Our guest blogger is Sima J. Gandhi, a Senior Policy Analyst with the economic policy team.

As part of his continuing quest to reduce government “to the size where we can drown it in the bathtub,” anti-tax crusader Grover Norquist now wants to hold government hostage to its own deficits. And he has a good plan for doing this.
Norquist is demanding that spending cuts to tax expenditure programs be paired with tax cuts. He’s asking congressional candidates to sign a pledge to “oppose any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates.” This means savings generated from cuts to the nearly $1.2 trillion in tax expenditure spending would be immediately eaten up by a tax cut, instead of put toward advancing important priorities like closing the deficit.

Tax expenditures are government spending programs that are delivered through the tax code. They use tax subsidies, such as deductions and credits, to transfer government funds. This type of spending constitutes 25% of government spending, and supports a variety of programs including ones that support low-income housing development; corporate research & development; oil, gas, and timber companies; and even small businesses that purchase SUVs. Some of these subsidies make sense. Others warrant a closer look. Funding for those that don’t work should be rightly eliminated. And funding for those that do make sense should continue.

Though tax expenditures are a form of government spending, they feel like tax cuts because they are implemented through the tax code. This makes them politically popular; politicians find it easier to pass government spending programs when they can sell them as tax cuts.

What’s more is that Congress fails to regularly review these tax expenditures, and the government’s budgeting process largely ignores tax expenditure spending. This lack of scrutiny, combined with their popular veneer, makes them a privileged form of government spending that once put in place are hard to dislodge.

Some policymakers are chipping away at this veneer. Representative Lloyd Doggett (D-TX) delivered a speech on the importance of scrutinizing tax expenditures, the White House proposed cutting tax subsidies for oil and gas companies, and even Congress took a step in the right direction when it cut a $20 billion subsidy to paper producers in order to help pay for health care reform.

But the point is that despite their veneer, they are a form of government spending. That’s why Norquist’s pledge to match cuts in deductions and credits with tax cuts is absurd. Government should rightly cut spending where it doesn’t make sense. But the savings should be used to close our fiscal deficit, pay for the protection provided by police and fire fighters, fund education and healthcare programs, and build critical infrastructure like public roads. Cutting spending and cutting taxes is just another way for saying we should return to a Hobbsian state of nature where life is “solitary, poor, nasty, brutish and short,” a “war of every man against every man.” Come on Norquist, let’s get real. A plan to pair spending cuts with spending is an effective spin on a silly plan to drown the government.

Our guest blogger is Karla Walter, a Senior Policy Analyst with the American Worker Project at American Progress.

In the wake of the tragedy at Massey Energy’s Upper Big Branch mine that killed 29 miners, the national media finally uncovered Massey CEO Don Blankenship’s long record of safety violations, environmental damages, and unfair labor practices. Massey’s dismal record suggests that the tragedy wasn’t a freak event or an act of God, but the result of a reckless employer that too often put profits before people.

The Department of Labor unveiled a new public enforcement database last week, the Department of Labor Enforcement Data Site, that increases accountability for companies that violate workplace laws, including mine safety laws. This resource — created in response to the President Obama’s Open Government Initiative — shines a light on practices that are unacceptable and gives the public a chance to get them changed. The site, now in beta form:

– Discloses company-specific data on minimum wage and child labor law violations for the first time without a freedom of information request,

– Unifies data on violations of workplace safety and health, diversity, and employee benefits plan reporting laws, and

– Allows the public, advocacy groups, and particularly workers to track enforcement results, exerting pressure on specific scofflaw employers and the federal enforcement agencies

Labor Secretary Hilda Solis has dubbed herself “a new sheriff in town,” and one year into her administration has made effective and innovative enforcement of worker protection laws a top priority. The site is another signal that Solis is serious about protecting America’s workers. While some of the data—including the mine safety data—are available in other locations, by unifying it in one location her department is increasing the public’s ease of access. As Massey’s unsafe mines sadly reveal, if there’s one workplace violation at a firm, there may be other kinds of violations at that site.

The Center for American Progress Action Fund’s American Worker Project has long advocated for a centralized, public website containing workplace enforcement data from all Labor enforcement agencies. The department needs to implement its intended improvements to make the site fully functional, because enforcement of worker protection laws cannot be strengthened fast enough for the safety and well-being of all working Americans. Public oversight and access to enforcement data will be a critical part of increasing accountability and improving oversight in the future.

Last week, the Securities and Exchange Commission charged that Goldman Sachs defrauded investors by failing to disclose conflicts of interest in subprime mortgage investments it sold as the housing market collapsed in 2007. Fabrice Tourre, a Goldman Vice President, is accused of encouraging investments into subprime mortgage securities he knew would fail, while working with a hedge fund to bet against its success. Referring to himself as the “the fabulous Fab,” Tourre boasted in e-mails about his scheme to defraud investors.

Reacting to the SEC’s probe into Goldman, UK Prime Minister Gordon Brown over the weekend called for his own investigation of the firm. “This is probably one of the worst cases that we have seen,” Brown said. The Royal Bank of Scotland, a bank buoyed by a UK taxpayer funded bailout during the financial crisis, was one of the biggest victims of the alleged fraud, losing $841 million dollars. Earlier today, Britian’s Financial Services Authority announced that it will in fact start a formal enforcement investigation into the London unit of Goldman Sachs — where Tourre is currently employed.

The financial industry is fighting back. On Monday, the UK division of legal and lobbying giant DLA Piper released a poll of business leaders showing that an overwhelming majority (60%) want a Tory leader to take over when elections take place on May 6. 36% of respondents specifically expressed hope for the conservative leader David Cameron to become the next Prime Minister. The poll, which is being promoted in the British press, is accompanied by a message from DLA Piper UK’s London Managing Partner Catherine Usher calling for more free market reforms and an end to the Labour “regime”:

It will come as no surprise that our companies view tax as an area for major reform, with the current regime viewed as discouraging business activity in the UK and putting us at a disadvantage to other jurisdictions. [...] The alarm bells from businesses over the issue of red tape and employment legislation have grown louder over the past few years.

What DLA Piper UK does not disclose in its poll, and what the British media is largely ignoring, is that DLA Piper UK counts Goldman Sachs, as well as many other banks and investment firms, as clients. Like their American counterparts in the Republican Party, the Tories have been quietly courting the financial industry through a new organization called the Conservatives’ City Circle. At the same time, Tories are trying to present themselves as supportive of responsible banking reform and taxation. As Left Foot Forward, a progressive UK blog, has detailed, the Tories have raised close to £200,000 from financial firms as the election approaches. The Tories’ duplicitous campaign unraveled for a moment last month when Tory MEP Nirj Deva railed against an international bank tax on grounds that it would “give money to a whole bunch of people who will probably steal it.”

While President Obama mounts his effort to impose a responsibility fee and new financial regulations, Republicans have met with top bankers to trade campaign contributions for a promise to fight change. As ThinkProgress first reported, Wall Street lavished Scott Brown (R-MA) with contributions and support front political attack groups for his special election to the US Senate. Recently, Sen. Mitch McConnell (R-KY) met with hedge fund managers before announcing his opposition to financial reform. Brown, along with his GOP colleagues, have mirrored the Tories and defended banks from a responsibility tax, while simultaneously telling the public that they support reform.