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Rep. Dreier Implies Democratic Economic Policies Are To Blame For Poverty Increase

Today, the Census Bureau released its poverty data for 2009, which confirms the extent to which the Great Recession has ravaged American households. The poverty rate rose from 13.2 percent to 14.3 percent, which is the highest its been since 1994. For working age people (18 to 64) the 12.9 percent poverty rate is the highest since 1965.

It was almost inevitable that political finger-pointing would commence with the release of the data, and Rep. Peter Dreier (R-CA) didn’t disappoint, taking to the House floor and implying that Democratic policies were to blame for the jump:

Well, the policies that we’ve seen over the past twenty months have killed jobs. As the report that is coming out this morning is that the increase in the poverty rate has been nearly unprecedented. We have lots of very very unfortunate economic indicators out there.

Watch it:

Of course, it was the global financial meltdown — which cost millions of Americans their jobs — that is to blame for the spike in poverty. And contrary to Dreier’s assertion, steps that the Obama administration and Democrats in Congress took prevented an ugly situation from being much worse. According to the Center on Budget and Policy Priorities, just seven targeted provisions of the American Recovery and Reinvestment Act (the stimulus package) kept 6 million people out of poverty.

Plus, another 3.3 million people were kept out of poverty by extended unemployment benefits:

House Republicans unanimously opposed the Recovery Act and fought tooth and nail against extending unemployment benefits, without which, the poverty rate would have been even worse.

And let’s not forget the dismal poverty record that occurred on the last administration’s watch. Under President Bush, the number of adults in poverty jumped 26 percent, while the number of children in poverty increased by 21.4 percent. In all, the Bush years saw an additional 8.3 million people fall below the poverty line. This all came after President Clinton made impressive reductions in both overall and child poverty.

Obviously, though, more has to be done to ensure that adequate policies are in place to reduce poverty. As Melissa Boteach pointed out today, Congress has two opportunities to do just that, by extending the Temporary Assistance for Needy Families Emergency Fund (a successful jobs program) and reforming the earned income and child tax credits. “Between 2003 and 2007 we experienced the first-ever economic ‘recovery’ on record where productivity and profits grew but poverty went up and median incomes fell,” Boteach wrote. “We can and must do better this time around.”

PG&E Never Used $5 Million Rate Hike It Touted For Repairs To Fix Pipeline It Admitted Was ‘High Risk’

pg&e Last week, a natural gas pipeline exploded in a San Bruno, California, neighborhood. The explosion, which let loose “a thunderous roar heard for miles,” destroyed scores of homes and killed at least four people.

Now, a consumer advocacy group has discovered that the company that operated the faulty pipeline, Pacific Gas & Energy (PG&E), had classified it as “high risk” and failed to utilize the funds it had collected from a rate hike to repair it. The Utility Reform Network (TURN) has obtained documents detailing the energy giant’s request to the California Public Utilities Commission (PUC) for a rate hike in 2007. PG&E asked the PUC for permission for a $5 million rate hike to “replace a section of the same pipeline that blew up in San Bruno.” The PUC approved PG&E’s request, allowing it to hike its rates so that it could repair the line in 2009.

Yet the energy giant failed to go through with its scheduled repairs. And in 2009, it once again requested a rate hike from the PUC, again for $5 million. In its request, PG&E warned that if “the replacement of this pipe does not occur, risks associated with this segment will not be reduced. Coupled with the consequences of failure of this section of pipeline, the likelihood of a failure makes the risk of a failure at this location unacceptably high.” Despite these admitted risks, the company could only promise to make its repairs by 2013.

Local news station KTVU asked PG&E President Chris Johns why his company failed to make the repairs on schedule, despite recognizing that the pipeline was a considerable risk and using a rate hike on consumer to do it. “Some things happen when we’re going down, and a year later maybe some other item becomes more emergent that we need to fix,” replied Johns. “And so that’s why we will redirect funds to take care of the things that are urgent today, and then go back and say what are the things that are urgent tomorrow.”

While the company failed to spend the $5 million it took from customers in 2009 to repair the faulty pipeline, it did spend that exact same amount in the same year on bonuses for its executives, according to TURN. Many California families are worried about future pipeline disasters, but the company is refusing to reveal the locations of its other underground pipelines, citing possible terror threats. Assemblyman Jerry Hill (D-San Mateo) is considering legislation to force PG&E to reveal the locations.

Update

Calitics notes that while PG&E failed to use the millions it charged consumers in rate hikes to repair its pipeline, it did manage to spend millions of dollars supporting Proposition 16, which would’ve allowed it to secure its monopoly over the power sector in the state.

After Threatening To Filibuster Unbalanced Budget, Paul Endorses Extending All Bush Tax Cuts Without Offsets

This week, a spokesman for Kentucky’s Republican senate nominee Rand Paul said that, if he’s elected, Paul “will vote against and filibuster any unbalanced budget proposal in the Senate.” Leaving aside Paul’s ignorance regarding whether or not budgets can be filibustered at all (they can’t), eliminating a $1.3 trillion deficit in a single year is economic insanity and totally unrealistic. In fact, Rudolph Penner, who ran the Congressional Budget Office under President Reagan, called it “implausible.”

And the task is going to get a whole lot harder if Paul has his way when it comes to the Bush tax cuts, as he told the Lexington Herald-Leader that he would “absolutely” vote to extend all of the tax cuts, even if they aren’t paired with corresponding spending cuts:

Paul, who has built his campaign around opposing big government and a $13.4 trillion national debt, said it would be better to pair the tax cuts with a plan to reduce spending. However, asked if he would vote to extend the tax cuts without corresponding spending cuts, Paul said, “Absolutely. The money is not the government’s. It is ours.”

President Obama, of course, has proposed extending the tax cuts for the middle class, while allowing those on for the richest two percent of Americans to expire. The entire package costs more than $3 trillion over ten years, while extending just the tax cuts for the rich costs $830 billion over ten years (and $36 billion next year alone). So Paul would dig the fiscal hole that much deeper before turning to the spending side of the ledger.

But let’s take a look at what Paul would have to cut just to eliminate a $1.3 trillion deficit. Discretionary spending — inclusive of defense spending — in 2010 will be about $1.4 trillion. So Paul would have to get rid of almost the entire discretionary side of the budget (which includes some veteran’s benefits, operational funding for Iraq and Afghanistan, and the Nuclear Security Administration) to achieve his goal.

The non-defense discretionary side of the budget — which is where education funding, housing assistance, FEMA, the FBI, the Drug Enforcement Administration, Immigration and Customs Enforcement, and the Secret Service all reside — comes to about $530 billion, nowhere near enough to close the gap Paul wants to eliminate.

So the upshot is that Paul would have to raid the mandatory budget — which is largely composed of Medicare, Medicaid, and Social Security — to entirely eliminate the deficit in a single year, unless he is planning to ditch the FBI and the Secret Service overboard. And extending all of the Bush tax cuts only makes the problem worse. All of which goes to show that Paul is a deficit peacock: happy to score political points by railing against government spending, but willing to increase that spending by hundreds of billion if it means cutting taxes for rich people.

Coburn Cites Cost To Justify Obstructing Deficit-Neutral Food Safety Bill

Last year, the House passed the Food Safety Enhancement Act of 2009 on a 283-142 vote, with 54 Republicans joining 229 Democrats in approving the measure. Since then, however, the Senate’s version (the Food Safety Modernization Act) has languished.

The bill would give the Food and Drug Administration the power to recall contaminated food products (which it is currently unauthorized to do) and increase the number of inspections that occur at food facilities and farms. Currently, some facilities are only inspected every other decade.

Especially considering the salmonella outbreak that occurred last month — with 1,300 illnesses linked to eggs from Iowa — this bill seems like a no-brainer, and was headed for passage in the Senate until Sen. Tom Coburn (R-OK), “Dr. No,” came along:

Coburn’s office confirmed to POLITICO on Tuesday that the Republican is objecting to moving forward with the bill on the grounds that it will add to the burgeoning federal budget…”Yes, he’s concerned the bill is not offset,” said Coburn spokesman John Hart. “We can’t afford to spend money we don’t have any longer.”

As Jamelle Bouie put it, “similar measures have been in place for seafood and juice producers since the 1990s and are widely thought to have been effective in reducing outbreaks. It’s pretty much accurate to say that Coburn’s objection marks him as resolutely pro-food contamination.”

Coburn’s cost concerns are also off base, because, according to the Congressional Budget Office, the bill in question is deficit neutral. It authorizes $1.4 billion in spending from the FDA, but does not set new funds. In fact, in the official CBO score, there is simply a string of zeros under “net increase or decrease in the deficit.” “The revenue and direct spending section of the score only talks about possible revenue from penalties and makes no mention of spending because there is no direct spending,” a Democratic aide explained.

“Government has to respond to protect consumers of this country and also to protect businesses because if people are scared to buy certain products they’re not going to go shopping,” said Sen. Amy Klobuchar (D-MN), who co-sponsored the legislation. “And that’s just not right.” But Coburn — as he tends to do on so many other pieces of legislation — is holding up the show over concerns that have no basis in reality.

(HT: Jamelle Bouie)

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