As my ThinkProgress colleague Zaid Jilani wrote, states have reacted to their fiscal deterioration in a couple of ways. Conservative-led governments are “refusing to responsibly raise revenues and instead slashing their states’ social and infrastructure spending,” while “progressive-led state governments are asking their states’ most prosperous citizens to sacrifice a little so that spending on the most vital programs can be protected.”
This week, two states — Minnesota and South Carolina — tried to act responsibly by raising revenues in ways that won’t damage the economic recovery. Minnesota attempted to increase its income tax on its wealthiest residents, while South Carolina attempted to boost its cigarette tax, which is the lowest in the nation. But both measures were vetoed today by each state’s respective Republican governor:
– Gov. Tim Pawlenty made good Tuesday on his threat to veto a Democratic plan to repair Minnesota’s budget because the bill includes a tax increase…”It is nonsensical to increase taxes on job providers merely weeks after I signed a bill to provide tax incentives for Minnesota businesses to grow jobs,” Pawlenty wrote to lawmakers.
– Gov. Mark Sanford announced his veto Tuesday afternoon of raising the state’s cigarette tax to 57 cents from 7 cents per pack…”In these difficult economic times, we believe it would be sheer folly to impose the largest tax increase since 1985,” he said.
Minnesota is facing a $2.9 billion deficit, while South Carolina’s lawmakers were caught “flat-footed” last week by a $213 million unanticipated shortfall. Yet both Republican governors saw fit to veto common sense revenue raisers, which could foist the effects of budget cuts onto vulnerable residents who need social services and students who have already seen education budgets slashed to ribbons.
In fact, both states have already cut education funding in response to the economic crisis. Minnesota’s proposed income tax increase would have raised $395 million, helping the state avert a “cash crunch” that could result from a recent court ruling that Pawlenty overstepped his bounds in cutting money for schools. Meanwhile, the cigarette tax increase in South Carolina — where the cigarette tax is ten cents lower than anywhere else in the country — would have gone towards placing $125 million in the state’s Medicaid trust fund.
“The question is: Are we going to be leaders who stand up and protect people who don’t need our protection, or are we going to make the choice to be leaders who stand up and vote to protect people who need us?” asked Minnesota State Rep. Ryan Winkler (D). From their actions, it’s very clear where Pawlenty and Sanford stand.
Net neutrality, a guiding principle for preserving a free and fair Internet, means that Internet service providers are not allowed to discriminate based on content for its customers. However, telecommunications firms — like AT&T, Verizon, Comcast and others — are firmly against net neutrality because they would like to increase their profits by deciding which websites customers can see, and at what speed. The telecom industry has dumped hundreds of millions of dollars into a lobby campaign against net neutrality. As the FCC now takes up net neutrality rule making, the industry is pushing an “outside approach” of hiring front groups and astroturf operatives.
This morning, representatives from various front groups launched a new coordinated campaign to kill net neutrality. Speaking on Capitol Hill, these front groups took turns decrying the evils of the principle of a fair and unbiased Internet. LULAC, which is funded by AT&T, called Net Neutrality “Obamacare for the Internet.” (LULAC was not present at the press conference. The Hispanic Leadership Fund, another group funded by the telecom industry and opposed to net neutrality, spoke at the event. We apologize for the error.) Americans for Prosperity — a corporate front group founded by oil billionaire David Koch but also funded by telecom interests — unveiled a new ad smearing net neutrality as a “government takeover” (the initial ad buy is $1.4 million dollars). And Grover Norquist, representing his “Americans for Tax Reform” corporate front group, said net neutrality is like what China does, “putting policemen on every corner, on the street or on the Internet.” Watch it:
ThinkProgress has obtained a PowerPoint document which reveals how the telecom industry is orchestrating the latest campaign against Net Neutrality. Authored by representatives from the Atlas Network — a shell think tank used to coordinate corporate front group efforts worldwide — the document lays out the following strategy:
– Slides 7-8 calls for the campaign to target “libertarian minded internet users and video gamers” and “social conservative activists” with anti-government messages and a rebranding of net neutrality as “Net Brutality.”
– Slide 9 calls for a strategy of creating a Chinese blog to compare net neutrality to Chinese government censorship, outreach via social networking platforms like Twitter and Facebook.
– Slides 10-11 detail how representatives met at Grover Norquist’s infamous “Wednesday morning meeting” to orchestrate the new campaign. Norquist is known to use his Wednesday meetings to plot strategy and conservative coalition building towards lobbying goals.
The PowerPoint was created on April 14th, shortly before the campaign website officially launched. The “Net Brutality” website relies heavily on Americans for Prosperity sources, as well as a website called NetCompetition.org — which is openly funded by the American Cable Association, At&T, Comcast, and the US Telecom Association.
During the Jack Abramoff investigation, Norquist was exposed for selling support from his front groups to corporations. In one damning e-mail, Norquist is promised $50,000 dollars in exchange for providing his Americans for Tax Reform support to one of Abramoff’s clients. Today, Norquist was not only parroting the PowerPoint talking points at the press conference, but he also brought in other key conservative movement leaders and Republican lawmakers to the event.
In addition to the front groups, the loudest voice against net neutrality is still Glenn Beck, who has smeared free Internet proponents as Marxists and Communists, and has adopted the attack that net neutrality constitutes a “government takeover.” However, it is important to realize that even Beck is being fed with opposition research dug up by operatives at Americans for Prosperity. This research document, compiled by Americans for Prosperity staffers, lays out point by point the attacks Beck has used in the past few weeks to disparage net neutrality supporters. If Beck picks up this new outreach to video game enthusiasts and the false comparison to Chinese censorship, then the impact of the “Net Brutality” PowerPoint will be even more apparent.
Telecom firms like AT&T and Verizon are among the most profitable in the world, yet America lags behind other countries in terms of broadband access and speed. Instead of dumping lobbying money into anti-net neutrality front groups and fear-mongering campaigns, the telecom industry should invest in improving service and accessibility.
Right-wing media outlets have seized upon McCullagh’s erroneous report that this presentation was created by students learning about free market campaigns. One of the authors of the “No Net Brutality” campaign is David MacLean, a Canadian who has worked at a myriad of big business front groups, including the Canadian Taxpayers Federation and the Alberta Enterprise Group. MacLean is featured in the PowerPoint standing outside of Norquist’s headquarters in DC. He has worked as a professional in front group communications since 2002.
,CNET’s Declan McCullagh has posted an item critical of this post. However, McCullagh misleads his readers by claiming the presentation was created only by “students” unrelated to any industry groups or lobbyists. The author and administrator of the “No Net Brutality” website is Kristin McMurray, a staff Project Manager of Americans for Limited Government’s Sunshine Review front group. McCullagh playfully acknowledges the presenters met with the lobbyist-organized “Wednesday morning meeting,” but takes their word that their “three minute” presentation had no influence. Of course, as this post notes, Norquist was caught yesterday parroting the same talking points from the presentation, along with the other telecom industry-funded front groups at the event. As Stopthecap.com observed yesterday, McMurray is using a professional PR service to track Internet discussion of her anti-net neutrality site. Grassroots, indeed.
Recently, the push in Congress to implement a bank tax on the largest financial firms seems to have lost a bit of steam, and the tax is not being included in the financial regulatory reform legislation currently being debated in the Senate. And one of the main arguments against implementing the tax is that it will undermine U.S. competitiveness, as other countries may not impose a similar fee of some kind.
Today, the Senate Finance Committee held a hearing on the bank tax, where Chairman Max Baucus (D-MT) — who has said there’s not much doubt that a bank tax will happen — said that the U.S. should “step up and lead” on this issue, and set an example for the rest of the world:
The U.S. could show more leadership by leading, by acting. You know, if we sit around waiting for all these other countries to agree my guess is not much is going to happen. A lot of countries look to the United States for leadership. If the United States does something that’s reasonable, that leads, I think there’s a good chance other countries will take note of that and try to figure out a way to do something similar, if not exactly the same. Sometimes you’ve got to step up and lead. But you’ve got to talk while you’re leading and listen while you’re leading, but you’ve got to take some action too.
Baucus is correct here. For one thing, the law that created the Troubled Asset Relief Program (TARP) in 2008 stipulates that any money lost through the program must be recouped by a fee on the financial system, so it’s really not a question of whether such a tax will come into being, but when and how. But in addition to the statutory requirement, there are good economic reasons for levying a fee on the biggest financial institutions. It would make the cost of being a large financial institution marginally higher, and would help address the funding advantage that large banks enjoy over their smaller counterparts.
Plus, the tax as currently envisioned by the Obama administration is incredibly small when compared to the vast amount of assets in the banking system. That’s why the Brookings Institution’s Douglas Elliot told the committee that he believes the concern about banks moving their operations offshore in reaction to the tax is overblown:
Banks and thrifts reported $13 trillion of assets to the FDIC, which does not count considerable investment banking and other non‐bank assets. Thus, the industry could cover the $9 billion fee by charging less than an additional 0.1% on each dollar of assets, on a pre‐tax basis, assuming the fee is not tax‐deductible. In practice, the industry might pass along half of this to customers, or approximately 0.05% per dollar of assets, and absorb the other half by taking a 1% hit to income plus non‐interest expense. For comparison, the Fed would never bother with an interest rate move this small, because the effect on the overall economy would be minor.
Sens. Johnny Isakson (R-GA) and Saxby Chambliss (R-GA)
Yesterday, the National Mediation Board, which oversees labor-management relations under the Railway Labor Act (RLA) changed an antiquated rule for RLA union elections, which stated that a majority of all workers — including those on furlough, military leave and extended medical leave — had to approve the union, instead of a majority of voting members. So workers who didn’t cast a vote were counted as voting against the union.
The NMB’s ruling means that, henceforth, RLA elections operate like any election for political office, with uncast ballots simply not being counted. But the companies affected by the change, particularly those in the airline industry, liked the higher bar for unionization set by the previous rule. So the Air Transport Association — acting on behalf of Delta Airlines, Jet Blue, and United Airlines, among others — has launched a lawsuit to try and prevent the rule change from being implemented.
And yesterday, Georgia’s two Republican Senators, as well as the ranking member of the House Education and Labor committee, threw their support to the corporations trying to keep the bar for unionization unjustifiably high:
– Sen. Johnny Isakson (R-GA): I will use all available tools at my disposal…to see that this assault on employee rights does not stand.
– Sen. Saxby Chambliss (R-GA) said he would “continue to work to see that this change does not stand.”
– Rep. John Kline (R-MN), “also slammed the rule change, saying the board ‘imposed a quick fix at the behest of organized labor.‘”
I’d like to see what these lawmakers think of a proposal to count all uncast votes towards their opponent’s total in their next election. That, after all, is the system that they are trying to preserve.
Of course, despite their appeals to “employee rights,” the GOP’s opposition is really about protecting the corporations that may be affected. Delta, which is largely non-union, has its headquarters in Atlanta, Georgia, and is currently the largest contributor to Isakson’s reelection campaign. It is the fifth largest contributor to Isakson in his career.
This is very similar to Sens. Bob Corker (R-TN) and Lamar Alexander (R-TN) fighting to preserve an inequity in labor law that makes it more difficult for drivers at Memphis-based Federal Express to unionize. And the end goal of all these efforts is to keep in place rules that arbitrarily deny collective bargaining rights to workers who legitimately want them.