30% of the Wisconsin vote four years ago, more than in any battleground state but New Hampshire.
So Wisconsin’s political profile is fairly distinctive when it comes to Catholic voters. It is the most Catholic of the larger 2012 battlegrounds (New Hampshire and New Mexico are much smaller). And it has an unusually high proportion of white Catholics.
But keep in mind these voters are anything but monolithic. The Pew Forum on Religion and Public Life documents how Catholics are just as diverse and divided in their politics as Americans in general. In Wisconsin four years ago, the partisan divisions among white Catholics were virtually identical (38% Democratic, 35% Republican, 22% independent) to those among all Wisconsin voters.
Rick Warren, freaking out over the new birth control policy:
I’d go to jail rather than cave in to a government mandate that violates what God commands us to do. Would you? Acts 5:29
— @RickWarren via web
He’s so principled!
Except if he’s really so principled, and if he’s really so resistant to this policy, why hasn’t he actually opposed it and sent himself to jail yet?
You see, Warren’s ministry is located in Lake Forest, California (Orange County). And a birth control mandate has been law in California for a long time. Since 1999, actually.
Cal. Insurance Code § 10123.196 and Cal. Health & Safety Code § 1367.25 (1999) require certain health insurance policies that already cover prescription drugs to provide coverage for prescription contraceptive methods approved by the FDA. Religious employers can request health insurance plans without coverage of approved contraceptive methods that are contrary to the employer’s religious tenants. (AB 39)
Now, California allows churches to opt out, but so does the federal one. In fact, the federal lawwas modeled after the exemption offered by California and other states.
More than half the states have similar “contraceptive equity” laws on the books, many with religious exceptions similar or identical to the one included in the administration’s regulation.
That’s no accident. “The HHS rule was modeled on the exceptions in several state laws, including California, New York and Oregon,” says Lipton-Lubet of the ACLU.
The Catholic Church challenged the California law and failed with a 6-1 drubbing at the California Supreme Court.
So given that Warren is willing to go to jail to fight this law, why hasn’t he already gone to jail to fight the California one? He’s only had 13 years to do so.
So let’s have a little fun: sign the petition asking Rick Warren to report to jail.
[…] Romney’s support for blindly drug-testing welfare recipients dates back at least two decades,to his failed 1994 campaign for the US Senate. Civil rights advocates, meanwhile, have been quick to challenge the constitutionality of drug testing bills that were passed last year, and courts blocked similar bills from being implemented in Florida and Michigan.
Rather than saving states money or ensuring taxpayer dollars aren’t used to purchase drugs, mandatory testing laws have succeeded only in proving that welfare recipients are actually less likely to use drugs than the public at large, and implementing laws requiring drug testing iscosting states like Florida money they don’t have.
The ACLU of Florida has estimated that the state saved just over $40,000 between July and October by denying residents welfare support based on their failure to pass a drug test, while it spent more than $245,000 in reimbursements for the cost of the exam in the same time period.
AND IN OTHER NEWS…
Where did the ubiquitous Valentine’s symbol come from?
It’s Valentine’s Day, and as usual, people are presenting their loved ones with heart-shaped cards, candy, and trinkets. How did the heart shape become the symbol of true love?
Nobody’s quite sure, but it might have to do with a North African plant. During the seventh century B.C., the city-state of Cyrene * had a lucrative trade in a rare, now-extinct plant: silphium. Although it was mostly used for seasoning, silphium was reputed to have an off-label use as a form of birth control. The silphium was so important to Cyrene’s economy that coins were minted that depicted the plant’s seedpod, which looks like the heart shape we know today. The theory goes that the heart shape first became associated with sex, and eventually, with love.
The Catholic Church contends that the modern heart shape did not come along until the 17th century, when St. Margaret Mary Alocoque had a vision of it surrounded by thorns. This symbol became known as the Sacred Heart of Jesus and was associated with love and devotion; it began popping up often in stained-glass windows and other church iconography. But while the Sacred Heart may have popularized the shape, most scholars agree that it existed much earlier than the 1600s.
Less romantic ideas about the heart-shape’s origin exist as well. Some claim that the modern heart-shape simply came from botched attempts to draw an actual human heart, the organ which the ancients, including Aristotle,believed contained all human passions. One leading scholar of heart iconography claims that the philosopher’s physiologically inaccurate description of the human heart—as a three-chambered organ with a rounded top and pointy bottom—may have inspired medieval artists to create what we now know as the heart shape. The medieval tradition of courtly love may have reinforced the shape’s association with romance. Hearts can be found on playing cards, tapestries, and paintings.
Hearts proliferated when the exchange of Valentines gained popularity in 17th-century England. At first the notes were a simple affair, but the Victorians made the tradition more elaborate, employing the heart shape in tandem with ribbons and bows.
Bonus Explainer: Why do we single out Feb. 14 to celebrate romance? It’s said to be the day St. Valentine, a Roman priest during the third century, was executed. Legends about Valentine vary. Some say he was killed for illegally marrying Roman soldiers; others claim it was for helping Christians escape punishment at the hands of the pagan emperor. Just before his death, it’s believed that he sent an affectionate note to the beautiful daughter of his jailer—the very first Valentine.
QUOTE OF THE DAY:
“Paradise is always where love dwells.” ~~ Jean Paul Richter