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Republican Freshman Blames Obama For Debt From Iraq War

Rep. Mo Brooks (R-AL)

As MSNBC host Contessa Brewer discovered today, Republican Rep. Mo Brooks (AL) does indeed have an economics degree. But in flexing his supposed expertise, Brooks decided to deploy the GOP’s disingenuous talking point that the nation’s debt crisis was somehow created by President Obama for President Obama.

Parroting the Republican claim that the GOP has already conceded in the debt negotiations by agreeing to consider raising the debt limit at all, Brooks declared that this whole debacle is “[Obama's] debt. It’s his debt ceiling.”

Brewer, however, noted that, given the cost of the Iraq and Afghanistan wars, someone else — namely President George W. Bush — might also be responsible for the debt. But Brooks decided that that debt was still Obama’s fault as “he could’ve removed our troops from Iraq and Afghanistan” if “he had so chosen”:

BROOKS: We have already compromised. Why should we give Barack Obama $2.4 trillion? It’s his debt. It’s his debt ceiling. We have already agreed to give him $2.4 trillion if he will just agree with us to solve the problem. And a long-term solution, the only long-term solution, is a balanced budget constitutional amendment.

BREWER: Why do you lay all that debt at the feet of President Obama when it’s clear that the wars in Iraq and Afghanistan added to the nation’s debt?

BROOKS: It did. And he’s the commander-in-chief and he could’ve removed our troops from Iraq and Afghanistan at any point of time if he had so chosen.

Watch it:

It is important to note that Obama has called to remove troops from Iraq and Afghanistan, plans which will reduce costs by $42 billion. But more importantly, while Obama certainly could lower the continuing costs of the war through faster withdrawal, he could not have stopped the massive blow Bush landed on the debt.

At the start of his term, Bush inherited a $230 billion surplus. At the end, he had added more than $4 trillion to the national debt, “the biggest increase under any president” at that time. In June of 2008, the costs of the Iraq and Afghanistan wars alone hit $850 billion, or more than $1.5 trillion when veterans’ benefits and other indirect costs are included.

What’s more, 130 Republicans voted to raise the debt ceiling to allow for Bush’s spending spree. And as the economic degree-heavy Center for Budget and Policy Priorities notes, it is Bush’s policies that “explain virtually the entire federal budget deficit over the next ten years.”

In order for Brooks to win his blame game, Obama would have to go back in time, elect himself president in 2000, reverse his positions, and go to war in Iraq and Afghanistan. It’s a hollow accusation — unless, of course, Brooks’ economics degree came with a concentration in time travel.

NEWS FLASH

Wells Fargo Fined $85 Million By Fed Over Its Subprime Mortgage Lending Practices | In its largest consumer protection enforcement action ever, the Federal Reserve today slapped an $85 million penalty on Wells Fargo, a bank scrutinized for pushing subprime loans on borrowers who qualified for lower prime lending rates. According to the official press release, Wells Fargo received the order both for its strong-arming of borrowers into subprime loans and for falsifying income information on mortgage forms. In addition to the civil fine, the Federal Reserve mandated that the mega-bank compensate those borrowers who were adversely affected, estimated to number “between 3,700 and possibly more than 10,000.” Wells Fargo received $25 billion in the taxpayer-funded bailout.

Sarah Bufkin

Leading GOP Mayor Says Failure To Raise Debt Ceiling Would Have Disastrous Consequences For His City

Mesa, Arizona Mayor Scott Smith (R)

ThinkProgress noted earlier that failing to raise the federal debt ceiling could have severe impacts on state budgets, as state government could see billions of dollars of federal aid vanish overnight. But forcing the federal government to implement a 40 percent budget cut overnight — which is what it would have to do were the debt ceiling not raised — would also adversely impact local government. The U.S. Conference of Mayors is convening this week in Los Angeles, where it will urge Congress to strike a deal to raise the debt ceiling, thus avoiding foisting more pain onto local governments.

Today, we spoke with the conference’s vice president — Scott Smith, the Republican mayor of Mesa, Arizona — who said that failure to raise the debt ceiling is going to severely impact his city’s ability to care for its most vulnerable residents:

Anything that upsets the potential for any kind of recovery creates huge problems for the city… We’re sort of at the bottom of the food chin. When you have someone out of work, when you have someone who’s homeless, when you have someone with mental health issues, any interruption, anything that disrupts the economy, hurts our ability to help them.

Many of the social ills that we experience, you can’t just ignore. We have people who are homeless, we have people who are unemployed. They don’t just go away when governments cut their budgets…These are human beings, they still have needs, they still have problems…Our biggest concern is when there’s an across the board cut in spending without thinking about these different needs, you end up paying more.

Mesa is the 38th largest city in the U.S., and the Phoenix-Mesa metro area currently has an unemployment rate of 8 percent.

Smith blamed both parties for the standstill over the debt ceiling, but urged a balanced approach to resolve the issue, saying, “We hope that at the end of the day both sides come together and recognize that there does need to be a balanced approach, because a balanced approach is what solves the problem.” “The reality is the Republicans aren’t going to get 100 percent of what they want and the Democrats aren’t going to get 100 percent of what they want,” Smith has said previously.

House Republicans May Shutdown The FAA Over Anti-Union Demand

The Federal Aviation Administration’s (FAA) operating authority expires on Friday and the air travel safety agency may not open again Monday, since Congress has thus far failed to pass a re-authorization and funding bill. The FAA has been reauthorized without much controversy 20 times, but now, House Republicans are insisting on including a provision to weaken collective bargaining rights for airline workers.

Republicans want to overturn a 2010 ruling by the National Mediation Board, the federal agency that mediates labor disputes for airline and railroad workers, which would make union elections more fair and democratic by counting votes of only those voting, instead of all eligible workers. Naturally, Republicans are opposed to any expansion of workers’ rights and are now threatening to shutdown the agency if they don’t get their way, since the Senate has made it clear it will not approve the House version of the re-authorization bill and President Obama has vowed to veto it.

Fortunately, air travel would not be seriously affected in a shutdown, as air traffic controllers are considered “essential” employees and would thus stay on the job. But a shutdown could cause other problems, including furloughing some or all of the 32,000 FAA workers who are not air traffic controllers.

As the deadline approached, House Transportation Committee Chairman John Mica (R-FL) added a provision that would eliminate federal subsidies to rural airports — specifically, those in states represented by key Democratic senators. The provision targets airports in the states of Sens. Harry Reid (D-NV), the majority leader; Jay Rockefeller (D-WV), chairman of the committee which has primary jurisdiction over FAA legislation; and Max Baucus (D-MT), chairman of the committee that has jurisdiction over the aviation tax portions of the bill.

In a letter to Mica, Rockefeller called the move a dirty trick in “retaliation” for the Senate’s refusal to bend to the GOP’s will. Mica didn’t really deny this, saying at a press conference:

It’s just a tool to try to motivate some action to get this resolved,” Mica says, adding that the NMB issue is being moved “at the highest leadership levels of the House and Senate and beyond my ability to resolve.”

Still, Mica is wiping his hands clean in the event of a shutdown. “[I]t is not my fault,” he told the Hill. “It will be the responsibility of the other body who does not take this up and pass it. They will be furloughing people and putting people out of jobs.”

Climate Progress

Car Makers Oppose Fuel Standards that Would Save Consumers $150 Billion

The auto industry is starting a media blitz this week designed to fight new fuel economy standards that research groups say will create over a half million jobs, save consumers $150 billion and are supported by three quarters of Americans.

The Alliance of Automobile Manufacturers is running radio ads in 6 states and the District of Columbia claiming that higher fuel standards will limit consumer choice and hurt the economy:

Some in Washington have suggested as much as a 100 percent increase over current standards. Imagine how that would affect our state. Families would be hit with higher car prices.  Small businesses dependent on vans, SUVs or pickups would face limited vehicle choice. And, even the government is predicting a drop in auto sales from what amounts to an electric vehicle mandate.

But those claims run counter to what many political leaders and consumer advocacy groups are reporting.

Current standards passed in 2009 raise the average fuel efficiency for automobiles to 34 mpg by 2016, up from 21 mpg today. The most aggressive plans would raise those standards to 56 mpg by 2025, a move that was lauded by a group of 15 retired Republican politicians in June:

Reductions in fuel consumption could not come at a more important time. With thousands of U.S. troops fighting overseas, unrest in the Middle East and consumers at home feeling the pain at the pump we must resolve to unshackle ourselves from the world oil market….  If oil continues to be a primary driver of our economy and security, we will hand our destiny to other nations, many of which do not share our interests.

The Union of Concerned Scientists issued an analysis finding that a 6-percent increase in fuel efficiency through 2025 could cut oil imports by 1/3. In addition, the sustainability consultancy Ceres found that a 6-percent pathway could create up to 700,000 jobs due to increased manufacturing activity and save consumers over $150 billion over the next two decades.

Read more

NEWS FLASH

States Will Be Forced To Cut Tens Of Billions Of Dollars If The Debt Ceiling Isn’t Raised | According to the Center for American Progress’ Michael Linden and Jordan Eizenga, states could lose anywhere from $36 billion to $56 billion if the debt ceiling isn’t raised, due to the federal government being forced to cut back on state aid. “Each year the federal government funds hundreds of billions of dollars in state services,” they noted. “In fact, state governments rely on the federal government for between 25 percent and 50 percent of their revenue. These services will find themselves on the chopping block if the debt ceiling is not raised.” Massachusetts Gov. Deval Patrick (D-MA) has warned that “state governments are still reeling from the recession and can ill afford to bear the brunt of such a preventable crisis.”

Republican Rep. Tom McClintock Takes Credit For Stimulus Project Creating 400 Jobs In His District

Rep. Tom McClintock (R-CA) has been a vocal critic of President Obama’s Recovery Act, which was enacted in early 2009 despite McClintock’s “no” vote. The northern California congressman even compared the program to the economic policies of the Soviet Union. “We know of many cases where massive government spending and borrowing has destroyed economies and brought down great nations – one need look no further than the old Soviet Union,” McClintock said.

However, McClintock was more than happy to celebrate a new stimulus-funded drug rehabilitation clinic in Grass Valley recently. Appearing with local officials, McClintock praised the construction of the Community Recovery Resources’ new Center for Hope, which is financed with a 40-year low interest $9,317,000 loan enabled by the stimulus program. “This is your victory,” McClintock told the crowd, shortly after appearing with a ceremonial shovel. View a picture, taken by reporter John Hart, at the event:

Rep. McClintock (R-CA) breaking ground at a stimulus project. McClintock is third from the right, wearing a suit and tie.

As reporter Brian Hamilton noted, the project is expected to bring 400 construction jobs to the area.

This isn’t the first time McClintock has been caught as a stimulus hypocrite. Last year, California Watch reported that McClintock was among the many anti-stimulus members of Congress to quietly lobby the Obama administration for more funds. McClintock wrote at least five letters asking for money for transportation grants.

Gang Of Six Plan Reduces Social Security Benefits By $1,300 A Year, Cuts Corporate Tax Rates

Yesterday, President Obama all but endorsed the deficit reduction plan outlined by the Gang of Six senators. The plan still faces numerous obstacles — it’s incredibly vague on the details, has critics on both sides of the aisle, and may not even be ready by the Aug. 2 default deadline. Liberal Democrats have pointed out the plan is far from a balanced approach, asking seniors and the working poor to bear the brunt of the pain without asking the wealthy or corporations to sacrifice at all.

Two members of the Gang of Six, Senators Saxby Chambliss (R-GA) and Kent Conrad (D-ND) were positively crowing about the conservative bona fides of their plan yesterday on MSNBC. Because the proposal will actually be scored as a $1.5 trillion tax cut under current law (with the Bush tax cuts set to expire in 2012), they are confident that House Republicans, who have vowed never to vote for a tax increase, will go for it.

Watch it:

The Congressional Budget Office will score the plan as a $1.5 trillion tax cut, as it lowers the corporate tax rate from 35 percent to between 23 and 29 percent, eliminates the alternative minimum tax, and lowers personal income tax rates. But by closing loopholes, the Gang of Six says they’ll raise $1.3 trillion in revenue.

The disparity can only be explained because they employ an accounting gimmick — the two projections use different CBO baselines. The tax cut number is compared to current law, which assumes the Bush tax cuts will expire and the AMT will take effect, neither of which seems likely to happen. The revenue number is compared to a “plausible baseline” (which assumes expiration of the high-end Bush tax cuts).

The plan also recommends “reforming” Social Security in ways that will even affect current retirees. But not a penny of the money saved will go to deficit reduction, which begs the question — why include Social Security at all? The Gang of Six has said all the changes will go toward securing the long-term financial security of the program, but Social Security is already solvent until 2037 and does not contribute to the deficit.

The cuts in the Gang of Six plan aren’t minor, either. It proposes a chained CPI adjustment to Social Security, which may not be a bad idea when combined with other measures to boost benefits and strengthen the program, but on its own is tantamount to a $1,300 cut each year for recipients over their lifetimes. Strengthen Social Security co-chair and former Obama adviser Nancy Altman has denounced the idea as an overly harsh cut. “The chained-CPI is poor policy, and given that seniors vote in disproportionately high numbers, it is equally poor politics,” she said.

Bachus: Passing Bills To Weaken The Consumer Protection Bureau Is GOP’s Way Of Making The Bureau ‘A Success’

House Financial Services Committee Chairman Spencer Bachus (R-AL)

The House today is scheduled to vote on a bill that would significantly weaken the newly created Consumer Financial Protection Bureau, which officially opens for business tomorrow. The bill — sponsored by House Financial Services Chairman Spencer “serve the banks” Bachus (R-AL) — would abolish the position of Bureau Director, instead instituting a five-person board to run the agency, and also make it easier for the Financial Stability Oversight Council (FSOC) to overturn the Bureau’s rules.

These two changes would strike at the heart of the bureau’s independence and weaken its ability to protect consumer from financial industry excess. However, according to Bachus, the bill’s are merely the GOP’s way of ensuring that the bureau is a “success“:

Speaking with reporters, House Financial Services Committee Chairman Spencer Bachus (R-Ala.) said he did not want to see the bureau eliminated, but refined…“Now that the CFPB’s been passed into law, I think it’s incumbent on us to try to work to see that it’s a success,” he said.

In a sense, Bachus would be true to his word: the bill would make the bureau a success from the financial industry’s perspective, as it would be rendered weaker than other bank regulators and made incapable of doing its work in an effective fashion. Already, the FSOC has the ability to block any of the bureau’s rules (a veto threat under which no other agency has to operate); Bachus’ bill would make it easer for bank-centric regulators to stop the bureau’s common-sense attempts to regulate financial products.

The bill would also “prevent the CFPB from taking on any powers unless a Senate-confirmed director is in place,” which is an obvious ploy to stop the bureau from doing anything at all, since Senate Republicans have said they will filibuster anyone President Obama names to the directorship. All in all, the bill makes it clear that House Republicans want the Bureau to be entirely ineffective, since they’ve realized that repealing it is not in the cards.

Budget-Cutting California Republicans Demand End To Welfare While Collecting Farm Subsidies

California Republicans, cutting education "welfare" while raking in taxpayer subsidies

As states continue to cope with budget shortfalls, the same pattern repeats itself over and over again. Republicans refuse to raise revenues — opposing tax hikes on the ultra-wealthy or ending wasteful tax loopholes for corporations — thus forcing budgets to be closed by targeting the most vulnerable: students, middle class families, the elderly, the unemployed, etc.

California is no different, as GOP legislators in Sacramento refused to budge on tax increases, which forced savings in Gov. Jerry Brown’s (D-CA) new budget to be found solely through draconian cuts. As the San Francisco Chronicle reported, cuts to higher education alone will force a nearly 18 percent bump in tuition for UC students. Yearly budget cuts have more than doubled the price of public college in California since 2005.

But as California Republicans rail against “welfare” and wasteful government spending, an investigation by ThinkProgress has found that many of the state’s leading GOP legislators are themselves millionaire recipients of taxpayer money:

State Sen. Ted Gaines (R-Roseville) and his wife Assemblywoman Beth Gaines (R-Roseville) say they are staunch opponents of government spending. In an opinion piece about the state budget, Ted Gaines complained about the size of the California government and the number of “welfare cases” in the state. The Gaines family owns a profitable insurance company and several farms. Disclosures show that the Gaines family farms have received over $40,000 in federal farm subsidies.

Assemblyman David Valadao (R-Hanford) has called for “shrinking the size of government,” and refused to support any tax increases to stop cuts to education. Two farms owned in part by Valadao have received $808,832 in federal farm subsidies.

– Commenting on the budget, Assemblyman William Berryhill (R-Modesto) said the agreed-upon cuts didn’t go far enough and urged even less spending on “social welfare programs we can’t afford right now.” According to disclosures, Berryhill is a part-owner of a farm that has received over $7,000 in federal subsidies. Moreover, Berryhill owns up to a million dollar stake in WestAmerica Bancorporation, a bank that received (and later paid back) an $83 million bailout from the government.

California Republicans often claim that spending constraints on the state level should serve as a model for fiscal conservatism for the nation. But as our analysis shows, many anti-government, anti-welfare California lawmakers are more than happy to receive taxpayer money when they benefit from it.

Econ 101: July 20, 2011

Welcome to ThinkProgress Economy’s morning link roundup. This is what we’re reading. Have you seen any interesting news? Let us know in the comments section. You can also follow ThinkProgress Economy on Twitter.

  • The House yesterday approved the Republicans’ radical “cut, cap, and balance” plan by a vote of 234-190; the legislation is extremely unlikely to pass the Senate. [New York Times]
  • The House will vote today on legislation aimed at weakening the nascent Consumer Financial Protection Bureau. [Reuters]
  • Minnesota’s legislature began a special session yesterday afternoon “to consider a budget compromise brokered by Democratic Governor Mark Dayton and Republican leaders to end a nearly three-week government shutdown.” [Reuters]
  • Speaker of the House John Boehner (R-OH) said yesterday “that a $3.7 trillion deficit-reduction plan from the Senate’s Gang of Six appears to fall short of goals set by House Republicans.” [The Hill]
  • An overwhelming majority of voters in a new poll “want oversight of financial firms and reforms to take effect as soon as possible, including the creation of a consumer protection bureau. ” [The Hill]
  • Due to the recession, “more people are moonlighting — working a full-time job plus another job — to pay for necessities or to hedge against possible layoffs and pay cuts.” [McClatchy]
  • “Housing starts rose more than expected in June to touch a six-month high and permits for future construction unexpectedly increased,” according to new data from the Commerce Department. [Reuters]
  • “Western states hit hardest by the housing crisis are feeling the greatest economic stress two years after the recession ended,” according to an Associated Press analysis. [Associated Press]
  • 36 states and the District of Columbia “have told the U.S. Department of Education that they want to compete for $500 million in new Race to the Top money that is designed to spur improvements in early-childhood programs.” [Education Week]
  • During a hearing yesterday, business lobbyists pressed the National Labor Relations Board to scrap new rules that would speed up union elections [The Hill]
  • “Banks may launch lawsuits if a euro zone bank levy is imposed on the industry to help fund a rescue of Greece,” claiming that the tax “would unfairly punish banks not exposed to the country.” [CNBC]

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