MN GOP Gov. Candidate’s Idea For Economic Growth: Cut The Minimum Wage Of Bartenders And Waiters

By Zaid Jilani on Jul 6, 2010 at 7:30 pm

emmer1 With the tough economy continuing to hit individuals, families, and businesses nationwide, progressive legislators have sought to protect vital public investment in the nation’s communities, while many conservative lawmakers have turned to slashing social support for the most vulnerable Americans.

Minnesota GOP candidate for governor Tom Emmer falls in the second camp. Speaking to reporters yesterday, Emmer proposed cutting the minimum wage for service workers who receive tips, such as bartenders and waiters. In order to justify the cut, Emmer said that some of these employees earn “over $100,000 a year,” and even make more than the people who employ them:

Tom Emmer, the GOP-endorsed candidate for governor, told reporters at the Eagle Street Grille in St. Paul on Monday that the minimum wage for service workers who earn tips should be cut. Some waiters and bartenders, he noted, can earn as much as $100,000 a year, which he said is unfair to the employers that hire them.

“With the tips that they get to take home, they are some people earning over $100,000 a year. More than the very people providing the jobs and investing not only their life savings but their families’ future,” Emmer said.

Minnesota is one of few states that does not follow the federal minimum wage for tip-earners — $2.13 an hour. Instead, tip-earners make $5.25 to $7.25 an hour in addition to tips. Emmer says that hurts businesses’ bottom lines.

“Government can only inhibit business, can only keep it from growing, as opposed to creating jobs,” he said. “Right now, we have too much of it, guys. We’ve got to pull government back.”

In making his case for cutting the minimum wage for service employees, Emmer cites a figure that is wildly misrepresentative. While it may be true that “some” service workers can earn “over $100,000 a year,” most do not. According to the latest data available from the Bureau of Labor Services (BLS), Minnesota food and beverage service workers earned an average of $10.45 an hour in May 2010, a number that includes tips.

That means that the average full-time worker whose salary Emmer wants to cut likely earns less than a third of the dollar figure he cited in pushing for the cuts. Rather than trying to punish working class Minnesotans for for the sins of the financial elite that sent the economy into a tailspin, maybe Emmer should be working to stop the massive teacher layoffs and tuition hikes that his Republican colleague Gov. Tim Pawlenty has caused with his stubborn refusal to raise revenues by taxing the super wealthy.

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Health

HealthCare.Gov And The Coming State-Based Exchanges

By Igor Volsky on Jul 6, 2010 at 7:25 pm

Health care and tech savvy bloggers breathed a collective sigh of relief last Thursday, when the Department of Health and Human Services (HHS) unveiled a very user friendly and easy to navigate health care portal at healthcare.gov. I captured Todd Park’s very energetic presentation of the site here, and wondered how the national portal would interact with the state-based exchanges in 2014.

Will states build off the main site and sell policies from some kind of exchange section? Or, will they have to create their own websites and sell coverage that way? Will customers be able to view exchanges options from the main site or will that information only be available within each exchange? I sent these questions to a contact at HHS and received the following reply:

Under Section 1311(b)(5), the portal continues to operate. States have the option of using the portal directly or using a template the Secretary provides to set up their own portal but the portal continues to function robustly concurrently with any portal a state may set up. It is important to note that the portal is currently organized and displays information by state. In 2014, it will reflect the plan offerings in the Exchanges as well as public programs. The portal will also show plans sold outside the exchange.

During today’s Twitter chat, Park confirmed this arrangement, tweeting that “State-level portals can be a great complement to HealthCare.gov. We’ll continue to enhance HealthCare.gov as well.” All this should be seen as a good thing, since the existing site goes a long way towards accomplishing the main goal of exchanges — helping customers choose a compatible insurance plan.

In other words, in 2014, a purchaser a customer will be able to generate rate comparisons by inputting his or her date of birth, household size, and ZIP code. Many more details need to be worked out, but if states don’t have to create their own portals and can rely on the national model, it will be possible for consumers to compare products in a standardized way. That could only help increase the number of insured Americans.

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Climate Progress

NSIDC: In June, Arctic sea ice saw lowest extent and fastest rate of decline in the satellite record

By Joe Romm on Jul 6, 2010 at 6:57 pm

This year will almost certainly set the record for lowest Arctic ice volume ever recorded (see “When things were rotten“). But whether it will set the less important — but more visible — record for sea ice extent is less certain. You can see how close 2010 is to 2007 now.

On the one hand, the National Snow and Ice Data Center just issued their July report, which notes, “June saw the return of the Arctic dipole anomaly, an atmospheric pressure pattern that contributed to the record sea ice loss in 2007.” On the other hand, they point out:

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Economy

BP Slated To Claim $600 Million In Ethanol Tax Credits This Year

By Pat Garofalo on Jul 6, 2010 at 6:35 pm

Earlier today, I pointed to a Stateline report about state government struggling to cut wasteful tax subsidies for corporations, even when they are faced with billions in budget shortfalls. And the federal government has a similar problem with promulgating tax credits that go to either mature industries that don’t need the help or wind up benefiting parties other than those intended.

For instance, paper companies will receive $6.6 billion this year in credits meant to discourage use of fossil fuels. But to qualify for this boondoggle, these companies will actually add diesel fuel to a fuel mix that is already carbon-free, “following the letter of the law while violating its spirit.”

In that vein, BP, the oil company responsible for the ongoing gusher in the Gulf of Mexico, is slated to be one of the largest beneficiaries of tax credits meant to encourage ethanol use:

BP could stand to reap federal tax credits approaching $600 million this year for blending gasoline with corn-based ethanol, making the British oil and gas giant one of the largest beneficiaries of the 45 cents-per-gallon ethanol incentive…A common misconception is that it’s the ethanol producer receiving the direct benefit, when it’s really the oil companies. “That’s the guy behind the curtain,” said one energy lobbyist. He said BP might be the largest ethanol credit beneficiary by virtue of a heavy Midwest presence, and noted BP was among the first companies to support the ethanol mandate.

BP is the fourth-largest U.S. ethanol blender, behind Valero Energy, ConocoPhillips and Exxon Mobil, and it’s worth asking whether the movement toward a green economy is at all aided by sending free money to oil companies for mixing some ethanol into their blend. “Is it actually promoting the environment’s health? Is the subsidy making a difference, and for whom?” asked Rep. Earl Blumenauer (D-OR).

Indeed, these tax credits for the oil industry, which reaps record profits year after year, should be very closely examined, particularly since many of them contribute to the country’s reliance on oil by making it artificially cheaper to look for and extract. There are currently nine different federal subsidies given to the oil industry, and taxpayers would save $45 billion if they were all cut. But, as CAP’s Sima Gandhi pointed out, making such cuts would require Congress “to overcome lobbyist arguments that killing subsidies will harm the economy”:

Profitable and powerful oil companies, such as BP and ExxonMobil, pay lobbyists millions of dollars to scare lawmakers into believing that ending subsidies to oil companies will wreak havoc on the American economy. These arguments are advanced by trade organizations such as the American Petroleum Institute, and they suggest that eliminating subsidies “could mean less U.S. energy production, fewer American jobs,” and higher oil prices. The evidence suggests otherwise.

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Politics

Rove Admits His ‘Shadow RNC’ Attack Group Functions Largely Because Of The Citizens United Decision

By Alex Seitz-Wald on Jul 6, 2010 at 6:15 pm

Given the weak leadership of Republican National Committee Chairman Michael Steele, former Bush White House adviser Karl Rove launched a “shadow RNC” in April called American Crossroads, vowing to spend $50 million to influence this Fall’s election. After an embarrassing first month of fundraising, Crossroads raised $8.5 million in June, “from an even split of individuals and corporations.”

On Fox News today, Rove directly credited his group’s success to the Supreme Court’s Citizens United decision, which overturned the decades-old ban on corporate money in politics:

HOST: Some suggest that the money that goes to American Crossroads might otherwise go to an organization like the RNC.

ROVE: Well that’s not correct, because American Crossroads is collecting money in excess of the individual contribution limits the RNC has allowed to give. What we’ve essentially said, is if you’ve maxed out the to senatorial committee, the congressional committee or the RNC and would like to do more, under the Citizens United decisions, you can give money to the American Crossroads 527, or Crossroads GPS, so we’re not tapping the people who — if you’ve giving to American Crossroads, you’re fully capable, in all likelihood, of giving the maximum to one of the national committee organizations.

Watch it (beginning 2:00):

While some reports have downplayed the impact of Citizens United on this year’s election, Rove seems to be acknowledging that his high-profile group relies on the decision for its fundraising. If Crossroads and the other new conservative attack groups raise the tens of millions of dollars they plan to spend this year from corporate donors — as Crossroads has — then the impact of the decision could be huge.

Rove explained that his donors are those who have “maxed out” contributions to the RNC and other national committees, but the individual contribution limit to these groups is $30,400 per election cycle, so Rove is clearly focused on the wealthiest of donors. As Rolling Stone’s Tim Dickinson noted, “By building a war chest of unregulated campaign cash…Rove would be able to wage the midterm elections on his own terms: electing candidates loyal to the GOP’s wealthiest donors and corporate patrons. With the media’s attention diverted by the noisy revolt being waged by the Tea Party, the man known as ‘Bush’s brain’ was staging a stealthier but no less significant coup of the Republican Party.”

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Yglesias

Endgame

By Matthew Yglesias on Jul 6, 2010 at 6:14 pm

Won’t move over:

— Steve Sailer delivers the World Cup racial resentment like only he can.

— The economy predicts large midterm losses for House Democrats.

— Jonathan Bernstein joins Team Harding.

— Progressive liberalism seems to be doing nicely in Brazil and coming to be a bipartisan consensus program.

— The trouble with yellow lights.

— Killing civilians creates new insurgents.

The Kills, “Fried My Little Brains”

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Health

How Beverage Industry Defeated New York’s Penny-Per-Ounce Soda Tax

By Igor Volsky on Jul 6, 2010 at 5:50 pm

pounds-4802 On Friday, the New York Times ran a depressing account of how the beverage industry used clever marketing gimmicks and millions of dollars to defeat the the state’s penny-per-ounce tax on soda. Using the front New Yorkers Against Unfair Taxes, the industry framed the policy as a new tax on struggling middle and lower class families during an economic recession and spent at least 9.8 million on the campaign:

The tax that the governor’s allies referred to somewhat awkwardly as a “sugary beverage tax” immediately became known in the vernacular as “the fat tax,” which sounded like a rebuke to anyone who has ever stood on a bathroom scale and winced. The governor quickly threw in the towel that first year, when he still aspired to run for election in 2010. [...]

The health message resonated with public-spirited groups like the New York Academy of Medicine and editorial writers. Enter New Yorkers Against Unfair Taxes, set up by the beverage industry, grocers and the Teamsters, who work as drivers and in production. The organization’s Web site describes it as a humble coalition of “hard-working individuals, struggling families and already burdened small businesses,” like Benny’s Pizza and Kay’s Deli.

But behind the scenes, much of the strategic work came from Goddard Claussen, the public affairs company whose “Harry and Louise” commercials helped defeat President Bill Clinton’s health care overhaul efforts. The company was retained by the American Beverage Association to lobby against the New York tax.

On the whole, all of this is really bad news. Researchers say that “the link between obesity and soda is scientifically stronger than the link between obesity and any other type of food or beverage” and predict that sugar-sweeted beverages “may be the single largest driver of the obesity epidemic.” Each year, obese adults incur “an estimated $1,429 more in medical expenses than their normal-weight peers,” and overall, the nation spent up to $147 billion on obesity-related costs in 2008.

As David Leonhardt noted back in in May, “[s]omeday, we will probably look back on our gallon-a-week soda habit the way we now look back on allowing children to ride without seat belts or listening to doctors who endorsed Camel cigarettes. We will wonder what we were thinking.” Indeed, the industry’s argument may have won the day, but you can’t get away from the reality taxing a non-essential commodity that only increases health care expenditures makes a lot of sense, particularly during periods of staggering deficits. Goddard Claussen defeated health reform in 1994, only to see comprehensive legislation passed 16 years later. Here’s to hoping the soda tax won’t take half that long.

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Politics

Steele cancels appearance last minute in the wake of his latest gaffe, provides ‘no explanation whatsoever.’

By Alex Seitz-Wald on Jul 6, 2010 at 5:35 pm

Republican National Committee Chairman Michael Steele has come under intense pressure from his own party in recent days over comments he made last week suggesting that the war in Afghanistan was un-winnable. The latest gaffe prompted fresh speculation that he would resign or be forced out, and “Steele spent the weekend calling key RNC members to control the damage.” This morning, the Swamp reported that Steele had canceled an appearance at the Aspen Ideas Festival just days before he was scheduled to speak. Aspen Institute Communications Director Jim Spiegelman confirmed in an email exchange with ThinkProgress that Steele had canceled the appearance — which was scheduled for Thursday — and said Steele had provided “[n]o explanation whatsoever”:

SPIEGELMAN: Michael Steele was a confirmed speaker at this week’s Aspen Ideas Festival but cancelled this morning. [...]

TP: Did Steele provide any reason for his sudden cancellation?

SPIEGELMAN: No explanation whatsoever. And we’re simply too busy managing our festival to learn what the reason was.

The AP reported this afternoon that Steele said he will stay put at the RNC, but the reason for his Aspen cancellation remains unclear. ThinkProgress contacted the RNC for an explanation, but they did not reply.

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Yglesias

More Catholic Than the Pope

By Matthew Yglesias on Jul 6, 2010 at 5:29 pm

Tim Duy offers a long, admittedly heretical trade skeptical post that I’m not going to attempt to summarize, though I recommend that you read it.

Instead, let me offer another suggestion. If you tell an orthodox economist that you want to impose barriers to foreign imports in order to preserve or create jobs, the orthodox economist will tell you that such barriers will only shrink the overall size of the economic pie. If you tell the orthodox economist that you’re worried about the distributive implications of this line of thought, he’ll tell you that it makes more sense to adopt the pro-growth free trade policies and then do more redistributive taxation. A lot of people disappointed with the past 10 years’ worth of economic results have been led to question the orthodoxy, but it seems to me that we should pay closer attention to the orthodoxy and actually do what the orthodoxy implies.

Which is to say that the United States is participating in a much more open global economy in 2010 than existed in 1990. In part that’s because we’ve liberalized our own trade policies. And in part it’s because China, India, Brazil, and the former Soviet bloc have all liberalized their own policies. What the orthodoxy says about this change is that it should (a) increase our potential output and (b) make us more open to redistributive taxation. Now look at what’s happened over the past twenty years. Do we do more redistributive taxation? No, we don’t. Has the Fed started targeting a more aggressive growth rate? No, it hasn’t. We’re not seriously taking advantage of the putative upside of freer trade nor are we doing the thing that’s supposed to mitigate the downside. So of course it’s not working out the way it’s supposed to.

I think reasonable people can disagree about second-best alternatives to the best possible policy. But the best policy for the United States remains exactly what the orthodoxy says—freer trade, more aggressive economic growth targets, and higher taxes to finance more and better public services. In the 1990s, we got a “lite” version of this kind of policymaking and it worked pretty well. Similarly, I think countries like Chile and Brazil that have combined liberalization with increased social welfare have managed to achieve impressive growth and improvements in human welfare.

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Climate Progress

New Clean Air Rule To Tame The Coal Plant Monster

By Guest Blogger on Jul 6, 2010 at 5:02 pm

Our guest blogger is Frank O’Donnell, president of Clean Air Watch.

Coal plant Today, the Obama administration proposed a sweeping plan to reduce power plant emissions that cross state lines and kill tens of thousands of Americans every year. The proposed Clean Air Transport Rule replaces the Bush administration’s so-called “clean air interstate rule” (CAIR) that was shot down by the courts because it permitted so much interstate emission trading that even some power companies filed suit. A federal court ordered EPA to fix the shaky legal grounds of the Bush plan. Power industry pollution remains so pervasive — and so often blows from one state to another — that it basically handcuffs state efforts to reduce pollution within a state’s borders. As EPA noted in a fact sheet:

Specifically, this proposal would require significant reductions in sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions that cross state lines. These pollutants react in the atmosphere to form fine particles and ground-level ozone and are transported long distances, making it difficult for other states to achieve national clean air standards.

Emissions reductions will begin in 2012. By 2014, “the rule and other state and EPA actions would reduce power plant SO2 emissions by 71 percent over 2005 levels,” and power plant NOx emissions “would drop by 52 percent.”

It has been nearly 40 years since passage of the landmark Clean Air Act of 1970. Since then, we’ve made significant progress towards cleaner air. Cars are dramatically cleaner. Lead is gone from gasoline. New trucks no longer belch out the familiar puff of smoke. And EPA statistics document the continuing overall trend of cleaner air with respect to traditional pollutants. Despite that progress, one major source of air pollution remains a notorious problem: the electric power industry. Indeed a recent assessment by Ceres, the Natural Resources Defense Council and several power companies described the footprint of fossil-fueled power plants:

In 2008, power plants were responsible for 66 percent of SO2 [sulfur dioxide] emissions, 19 percent of NOx [smog-forming nitrogen oxides] emissions, and 72 percent of toxic mercury emissions in the U.S. – not to mention that the electric industry also pumps out nearly 40 percent of the nation’s heat-trapping carbon dioxide emissions.

A recent Clean Air Watch survey noted that no fewer than 40 states and the District of Columbia have experienced unhealthful levels of smog so far this year.

The Obama EPA hopes to put the cleanup concept on a sound legal footing by limiting the amount of emission trading. Anyone interested in clean air should hope this plan holds up in court. EPA projects the plan could prevent up to 36,000 premature deaths a year – and bring monetary benefits of at least $120 billion a year – at an annual cost of about $2.2 billion.

It is a big step towards taming the environmental monster known as the coal-fired power plant. But it is only the first step. EPA plans nest year to propose rules to limit mercury and other toxic emissions including arsenic, dioxins and hydrochloric acid. The power industry has been evading toxic pollution requirements for two decades.

EPA has also pledged to follow up with a subsequent interstate pollution rule, if needed, as it surely will be, to make further reductions in smog-forming power plant emissions after the agency moves to set tougher national health standards for ozone, or smog, as it plans to do by the end of the summer.