ThinkProgress Logo

Economy

Investigation Into Oil Industry Price Rigging Mirrors LIBOR Scandal

With Deficit Shrinking, Will Washington Focus On Jobs?

Walmart And Gap Refuse To Sign Bangladesh Safety Agreement

Romney: Employee Free Choice Act ‘Would Have A Devastating Impact On The Economy’

By Pat Garofalo on Jan 15, 2009 at 5:30 pm

romney.jpgToday, House conservatives held a hearing to discuss proposals for an economic stimulus package, with testimony from former governor and CEO Mitt Romney, among others. While most of the hearing focused on how to best cut taxes for corporations, Romney used some time during his opening statement to take a swipe at the Employee Free Choice Act:

And there is one very bad idea that is being promoted by a special interest group. It is an idea that would have devastating impact on the economy—short term and long term. It would lead investors to send their funds elsewhere, businesses to expand elsewhere and jobs to relocate elsewhere. It is the plan to virtually impose unions on all small, medium and large businesses by removing the right of workers to vote by secret ballot. Card check is a very bad idea under any circumstances. In these circumstances, it would be calamitous.

As Michael Whitney laid out at the SEIU blog, “Business leaders and CEOs are developing a new strategy to combat the Employee Free Choice Act: threaten to take jobs overseas and divest from America.” Romney’s comment certainly falls into that category.

Fearmongering rhetoric aside, the Employee Free Choice Act would actually make the economy work for everyone, instead of only those at the top. According to estimates by the Economic Policy Institute, if 5 million service workers join unions:

- 5 million workers would get a 22 percent raise on average, or an additional $7,000 a year.

- $34 billion in total new wages would flow into the economy.

- 900,000 jobs would be lifted above the poverty wage for a family of four.

- Between 1.8 million and 3 million dependent children would share in these benefits.

But Employee Free Choice is not only about workers receiving better wages and benefits. Stronger unions and a more secure workforce lead to a more productive economy. For example, one-third of all American workers joined unions between 1947 and the early 1970s, and in those years, “median family income more than doubled, productivity grew 2.9 percent a year, [and] America’s economic output nearly tripled.”

If Romney considers livable wages, higher productivity, and more economic output “devastating,” then maybe some devastation is in order.

Update

Yglesias takes on the “conservative claim that making it easier for workers to form unions will cripple the economy” by looking at international union density stats.

Climate Progress

U.S. Climate Action Partnership: Give Polluters Money To Continue Polluting

By Brad Johnson on Jan 15, 2009 at 3:46 pm

Today, in the first hearing of the House Energy and Commerce Committee under the leadership of Rep. Henry Waxman (D-CA), a coalition of corporations and environmental organizations renewed their call for an industry-friendly cap and trade system. The U.S. Climate Action Partnership made a tremendous splash two years ago by coming out in favor of a cap-and-trade system to limit greenhouse gases. Though their recommendations overly benefited polluting industries, USCAP’s call for mandatory action changed the political tide in Washington. They deserve credit for moving past conservative rhetoric that denies the need to act, and for stating that “action by the U.S. should not be contingent on simultaneous action by other countries,” a common excuse for delay.

But climate change science and politics have moved on in the past two years, and USCAP has lost its mantle of leadership. Their proposal fails to satisfy the scientific, economic, and societal principles that must underlie any “framework for legislation to address climate change”:

EMISSIONS TARGETS. USCAP’s recommended emissions limits are insufficient to prevent catastrophic climate change. They call for U.S. emissions to be reduced by at most 7 percent below 1990 levels by 2020. However, as Center for American Progress fellow Joseph Romm indicated in a recent report, “A U.S. climate bill should set a target of reducing U.S. greenhouse gas emissions 20 to 30 percent below 1990 levels by 2020.” Furthermore, USCAP calls for “generous limits on the use of offsets” of two to three billion tons of CO2 a year, which means actual emissions wouldn’t have to begin reducing until 2030.

USCAP emissions

MONEY. USCAP calls for provisions to prevent emissions permits from exceeding a “threshold price” and for “a significant portion of free allowances should be initially distributed to capped entities and economic sectors.” In other words, polluters should be protected from paying the cost of compliance with the already fatally weakened cap. This will lead to windfall profits for polluters at the expense of consumers. President-elect Barack Obama and other progressive leaders have joined the Center for American Progress in calling for full auction of emissions permits to fund public investments and protect low-income consumers from economic hardship.

USCAP members include major global warming polluters in multiple industries — chemical (Dow, DuPont, Johnson & Johnson), oil and gas (Rio Tinto, Shell, BP America), manufacturing (Alcoa, Caterpillar, Siemens, GE, Boston Scientific), automotive (Ford Motor, GM, Chrysler, Deere), and utilities (Duke, PG&E, Exelon, FPL, PNM), as well as the financial services industry that would administer a cap-and-trade system (AIG, Marsh, Xerox).

The environmental organizations in the partnership are the Natural Resources Defense Council, the Environmental Defense Fund, the World Resources Institute, the Pew Center for Climate Change, and the Nature Conservancy. However, the National Wildlife Federation has left the partnership, saying that it instead will work to “enact a cap-and-invest bill that measures up to what scientists say is needed and makes bold investments in a clean energy economy.”

Update

Friends of the Earth:

Put simply, the proposal would reward corporate polluters with hundreds of billions of dollars of giveaways, and its near-term pollution reduction targets are far weaker than what scientists have called for. The proposal is further weakened by its massive carbon offset loopholes. Were such a proposal to be enacted into law, it would fail to achieve the emission reductions we need in the U.S. and would undermine our ability to meaningfully and credibly engage in international climate negotiations. This is a dead-end approach that policymakers should reject.

1Sky‘s Gillian Caldwell:

In order to create a 21st century green economy we need bold action, not loopholes. Under this proposal, 40% of the dirtiest polluters would be allowed to keep polluting. 1Sky and its allies urge the members of the House Energy and Commerce Committee to draft effective energy policy that closes loopholes, and auctions 100% of pollution allowances.

ClimateProgress‘s Joe Romm:

This proposal is a dead end — and an even deader starting point. Shame on NRDC, EDF, and WRI for backing it. With this proposal, the U.S. Climate Action Partnership has officially made itself obsolete and irrelevant.

Greenpeace:

The U.S. government’s chief climate scientist, James Hansen, once said that the CEOs of big fossil fuel industries should be tried for crimes against
humanity. USCAP is their initial bid for a plea bargain.

Conservatives Beat The Drum For Permanent Corporate Tax Cuts

By Pat Garofalo on Jan 15, 2009 at 1:30 pm

drum.JPGAs the LA Times reported today, conservative support in Congress for President-elect Barack Obama’s proposed economic stimulus plan is “peeling off” in favor of “alternative ideas that rely even more heavily on tax reductions.” Leading this charge, the Republican Study Committee (RSC) released its preferred stimulus outline yesterday, which Matthew Yglesias noted is a “barrel full” of permanent tax cuts.

Today, Rep. Eric Cantor (R-VA) convened a hearing to further discuss the ideas that the RSC laid out, with testimony provided by former Gov. Mitt Romney (R-MA), former Ebay CEO Meg Whitman, and Grover Norquist, president of Americans for Tax Reform. During the hearing, all the witnesses continued to beat the drum for permanent tax cuts, especially for corporations:

ROMNEY: The best medicine for a sick economy is permanent tax relief…[Corporate tax cuts] would remove fear and replace it with confidence and prosperity.

WHITMAN: The number one thing that I would look at for this group is: can we lower business taxes?…I would argue that permanency and clarity are what to look for.

NORQUIST: I would argue for permanent tax cuts…That would create real and permanent stimulus.

Cutting corporate taxes is a tired conservative solution to just about everything. Remember, it was a centerpiece of Sen. John McCain’s (R-AZ) presidential campaign, even before the economic crisis hit. But as the Center for American Progress’ Will Straw wrote, permanent corporate tax cuts simply fail to provide stimulus:

The track record for such steps is poor in general, but they are particularly ill-suited for a recessionary period. After all, the reason that businesses and individuals are not investing at the moment has little to do with the taxes they may pay in the future and everything to do with a fear of losing money because there is no demand in the economy, asset prices are highly volatile, and credit is hard to come by.

Citizens for Tax Justice noted that “every dollar lost from cutting the corporate income tax would increase real GDP by just 30 cents.” That’s hardly the sort of stimulative effect that would justify slashing the corporate rate.

Switch to Mobile
ThinkProgress Signup Overlay Skip and Continue to ThinkProgress Skip and Continue to ThinkProgress

Sign Up