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NEWS FLASH

New Korea, Colombia, And Panama Trade Agreements Advance In Senate And House | This evening, the House of Representatives voted to advance trade agreements with Panama, South Korea, and Colombia. The vote for the Colombian trade agreement was most contentious, with all but 31 House Democrats voting against the agreement and only 9 Republicans voting “no.” As of this writing, the Senate has also voted to approve both the Panama and Colombian trade agreements, with 66 senators voting in favor of the Columbian agreement and 77 senators voting in favor of the Panama agreement.

Bachmann Tells New Hampshire Speaker She’ll ‘Twist Anybody’s Arm’ To Pass Anti-Worker Legislation

Earlier this year, New Hampshire Gov. John Lynch (D) vetoed a bill that would have made the Granite State a “right-to-work” state, eroding the ability of workers to collectively bargain. The bill would have made New Hampshire the only state in the Northeast with such a law.

The speaker of the New Hampshire state house has been trying to override the veto, but has so far been unsuccessful. Today, GOP 2012 presidential hopeful Michele Bachmann told the speaker, William O’Brien, that “I’ll twist anybody’s arm you want me to” in order to drum up enough votes to make right-to-work a New Hampshire reality. Watch it (via Granite State Progress):

During a speech before the New Hampshire legislature, Bachmann claimed that right-to-work laws boost both employment and economic growth, causing the divided legislature to erupt in both cheers and very audible boos:

BACHMANN: Just a few more votes and we’ll be there New Hampshire. Because you see it’s a proven fact that right-to-work states have created more jobs than those that are not. Facts are stubborn things. Facts are stubborn things and right-to-work states have experienced more economic growth than states that are not right-to-work states.

Watch it:

Facts are indeed stubborn things, and Bachmann has had plenty of experience in playing fast and loose with them. Contrary to her assertions, economist Gordon Lafer has found that right-to-work laws “have no impact in boosting economic growth.” “Research shows that there is no relationship between right-to-work laws and state unemployment rates, state per capita income, or state job growth,” he found.

All they do is undermine the ability of workers to collectively bargain for better wages, benefits, and worker protections. In fact, “right-to-work laws lower wages — for both union and nonunion workers alike — by an average of $1,500 per year.”

Pressed About His Plan To Raise Taxes On Food, Herman Cain Says Poor People Should Just Buy Used Goods

The clear winner of last night’s Republican presidential debate on the economy was Herman Cain’s 999 plan, which received more attention and coverage than any candidate or economic proposal submitted by the GOP field.

In response to sharp questioning from the moderators and his fellow contenders about the effects of his plan, which would raise taxes on common food items to pay for a massive corporate tax cut, Cain seemed to have settled on a simple solution: the poor should just eat used food and buy used goods.

Asked to “explain why under your plan all Americans should be paying more for milk, for a loaf of bread, and beer?” Cain noted that under his plan “there is no tax on used goods.” Cain repeated this “used goods” suggestion in two interviews after the debate, insisting that his plan is not regressive. Instead, he explained, the new tax structure would give families the “flexibility to decide on how much they want to spend it on new goods [and] how much they want to spend it on used goods.”

Watch it:

In a Bloomberg interview, Cain claimed that under 999, “prices don’t go up” because “consumers have the option to stretch their dollar because of buying used goods instead of new.” Cain failed to explain how this solution would apply to food, which families might have difficulty buying “used” unless they rummage through garbage. Clearly he considers relying almost entirely on secondhand items for everyday life a perfectly reasonable idea for poor families.

As a former CEO of a pizza company, Cain should know that a hike in taxes on food products will be a heavy blow for the millions of families who are already having a hard time making ends meet. Thirty-one states charge no sales tax on food, and others tax food at a lower rate than other goods or provide rebates for lower-income families to offset the tax. Only two states, Mississippi and Alabama, charge full sales tax on food.

As ThinkProgress has explained, 999 would slash taxes on the wealthy, drive up deficits to their highest levels since World War II, and force low-income Americans to pay nine times their current tax rate.

Blue Dogs Throw Support To Giant Corporate Tax Giveaway, Claiming It Will Reduce The Deficit

Members of the House Blue Dog coalition sent a letter to the fiscal super committee this week expressing their support for a corporate tax holiday being vigorously sought by a slew of multinational corporations. The Blue Dogs evidently believe that the tax repatriation holiday — which would allow companies to bring money they have stashed overseas back to the U.S. at a tax rate far below what they would normally pay — would help reduce the deficit:

“As you consider tax reform, we urge you to include a temporary change to the tax code that allows businesses to repatriate money trapped overseas as part of reform or as a bridge to comprehensive reform,” stated a letter obtained by The Hill that was sent Wednesday to the congressional deficit-reduction committee…”We believe that bringing private-sector capital back to the U.S. will strengthen recovery efforts and help reduce the federal deficit,” they said.

Unfortunately for the Blue Dogs, the Joint Committee on Taxation found that a corporate tax repatriation holiday would cost nearly $80 billion, not result in deficit reduction. Unless they are counting on a sudden appearance of the tax fairy, the Blue Dogs are barking up the wrong tree.

The corporations supporting the holiday have a different rationale for pushing the tax break, claiming that nearly tax-free dollars will let them invest domestically and create jobs. But the last time that Congress approved a repatriation holiday, corporations used the money to enrich their executives, cutting hundreds of thousands of jobs.

Versions of a repatriation holiday are now floating around both the House and the Senate, but the fact remains: giving corporations that are sitting on record amounts of cash yet another tax break will do next to nothing to spur the struggling economy. Of course, that hasn’t stopped several Republican presidential hopefuls from supporting the idea. Tea Party Sen. Mike Lee (R-UT) this week proposed lowering the tax on repatriated money permanently.

NEWS FLASH

CHART: Wall Street Salaries Rise 11 Percent Annually, While Other Workers’ Increase By Just 1.8 Percent | Mother Jones’ Kevin Drum re-engineered a chart from the New York State Comptroller’s office showing how, in the last three decades, salaries in New York City’s securities industry have far outstripped those in the city’s other sectors. “Wall Street salaries have risen 11.2% per year, while all other salaries have risen 1.8% per year,” Drum found. In 2010, the average salary for someone in the securities industry was $366,000 while the average private sector salary in another industry was $66,000.

Cain Economist: ’999′ Plan ‘Wouldn’t Be The One I Picked’

As former pizza magnate Herman Cain has surged in Republican primary polls, his “999″ tax plan has received more and more attention — it was mentioned 85 times at last night’s GOP debate — and with the attention has come increasing scrutiny. Center for American Progress Director of Tax and Budget Policy Michael Linden studied the plan last week and revealed that it would explode federal deficits, slice federal revenue, and force the poorest Americans to shoulder the cost of a tax cut for the wealthy.

Others have analyzed Cain’s plan and found similar results, and even conservatives have begun calling major parts of it into question. But today, the “999″ plan was dealt its biggest blow when one of Cain’s own economic advisers said it wasn’t a tax plan he would back. While Gary Robbins, who scored the plan for Cain’s campaign and is a paid consultant, praised the plan, he made it clear that it wouldn’t be the plan he picked, Politico reports:

While Robbins praised the idea of 9-9-9, he took steps during an interview to distance himself from its author.

“It’s not a plan that I concocted,” Robbins said. “There’s nothing wrong with the plan, it just wouldn’t be the one I picked.”

Cain has dismissed criticism of his plan as “egregious” and misinformed, but it is telling that a member of his own campaign wouldn’t necessarily back the plan, which was drafted by a Koch-affiliated financial adviser at Wells Fargo, not an actual economist. And though Cain dismissed fellow presidential candidate Rick Santorum’s criticism that the 999 plan would never pass, Robbins agrees with that assessment, telling Politico that the American people would never accept such drastic changes.

Unfortunately, in addition to Robbins’ caveats, there are major problems with Cain’s plan. As Linden noted, it would cut revenue in half and create the largest federal deficits since World War II. It would also raise taxes on the poor to nine times their current rate, and since its 9 percent sales tax also hits food — something only two states currently do at a full sales tax rate — it would hit the poor even harder than already expected.

NEWS FLASH

POLL: Nearly Two-Thirds Of Americans Support Obama’s Jobs Bill | Sixty-three percent of Americans support President Obama’s jobs bill, according to a new NBC News/Wall Street Journal poll. The bill is paid for with a surtax on millionaires and 64 percent of respondents agree that it’s a “good idea” to raise taxes on the wealthy and corporations to fund government programs. Only 30 percent opposed the tax. But Senate Republicans used the filibuster to block the bill last night.

Unemployed Americans Protest On Capitol Hill, Calling On GOP Senators To Stop Blocking The Jobs Act

ThinkProgress filed this report from the Hart Senate Office Building in Washington, DC

Republicans have continually slammed President Obama’s jobs plan, the American Jobs Act, as a second stimulus plan that won’t work — ignoring the success of the first stimulus and sticking to their own “job creating” policies that have, in the past, failed to boost job creation and economic growth. And last night, Republicans and two Democrats successfully blocked the Jobs Act from coming to the floor for debate, despite it winning majority approval from the full Senate.

Senate Majority Leader Mitch McConnell (R-KY) has led the charge against the Jobs Act and did so again yesterday, saying on the Senate floor that Republicans welcomed the chance to vote against it. But while McConnell was leading his party’s obfuscation, a coalition of grassroots organizations brought unemployed Washington residents to the Hart Senate Office Building to urge lawmakers to pass the Jobs Act.

The Rev. Paul Sherry held a prayer vigil among the groups in Hart’s atrium, where he and others spoke out about the need for the Jobs Act. “It is time, long past time, to rebuild our nation’s economy in the interest of justice, and compassion, and fairness for all our nation’s people, rather than a favored few,” Sherry said. “The American Jobs Act does all those things.”

The prayer vigil was followed by testimonials from multiple unemployed District residents. “I feel useless, I don’t have anything to do,” a tearful Linda Evans told the crowd of about 50. Evans, an unemployed home health assistant, has been out of that field for three years and recently lost her job working with children. “We are the people,” she said. “And we need jobs.”

Andre Henson, an unemployed 23-year-old who said he has applied for dozens of jobs over the last year, said he was tired of hearing lawmakers talk about how hard it is for the unemployed. “They talk about it, and I live it,” he said. “I live it every single day. Lying in bed asleep at night, wondering how I’m going to provide for my daughter. We helped the congressmen and senators get in office, and it’s time for them to help us.”

Watch video of McConnell’s criticism of the bill and from the gathering yesterday:

From there, the participants broke into smaller groups and went upstairs, visiting offices of senators who had pledged to oppose the bill. In office after office, staffers told the unemployed that they would relay their stories on to the senators, and a staffer in Sen. Mark Kirk’s (R-IL) office reminded them, rather flippantly, “It’s definitely tough times.”

But hours later, the Republican caucus stood uniformly against the Jobs Act, blocking it from coming to the floor for a vote it likely would have passed.

If Romney Is ‘Not Worried About Rich People,’ Why Does He Want To Cut Their Taxes?

2012 Republican presidential hopeful Mitt Romney yesterday attempted to flip-flop on his feelings towards the protesters continuing to occupy Wall Street. After initially deriding the protesters as “dangerous,” Romney told a town hall audience in New Hampshire that “I don’t worry about the top one percent. I don’t stay up nights worrying about ‘gee we need to help them.’ I don’t worry about that. They’re doing just fine by themselves.” “I worry about the 99 percent in America,” he added. “So I look at what’s happening on Wall Street and my own view is, boy I understand how those people feel.”

Carrying that theme over to last night’s GOP primary debate, Romney responded to a question on taxes by saying that he’s “not worried about rich people,” and that “if I’m going to use precious dollars to reduce taxes, I want to focus on where the people are hurting the most, and that’s the middle class”:

If I’m going to use precious dollars to reduce taxes, I want to focus on where the people are hurting the most, and that’s the middle class. I’m not worried about rich people. They are doing just fine. The very poor have a safety net, they’re taken care of. But the people in the middle, the hard-working Americans, are the people who need a break, and that is why I focused my tax cut right there.

Watch it:

Of course, if this is truly Romney’s belief, he has a funny way of showing it, as his economic plan includes $6.6 trillion in tax cuts that overwhelmingly benefit the very rich (as well as corporate America). For instance, his plan to eliminate the estate tax only helps the wealthiest Americans who have estates worth more than $5 million. He would also extend all of the Bush tax cuts, even though “in 2010, fully half of the entire benefit from all of the Bush tax cuts flowed to the richest 5 percent of Americans.”

At the same time, Romney has proposed raising taxes on the poorest Americans, and during last night’s debate said that he would oppose extending the current payroll tax cut — which is helping all working Americans, particularly those in the middle-class — because “I don’t like temporary little Band-Aids.” So while he’s paying sufficient lip service to focusing on the middle-class, the actual policies Romney is advocating still adhere to the GOP’s traditional trickle-down model.

Special Topic

The 53% Myth: Working Poor Pay More Of Their Income In State And Local Taxes Than The Rich In 49 States

Erickson wants Americans to protest against the poor, not the rich.

In response to the growing 99 Percent movement that has tapped into the energy of Occupy Wall Street to unleash nationwide protests against economic inequality, a smattering of right-wing bloggers led by Erick Erickson and Josh Trevino along with conservative filmmaker Mike Wilson have created a new tumblr about the “53 percent.”

The tumblr features various people explaining their economic circumstances and often boasting of being self-made and not needing help from anyone. The flippant disclaimer for the tumblr explains that the 53 percent number was chosen because the site’s originators believe that this is the percentage of Americans that pay taxes:

So, like, when you’re, like, community organizing for solidarity and stuff, it’s totally cool to have this little hashtaggy thingy when you’re on twitter, so other people, like, totally know what you’re talking about and stuff. So if you’re, like, totally gonna spread the word about being one of the 53% of people who actually, like, pay taxes in America and don’t just, like, hang out protesting stuff all day… like, here’s the hashtaggy thingy. See you at the protest! #iamthe53

But the founding principles of the tumblr and the “53 percent” meme itself is flawed. It is true that 47 percent of Americans did not pay net federal income taxes in 2009 — the number is unusually high because of the depression in incomes following the recession — but it is completely false that only 53 percent of Americans pay taxes.

For example, if you look at state and local taxes, the working poor actually pay a higher percentage of their income in these taxes in every state except for Vermont. In “Alabama, for example, low-income families (which make less than $13,000) pay 11 percent of their income in state and local taxes, while those making more than $229,000 pay just 4 percent.”

And it is worth noting that Americans who are too poor to be asked to pay net federal income taxes are not a good target for those complaining that some aren’t paying their fair share. If there’s one group of Americans that is paying less and less as the median American family is asked to pay more, it’s the super-wealthy. As this chart from Wealth for the Common Good shows, the top 400 taxpayers — who have more wealth than half of all Americans combined — are paying lower taxes than they have in a generation, as their tax responsibilities have slowly collapsed since the New Deal era as working families have been asked to pay more and more:

Rather than taking aim at some of the poorest members of our society — 62 percent of whom have incomes under $20,000 — Americans should be asking how we can get the super-wealthy to pay tax rates closer to their modern historical average and how we can lift up the incomes of those who are too impoverished to be asked to pay federal income taxes.

GOP Candidates Blame 30 Years Of Rising Income Inequality On Barack Obama And Single Moms

One of the most prominent grievances of those protesters in the 99 percent movement is America’s growing income inequality. The level of income inequality in the U.S. is currently the worst it has been since the Great Depression; over the last three decades, “the incomes of the bottom 90 percent of households have risen only slightly, on average, while the incomes of the top 1 percent have soared.” Since 1979, “the gaps in after-tax income between the richest 1 percent of Americans and the middle and poorest fifths of the country more than tripled.”

During last night’s GOP presidential primary debate, the candidates were asked by the Washington Post’s Karen Tumulty for their thoughts on this troubling trend. Instead of pointing to the true culprits — growing financialization of the economy, excessive executive compensation, dropping rates of unionization, tax cuts for the wealthy, and stagnant wages — Gov. Rick Perry (TX) and former Sen. Rick Santorum (PA) blamed, respectively, President Obama and single mothers:

TUMULTY: Governor Perry, over the last 30 years, the income of the wealthiest 1 percent of Americans has grown by more than 300 percent, and yet we have more people living in poverty in this country than at any time in the last 50 years. Is this acceptable? And what would you do to close that gap?

PERRY: The reason we have that many people living in poverty is because we have got a president of the United States who is a job- killer. That’s what’s wrong with this country today. You have a president who does not understand how to create wealth. He has over-taxed, over-regulated the small-business men and women to the point where they are laying off people. Two-and-half million Americans are out there who have lost their jobs. We have got 14 million without work. This president, I will suggest to you, is the biggest deterrent to getting this country back on track, and we have to do everything we can to replace Barack Obama in 2012.

ROSE: OK. But we are almost out of time. I want to give you a chance, and then we have to go the final questions.

SANTORUM: There is more to it than that. And I agree with Rick, what he said, but the biggest problem with poverty in America, and we don’t talk about here, because it’s an economic discussion — and that is the break down of the American family. You want to look at the poverty rate among families that have two — that have a husband and wife working in them? It’s 5 percent today. A family that’s headed by one person? It’s 30 percent today…We need to have a policy that supports families, that encourages marriage that has fathers take responsibility for their children. You can’t have limited government — you can’t have a wealthy society if the family breaks down, that basic unit of society.

Watch it:

Perry never did get around to explaining how a teenage Barack Obama was responsible for starting a growth in income inequality in the 1970s. A study released last week shows that severe income inequality actually hinders economic growth, while “making an economy’s income distribution 10 percent more equitable prolongs its typical growth spell by 50 percent.”

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Econ 101: October 12, 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.

  • By a 63-35 vote yesterday, the Senate approved a bill that would “impose tough tariffs on certain Chinese goods in the event of a finding by the Treasury that China was improperly valuing its currency.” [New York Times]
  • A new analysis by HSBC finds that by 2025, China will “overtake the United States as the world’s top exporting nation.” [McClatchy]
  • Slovakia’s government collapsed yesterday “after a divided parliament voted against endorsing changes to the European Financial Stability Facility” that would give the fund more power to bail out banks. [Wall Street Journal]
  • The G20 will meet this week hoping “to find an urgent solution to [Europe's] debt crisis.” [Reuters]
  • Economist Mark Zandi said that there’s “a 40 percent chance of a double-dip recession even if Democrats and Republicans come together to pass a jobs bill.” [The Hill]
  • Regulators yesterday released a draft version of the Volcker Rule, which would “restrict how big financial firms can trade securities and invest in hedge funds for their own benefit.” [Wall Street Journal]
  • President Obama’s jobs plan failed to escape a filibuster yesterday “as a unified Republican caucus and a pair of Democrats joined to deny the proposal the 60 votes needed to allow it to proceed to full consideration.” [Washington Post]
  • The fiscal super-committee working on a budget deal has “been slowed down by an intense debate over the basic question of how to count the savings from any potential deficit-reduction deal.” [The Hill]
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