Rubio’s Spending Cuts Plan: End Tax Benefits For The Middle Class While Extending Them For The Rich

By Ben Armbruster on Jul 26, 2010 at 7:15 pm

marcorubio Earlier this month, Florida GOP U.S. Senate candidate Marco Rubio unveiled his economic plan, which is basically just a double-down on the Bush tax cuts with, as the Wonk Room’s Pat Garofalo noted, “an unspecified corporate tax cut thrown on top for good measure.” How does Rubio plan to pay for all these tax cuts? His campaign “couldn’t give an answer.”

Today, Rubio laid out a new plan to cut spending — “12 Simple Ways To Cut Spending,” his campaign calls it. The plan contains many ideas that would do very little in terms of paying down the debt and reducing the deficit — including eliminating earmarks, reducing the size of the federal bureaucracy, and cutting Congressional and White House budgets. Others are outright gimmicks, such as allowing taxpayers to allocate taxes to the debt and calling for a balanced budget amendment.

But also, Rubio — like some of his colleagues on the right — wants to end the stimulus program:

• IDEA #4: End The Stimulus Program And Use The Savings To Cut The Debt. We must end the wasteful stimulus program that has failed to create jobs. Stimulus money that has not been spent should be used for something that will actually help the economy and create jobs, or to pay down the debt. Canceling unspent stimulus funds could save over $300 billion.

Of course, it’s simply not true that the Recovery Act has “failed to create jobs” as Rubio’s outline says. In fact, the nonpartisan Congressional Budget Office recently found that the stimulus has created up to 2.8 million jobs and projects that nearly 4 million could be attributed to the Recovery Act by September.

Moreover, ending the stimulus would eliminate the remaining funds that are set aside for middle class tax cuts. The stimulus provides a tax cut to 95 percent of Americans and according to Recovery.gov, $55 billion remains to be spent on tax benefits. So, on the one hand, Rubio wants to extend the Bush tax cuts for the wealthy at a cost of $700 billion and has no idea how to pay for it (thus increasing the debt and deficit), while on the other, he wants to repeal middle class tax to pay down the debt.

So how much money will Rubio’s new spending cuts plan actually save? The outline does not provide any figures and his campaign has not responded to an inquiry from ThinkProgress.

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Justice

Missouri Governor Issues EO Banning Discrimination Based On Sexual Orientation In Executive Branch

By Igor Volsky on Jul 26, 2010 at 7:05 pm

Missouri Governor Jay Nixon (D)

Earlier this month, Missouri Governor Jay Nixon (D) signed Executive Order 10-24, “adding employment protections based on sexual orientation to the Executive Branch of Missouri state government.” The measure, which went largely unreported in the press, does not explicitly extend protections for gender identity, but PROMO, the state LGBT group, told me they received assurances from the Attorney General that discrimination against gender would not be tolerated. From the text:

The executive branch of the State of Missouri shall ensure that all present and prospective employees are afforded equal opportunity at all levels and phases of employment within state government with respect to, but not limited to, hiring, recruiting, training, benefits, promotions, transfers, layoffs, demotions, terminations, rate of compensation, and recalls from layoffs. It shall be the responsibility of the State Office of Equal Employment Opportunity to monitor all departments of the executive branch of state government and assist them to ensure equal employment opportunity. The State of Missouri shall work to ensure that there will be no vestiges of discrimination against persons on account of race, color, religion, national origin, sex, ancestry, age, sexual orientation, veteran status, or disability; not only in employment practices but in the provision of services and the operation of facilities.

PROMO see the order as a big step forward for a state that became the first in the nation to ban same sex marriages in 2004 (that amendment “picked up 70 percent of the vote and was endorsed in every county but St. Louis city”), and believes that it signals the governor’s support for The Missouri Nondiscrimination Act (MONA), a measure that would extend anti-discrimination protections to public and private institutions.

But the governor’s spokesperson, Scott Holste, cautioned me against viewing this as a move in that direction. “The Governor believes that Missouri should work to ensure that there won’t be any vestiges of discrimination,” Holste said, but stressed that Nixon has not expressed support for a broader anti-discrimination measure that goes beyond the Executive branch. “That’s an issue that we will have to address at another time,” he said. Nixon’s order is the first of its kind in Missouri.

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Climate Progress

As nation, Russia, and world swelter under record-smashing heat waves, The New York Times sets one-day record for most unilluminating stories

By Joe Romm on Jul 26, 2010 at 7:02 pm

Globally NOAA just reported that June is the fourth month in a row of record global temperatures, and the first half of 2010 is on a record pace. This is all the more powerful evidence of human-caused warming “because it occurs when the recent minimum of solar irradiance is having its maximum cooling effect,” as a recent NASA paper noted.

Globally nine countries have smashed all-time temperature records, “making 2010 the year with the most national extreme heat records,” as meteorologist Jeff Masters has reported.

“This is a serious abnormality. The Russian weather service has never measured such temperatures in Moscow in July,” said Dmitry Kiktyov, Deputy Director of the Hydrometeorological Center of Russia.

Daily highs outpaced daily lows across the United States nearly 5-to-1 in June and over 3-to-1 in July — whereas the ratio for the decade of the 2000s was 2.04-to-1, up from 1.36-to-1 in the 1990s (see below).

Sunday, the New York Times dedicated six stories on the weather across the country. Six! There were four regional “human interest” stories:

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Yglesias

Endgame

By Matthew Yglesias on Jul 26, 2010 at 6:14 pm

I wonder what I’ll find:

— It seems to me that if you disburse federal agencies you’ll make media/congressional oversight even worse than it is now and regulatory capture will run rampant.

— Arkansas excited about Dunkin Donuts maybe opening a store there.

— How corporate boards inflate executive pay.

— WikiLeaks knew info was largely things “we already knew” but lots of people need to hear about these things.

— CBO on immigration.

Celebrate the end of Netroots Nation with Sheryl Crow’s “Leaving Las Vegas”. I have a large tolerance for bad nineties hits, but this one is truly indefensible.

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Climate Progress

Energy and Global Warming News for July 26th, 2010: Urban air pollutants can damage IQs before birth; Toxic fish could help Obama hit 2020 climate goal

By Sean Pool on Jul 26, 2010 at 6:02 pm

Scientific American: Study in Krakow, Poland, corroborate NYC findings that links children’s lower IQ scores with mothers’ exposure to compounds created by burning of fossil fuels

In a sweltering summer in New York City back in 1999, Yolanda Baldwin was eight months pregnant with her first child. She lived near a gas station and across the street from an intersection choked with exhaust-spewing cars and buses. Sometimes the air was so thick with pollution that she could see it, breathe it, smell it, even taste it. And she often wondered what it might be doing to her unborn child.

Now Baldwin and several hundred other mothers whose sons and daughters have been monitored for a decade have an answer: Before children even take their first breath, common air pollutants breathed by their mothers during pregnancy may reduce their intelligence.

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Security

SB-1070 Sponsor Says Mormon Church Should Be Criminalized For Helping The Undocumented

By Andrea Nill Sanchez on Jul 26, 2010 at 5:59 pm

Yesterday, on Univision’s Sunday political show, Al Punto, host Maria Elena Salinas asked state Sen. Russell Pearce (R-AZ) and sponsor of SB-1070 about his immigration views and how they relate to his faith as a member of the Mormon church. For much of the interview, Pearce refused to talk about religion and would not say whether the Church of Jesus Christ of Latter-day Saints should reject or denounce its undocumented immigrant members. However, Pearce rejected the Mormon church’s teaching of compassion and helping those in need and stated that he would support sanctioning or criminalizing fellow Mormons who “deliberately” aid undocumented immigrants:

[Translated from Spanish]
PEARCE: We [Mormons] believe in the rule of law, All I’m gonna say our church teaches the rule of law, absolutely.

SALINAS: It also teaches compassion, no?

PEARCE: Which compassion, what about the child molesters, should we have compassion for them too?

SALINAS: That’s what the church says, that we should not turn…

PEARCE: Hang on, hang on. We should have compassion with child molesters, burglars, rapists, right? They still go to jail. The laws are going to be enforced. You break the law, there are consequences. Don’t have compassion for people who break the law. There are consequences. We are a nation of laws.[...]

SALINAS: Should the Mormon church be criminalized or sanctioned for helping undocumented immigrants?

PEARCE: If they do it deliberately, treat them as you would treat any other person. I do not support law breakers.

SALINAS: Even if they are Mormons?

PEARCE: I don’t care what church they’re part of. Illegal is illegal. The law is the law.

Watch it [in Spanish]:

Pearce also insisted that undocumented immigrants make up a very small minority of the Mormon Church. While the actual number of undocumented Mormons isn’t really known, it is clear that Mormon Church doesn’t turn people away because of their immigration status. Meanwhile, the church’s international growth has been directly connected to its recruitment of Latinos at home and Latin Americans abroad. The Church of Jesus Christ of Latter-day Saints is often said to be the fastest growing religion in Latin America with 5.2 million members and 5,500 chapels. The number of Spanish-speaking Mormon congregations nationwide in the U.S. has grown by 90 percent in the past decade, up to more than 700. For the most part, these new members come from populations that abhor Arizona’s immigration law. Latin American governments have blasted SB-1070 as “racist” and an overwhelming majority of Latinos in the U.S. oppose it and believe it will lead to racial profiling.

Meanwhile, Latinos of Mormon faith are demanding answers from their church. More specifically, they are asking the Church of Jesus Christ of Latter-day Saints to take a position on the immigration issue. While other socially conservative denominations, including the Southern Baptists and Catholics, have come out strongly supporting a path to legalization for undocumented immigrants, the Mormon church has remained notably neutral. Mormon Latinos have responded by launching a letter-writing campaign to Latter Day Saints Church President Thomas S. Monson, asking him to define the church’s official position on immigration. “This is affecting our families,” Tony Yapias, who launched the campaign, stated. “Where’s the church in this? The longer they stay quiet, the more political it gets, the more divisive.”

The Mormon church has come under even more pressure in the wake of the disturbing release of the names of 1,300 suspected undocumented immigrants by citizen vigilantes in Utah. In response, the church released a statement simply calling for “careful reflection and civil discourse when addressing immigration issues.” While the Church of Jesus Christ of Latter-day Saints lags in defining a position, Pearce is becoming its default poster boy. The Arizona Republic reported that his association with SB-1070 has “tarnished the Mormon Church’s image among many Latinos.” And while he didn’t want to talk to Salinas about religion, he has said in the past that his anti-immigration efforts have been guided by the Mormon Church’s 13 Articles of Faith, which includes obeying the law.

While there is no evidence that the Mormon church has actively aided undocumented immigrants in need, other denominations, most famously the Methodist church, have provided assistance and refuge to undocumented immigrants who seek their help.

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Health

How Much Time Should Democrats Spend Promoting Their New Public Option?

By Igor Volsky on Jul 26, 2010 at 5:50 pm

Rep. Lynn Woosley, sponsor of the new public option bill, arm wrestles with Stephen Colbert

Last week, while we were all at Netroots Nation, 128 House Democrats introduced a new public option bill that could reduce the deficit by $68 billion from 2014 to 2020 and offer premiums that “would be 5 to 7 percent lower than other private plans available within the exchange.” Emma Sandoe, who was gracious enough to do a post on this (including a very snazzy table), had this to say about the effort:

Realistically, this chances of this public option bill passing this Congress, who is exhausted from the last public option fight and in full midterm mode, are slim. This hasn’t deflated Woolsey who said, “This will be there for the next Congress.” Whether or not this proposal goes anywhere legislatively, it reminds more progressive voters and members of the party that the public option has not been forgotten. States have already begun showing support for public run insurance systems, this support from the federal government can work to galvanize the effort.

Democrats in progressive districts want to use the bill to turn out the base in November, and that’s a good thing. The public option is one of the most popular and controversial elements of health care reform and if structured correctly from a policy perspective, it could actually go a long way towards lowering health care costs and injecting some competition into insurance markets. We should welcome this move, but we should also urge Democrats to go further and spend equal energy on ensuring that the existing parts of the law, particularly the exchanges within which the public option will operate, are well implemented. After all, various parts of the health industry are busy influencing the implementation process and Democrats in Congress should too.

HCAN issued a report just last week about how the insurance industry is already spending millions of dollars to water down the medical loss ratio regulations and other sectors are undoubtedly working to craft their own regulatory exemptions. There are several progressive-based implementation efforts underway, but with the exception of a few dedicated health care wonks — Sen. Jay Rockefeller (D-WV) among them — few Democrats have spent time publicly countering the well-orchestrated industry lobby or pressuring the HHS Secretary and the other relevant agencies to issue regulations in the consumers’ interest.

But this fight is just as essential as the public option and Democrats should be holding Congressional hearings, working closely with their state insurance departments and legislatures, and doing all they can to ensure that the bill is properly implemented. If they don’t, we know that the industry will determine the effectiveness of reform, and in many respects, the future of the party.

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Politics

Prison Lobbyists Working For AZ Gov. Brewer Are Set To Profit From Immigration Law She Signed

By Zaid Jilani on Jul 26, 2010 at 5:50 pm

This Thursday, SB-1070, Arizona’s radical new immigration law, will go into effect. Despite an incoming lawsuit from the Obama administration’s Department of Justice, Gov. Jan Brewer (R-AZ) has maintained that her state “will prevail,” claiming that she is simply defending the border integrity and safety of her state.

Yet a new investigation by local Arizona TV news station CBS 5 finds that the Brewer administration may have ulterior motives for its strong support of the new law. The station has found that “two of Brewer’s top advisers have connections” to private prison giant Corrections Corporation of America (CCA).

Paul Senseman, Brewer’s deputy chief of staff, is a former lobbyist for CCA. His wife continues to lobby for the company. Meanwhile Chuck Coughlin, who leads her re-election campaign, chaired her transition into the governorship, and is one of the governor’s policy advisors, is president of HighGround Public Affairs Consultants, which lobbies for CCA.

This is important because CCA currently “holds the federal contract to house detainees in Arizona.” CBS 5 notes that the company currently bills $11 million a month to the state of Arizona and that, if SB-1070 is successfully implemented, its profits would be significantly padded as it would take responsibility for imprisoning immigrants arrested by Arizona police.

The company maintains that it “unequivocally, did not at any time lobby — nor did we have any outside consultants lobby — anyone in Arizona on the immigration law,” but direct lobbying would not be necessary with allies like Senseman and Coughlin working directly for Brewer.

Coughlin, in particular, has a history of boasting about the influence he has had on the state government on behalf of private business. In an interview earlier this month, he bragged about privatizing the commercial garbage business in Mesa, Arizona, by coordinating with industry lobbyists. He told the interviewer, “I can make [expletive] happen.”

Perhaps even more alarmingly, he explained his influence over Brewer to the interviewer. Coughlin explained that when he worked for Gov. Fife Symington (R-AZ) as his chief lobbyist, he locked horns with Brewer, who was at the time the Senate majority whip. He explained that his lobbying was so effective that she now says, “I was scared of you guys” — and that he has run her campaigns ever since:

Q: You got to the Capitol not long after Jan Brewer. Have you known her since then?

COUGHLIN: We both have discussed that. We tried to remember when we first really met. We think we met — I’m fairly confident — when I worked for Grant and she was in the House. I was Grant’s lobbyist, because I left Bob’s (Bob Robb) firm and I went to work for Grant as his director of public affairs in ’91, after his election.

Where we really got to know each other well was years later when she was Senate majority whip and I was Fife’s chief lobbyist in ’95. She was the chief vote-counter in the Senate, and it was our job to get the governor’s agenda through, so I got to know her pretty well. Fife’s team had a fairly aggressive, robust reputation. She’ll say to this day, “I was scared of you guys,” that we’d come in and threaten her or something like that. I don’t recall that.

She called me after I left Fife’s employ in ‘96 and started a firm called Coughlin Communications. We changed that to HighGround about four months later when Wes (Gullett) joined me. She came to me after that session and told me she wanted to run for county supervisor. We’ve run all her campaigns ever since.

CBS 5 filed a video report on CCA’s ties to the Brewer administration. Watch it:

(HT: OpenLeft)

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Yglesias

Niall Ferguson Debates Himself

By Matthew Yglesias on Jul 26, 2010 at 5:28 pm

cash-wad 1

I’ve been known to remark on the conservative movement’s strong adherence to Keynesian arguments as a justification for tax cuts in the wake of the mild 2001 recession, adherence that seems puzzling in light of their contrary rhetoric in the wake of the cataclysmic 2008-2009 downturn. Brad DeLong observes that one particularly hilarious example of this is historian-turned-pundit Niall Ferguson who wrote a December 12, 2003 article on the Bush administration that’s in considerable conflict with his contemporary take on things. DeLong requests a Ferguson v Ferguson debate, and with assistance from Ryan McNeely I’m prepared to unveil one.

2003 Ferguson is in boldface, 2010 Ferguson is in italics:

Guns or butter: this is the choice historians conventionally say that governments face. The administration is currently engaged in an audacious — some would say reckless — experiment to disprove this theory. To judge by his actions, the President’s response to the question “Guns or butter?” is: “Thanks, I’ll take both.” This, in short, is the guns and butter presidency.

Are there precedents for such a combination? What’s to say this deficit-spending won’t work? Keynes would tell us that in the current environment we must boost aggregate demand.

Certainly. Long before Keynes was even born, weak governments in countries from Argentina to Venezuela used to experiment with large peace-time deficits to see if there were ways of avoiding hard choices. The experiments invariably ended in one of two ways. Either the foreign lenders got fleeced through default, or the domestic lenders got fleeced through inflation.

But the United States has broken the guns or butter rule before. Under President Ronald Reagan, substantial increases in military spending coincided with comparable increases, relative to gross domestic product, in personal consumption — that proportion of G.D.P. that the public, as opposed to the government, spends. The crucial point, of course, is that in the short term at least, fiscal policy is not a zero-sum game.

But this doesn’t respond to long run inflationary fears. When economies were growing sluggishly, that could be slow in coming. But there invariably came a point when money creation by the central bank triggered an upsurge in inflationary expectations.

But, as Keynes remarked, in the long run we are all dead! Aren’t these “inflationary expectations” priced into the markets?

New York Times columnist Paul Krugman, who likens confidence to an imaginary “fairy” have failed to learn from decades of economic research on expectations. All it takes is one piece of bad news – a credit rating downgrade, for example – to trigger a sell-off.

But this will not be the kind of inflation experienced in the 1970′s and 1980′s. So powerful are the deflationary forces today (notably in the second and third biggest economies, Japan and Germany) that Washington can splurge on its military and social services with only a modest impact on expectations of inflation.

But it is not just inflation that bond investors fear. Foreign holders of US debt – and they account for 47 per cent of the federal debt in public hands – worry about some kind of future default.

But the United States has a unique advantage over all other sovereign borrowers: central banks and other institutions around the world need to hold dollars as the currency most frequently used in international transactions. While this is true, America can count on selling large amounts of dollar assets, like 10-year Treasury bonds, to foreigners — very large amounts.

But for how long? The evidence is very clear from surveys on both sides of the Atlantic. People are nervous of world war-sized deficits when there isn’t a war to justify them. According to a recent poll published in the FT, 45 per cent of Americans “think it likely that their government will be unable to meet its financial commitments within 10 years”. Surveys of business and consumer confidence paint a similar picture of mounting anxiety.

The only imminent danger is that the dollar could slide sharply against Asian currencies, as it has against the euro. But the chief losers then would be the Asians. And those who panicked about the debt under President Reagan failed to see how manageable it was. It’s even more manageable today.

Hogwash. It was said of the Bourbons that they forgot nothing and learned nothing. The same could easily be said of some of today’s latter-day Keynesians!

Indeed!

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Education

U.S. Falls To 12th In The World In Percentage Of Young People With A College Degree

By Pat Garofalo on Jul 26, 2010 at 5:05 pm

When it first came into office, the Obama administration said that one of its primary education goals is making the U.S. the country with the highest proportion of college graduates in the world by 2020. “In a global economy where the most valuable skill you can sell is your knowledge, a good education is no longer just a pathway to opportunity — it is a prerequisite,” Obama said.

But reaching that goal has only gotten harder in recent years, as America’s educational attainment has plummeted. According to a new report by the College Board, the U.S. is now 12th among OECD nations in the percentage of 25-34 year olds with a college degree:

Canada is number one in terms of attainment, with 56 percent of 24-35 year olds obtaining a college degree, compared to 40 percent of Americans. Two years ago, the latest data put the United States tenth. “The growing education deficit is no less a threat to our nation’s long-term well-being than the current fiscal crisis,” said Gaston Caperton, the president of the College Board.

To get a sense of how much has to be done to catch up, consider that “the U.S. would have to add 1 million college degrees per year through 2025, on top of the 2 million degrees already awarded annually, to reach 56 percent.” Part of the problem here is that the U.S. is also falling behind in terms of percentage of the population that even attends college. Just 35 percent of 18-24 year olds were enrolled in some form of higher education in 2008, according to the National Center on Public Policy and Education, compared to more than 50 percent of South Koreans.

In order to address this problem, policymakers will have to do many things, but one of the first is improving educational opportunities for minorities:

Part of the challenge in reaching the goal of 55 percent of young Americans with an associate degree or higher lies in erasing disparities in educational attainment for low-income students and underrepresented minorities. By eliminating the severity of disparities between underrepresented minorities and white Americans, it is estimated that more than half the degrees needed to meet the 55 percent goal would be produced.

The Lumina Foundation estimates that the American economy will face a shortage of 16 million college educated workers by 2025. As former President Bill Clinton said, falling educational attainment is a real problem and “we are headed into long-term economic decline if we don’t do something about it.”

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