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T-Mobile To Lay Off Thousands Of Workers After Taking Millions In Taxpayer Subsidies For Job Creation

Last week, telecom giant T-Mobile announced that it plans to close seven of its 24 U.S. call centers. About 3,300 employees work at those centers, and the company is planning to lay off at least 1,900 of them, while offering transfers to some (though it doesn’t yet know how many). Adding insult to injury, four of the centers that T-Mobile is closing received taxpayer subsidies worth millions of dollars, according to Good Jobs First:

– Frisco, TX: $3.7 million

– Brownsville, TX: $5.3 million

– Lenexa, KS: $3.9 million

– Redmond, OR: $1.3 million

These subsidies took several forms, including sales tax exemptions, salary supplements for workers, and job training money. “T-Mobile USA’s decision to close seven call centers, employing 3,300 workers, is a bad one. It harms workers and communities, and in several locations, abuses taxpayers who provided funds to the company in exchange for employment and economic development,” said the Communication Workers of America.

T-Mobile is certainly not the first corporation to receive subsidies and then cut a community loose. Mega-manufacturer Boeing took a heap of taxpayer money and received significant local help in winning a $35 billion contract before bailing on Wichita, Kansas. Sears will lay off 100 workers after receiving millions from Illinois (and can lay off another 1,750, thanks to the terrible terms to which Illinois agreed).

Fortunately, several of the subsidies received by T-Mobile came with clawback provisions, so officials in the states affected at least stand a chance of recouping some of the money they’ve lost. “The officials in those states should investigate the possibility of recapturing as much of those millions of dollars that were paid out as possible,” said Phillip Mattera, Research Director of Good Jobs First. “The taxpayers didn’t get all that they paid for. They lost those millions of dollars in revenues in the expectation that permanent jobs would be created.”

Climate Progress

Flashback: In 2007, Romney Wanted Government ‘To Invest In New Technology’ For Clean Energy And Fuel Efficiency

Woah, hold on! Did I say that?

If the Mitt Romney of today debated himself from a few years ago, he would likely call himself a government-loving socialist.

In 2007, as he prepared his national presidential campaign, Romney explicitly supported 50-mile-per-gallon fuel efficiency standards, electric cars, government programs for new automotive technologies, and renewable energy to reduce the global warming “burden” of greenhouse gases:

We have to make our automobiles far more fuel efficient. I’d love to see we’re gonna get up to 50 miles per gallon. The time will come, people will look back and say, “You’re kidding me, cars back then only got 25 miles to the gallon? You’re kidding!” We can do much, much better than that and I believe that one of the ways we do that is having a joint public-private partnership to invest in new technology related to fuel efficiency as well as new sources of energy.

Today, after a few good shakes of his Etch A Sketch, Romney now calls fuel standards “disadvantageous for domestic manufacturers.” He must have forgotten that 90% of auto manufacturers operating in the U.S. — including Ford, GM, Chrysler, BMW, Honda, Hyundai, Jaguar/Land Rover, Kia, Mazda, Mitsubishi, Nissan, Toyota and Volvo — all support aggressive fuel economy standards that will bring the nation’s auto fleet to 54.5 mpg by 2025.

A Romney speech released last week illustrates how dramatically the candidate’s stances on energy issues have changed in one election cycle. The audio, purportedly captured at a 2007 town hall event and released by BuzzFeed’s Andrew Kaczynski, offers a completely different picture of Romney’s energy policies.

(The opening question is a bit garbled, but Romney’s answer is much more clear.)

Here’s a transcript of his comments:

Read more

NEWS FLASH

AFL-CIO Calls For Romney Adviser To Resign Over Ties To Labor Board Ethics Violations | Last week, the inspector general for the National Labor Relations Board released a report showing that Republican NLRB member Terrence Flynn leaked information regarding to the board’s activities to 2012 GOP presidential hopeful Mitt Romney’s labor adviser, Peter Schaumber. Today, the AFL-CIO called for both Schaumber and Flynn to resign their respective posts. The findings “will be a test for candidate Romney,” said AFL-CIO President Richard Trumka in a statement. “Allowing Schaumber to remain as an advisor will speak volumes about candidate Romney and the value he places on ethics in government officials. He should renounce these violations and dismiss Schaumber.”

Pennsylvania GOP Senate Candidate Favors Privatizing Social Security, Ending Disability Payments

U.S. Senate candidate Sam Rohrer (R-PA)

HARRISBURG, Pennsylvania — Pennsylvania Senate candidate Sam Rohrer (R), an 18-year veteran of the state legislature, has already made a name for himself during this campaign as one of the GOP’s most radical candidates. He thinks federal highways are unconstitutional, doesn’t understand the budget process, and has compared driver’s license requirements to slavery.

Rohrer also thinks the government should no longer provide federal services to the American people, a position he took a step farther Saturday at the Pennsylvania Leadership Conference. During a debate featuring the state’s Republican Senate candidates, Rohrer, the party’s front-runner, outlined a proposal to privatize Social Security and end the Supplemental Security Income (SSI) program, which provides aid to disabled Americans:

ROHRER: The structural aspect of the program that is in place, financially, if we don’t make changes, it will not be there for those who are coming up. So we’ve got to stop the cost increase, meaning we do it this way. We’ve got to take out the younger workers, maybe it’s an age of 50, maybe it’s as you say, 45, determine that age where those up to that point are not compelled to join Social Security. They’re allowed to go into a program like 401(k), have their own plan, and you obviously cut the cost on the outside.

But secondarily, we have to reduce the cost of Social Security now, otherwise we will not find us able to make payouts either. And that, I recommend, we do by bringing it back into line with what Social Security was acceptably set into place to be originally, and that’s as a retirement assistance program. Meaning we have to back off such things as disability — SSI payments — where we have many new people brought into the program. Many illegal aliens are receiving SSI payments. That is a part of the program that Social Security was never intended to fund, and that’s a part that we can logically back off, bring it back to its major core. I think we can preserve and extend the life of Social Security.

Watch it:

Privatizing Social Security, as Rohrer would like to do, would have had disastrous consequences for Americans during the Great Recession. According to a 2008 Center for American Progress analysis found that an October 2008 retiree would have lost $26,000 in a private Social Security account even before the market bottomed out in 2009. Given that two-thirds of senior citizens count on Social Security for more than half their monthly income, those kind of losses would dump millions into poverty.

Ending SSI and disability payments goes even farther. According to the Social Security Administration, more than 8.1 million Americans received SSI in January 2012, and nearly 1.3 million of the recipients were children. SSI’s support is modest — the average monthly payment in January was $517 — but important. A 2005 study by the Center on Budget and Policy Priorities found that SSI lifted 2.4 million Americans above the poverty line in 2003. And despite Rohrer’s claims that “illegal aliens” are benefiting from the program, SSI has far stricter requirements even for legal immigrants than most federal assistance programs.

Rohrer, meanwhile, ignored the easiest solution to Social Security’s long-term health. Lifting the payroll tax cap, which currently taxes all income below $106,800 for Social Security purposes, would ensure the program’s solvency for the next 75 years.

Update

The other GOP candidates — Tom Smith, Steve Welch, and Marc Scaringi — all “said voters under either the age of 40 or 45 should have at least the option of replacing Social Security benefits with private investment accounts. They noted the severe fiscal problems facing the Social Security fund, and several called it insolvent.”

Federal Housing Regulator Absurdly Claims Helping Families Keep Their Homes ‘Would Protect The Big Banks’

Federal Housing Finance Agency director Edward DeMarco has been facing significant pressure from progressives to allow Fannie Mae and Freddie Mac — the mortgage giants that the FHFA regulates — to reduce outstanding mortgage principal for troubled homeowners. This pressure only intensified following last week’s ProPublica story showing that principal reductions would save taxpayers money in the long run, undercutting a key argument DeMarco was using to block action.

So now DeMarco — aided by the New York Times’ Gretchen Morgensen — is back with a new argument: helping homeowners by reducing mortgage principal would actually be providing aid to big banks:

In an interview with the Financial Times, Edward DeMarco, acting Federal Housing Finance Agency director, said policy makers who are pushing his agency to allow Fannie Mae and Freddie Mac to reduce borrowers’ mortgage balances, are deliberately shielding big banks from taking losses on distressed housing debt. [...]

Now, as the Obama administration, Congress and at the Federal Reserve call on Fannie Mae and Freddie Mac to write down the mortgages they own or guarantee, Mr DeMarco argues that such a move amounts to a transfer of US taxpayer wealth to the biggest US lenders, whose “second mortgages” are subordinate to the debt owned or guaranteed by Fannie Mae and Freddie Mac.

“If you do principal forgiveness, who is it benefiting?” Mr DeMarco asked. “Doing principal forgiveness is what would protect the big banks.”

DeMarco and Morgensen both point to people with “second liens” — second mortgages — on their homes as the hurdle to reducing principal. And yes, if principal were reduced on a loan with a second mortgage and the second mortgage were left entirely intact, a big bank could certainly profit.

But as Center for Economic and Policy Research Director Dean Baker noted, most loans held by Fannie and Freddie don’t have a second liens. So for those homeowners, this problem simply doesn’t exist and the rationale DeMarco is using for not helping them vanishes. And bank regulators have it in their power to fix the second lien problem too, if they so chose, rendering the entire argument moot.

As Reuters’ Felix Salmon added, if principal reductions would actually bail out banks, “then the largest banks would surely be pushing loudly for their implementation. But they’re not. Because the principle beneficiaries of principal reductions are not banks, but rather homeowners.” DeMarco is quickly running out of excuses for failing to provide aid to homeowners and it’s a shame that Morgensen aided him in his snow job.

Pennsylvania GOP State Rep. Hasn’t Signed Norquist Tax Pledge Because ‘I Have To Do What’s Right And What’s Fair’

State Rep. John Bear (R-PA)

HARRISBURG, Pennsylvania — Anti-tax activist Grover Norquist roused the crowd Friday afternoon at the Pennsylvania Leadership Conference, a gathering of the state’s conservatives, by saying that Republicans who voted for tax increases “are rat heads in a Coke bottle.”

But one Pennsylvania lawmaker who is a regular speaker at the PLC isn’t a fan of Norquist’s hard-line anti-tax ideology. State Rep. John Bear (R), who spoke shortly after Norquist, has not signed Norquist’s “Taxpayer Protection Pledge,” which requires lawmakers to never vote for tax increases of any kind, for any reason. “I never sign tax pledges,” Bear told ThinkProgress:

WALDRON: I noticed, when Grover Norquist was speaking, they circulated a list of state legislators and senators that had signed his pledge and I didn’t see your name on it.

BEAR: I never sign tax pledges. I just don’t. … I don’t believe in signing tax pledges and giving that authority to any outside group. The constituents of my district elected me. Do I want to tax increases? No. But I have to do what’s right and what’s fair at the time given the circumstances. I just feel like these all-or-nothing tax pledges, it just doesn’t, I just don’t believe in that, so I haven’t signed it.

Listen:

Norquist’s death grip on the Republican Party has seemingly weakened of late. Rep. Jeff Fortenberry (R-NE) signed the pledge when he first ran for Congress but said he doesn’t “care to be associated with it” anymore. Former presidential candidate Jon Huntsman refused to sign it during his campaign, and Rep. Tim Johnson (R-IL) blasted it as “disingenuous and irresponsible” earlier this month. Rep. Rick Crawford (R-AR), meanwhile, disavowed the pledge by becoming the first House Republican to propose legislation that would levy a surtax on millionaires.

Ryan’s Spending Cuts Leave His Hometown Wondering ‘If He Remembers Where He Came From’

The House Republican budget, authored by Budget Committee Chairman Paul Ryan (R-WI), gets 62 percent of its budget cuts from programs that benefit low-income Americans and would boot millions off of food stamps. In addition, Medicare, Medicaid, Pell Grants, and job training programs would face cuts, all while millionaires receive a tax break.

Those spending cuts would further crimp federally-funded programs in cities and towns across the country that are already struggling due to the GOP’s austerity ideology. And Ryan’s own hometown, Janesville, Wisconsin, hasn’t been spared, leading some local residents to wonder “if he remembers where he came from,” Reuters reports:

The U.S. Department of Housing and Urban Development had clawed back $344,000 from the city’s affordable-housing fund, so the Janesville Community Development Authority voted to drain its reserves to keep its 525 families in the program.

The city won’t have to put anybody out on the street, probably. But there is no cushion left.

There’s less money for job training, health clinics and the food bank; higher property taxes and higher car fees; larger school class sizes, crumbling roads, fewer firefighters.

The GOP’s spending cuts are jeopardizing projects to widen Interstate 90, which cuts through the district, and improve runways at the local airport, both of which rely on federal money. One in five students at a local technical college, where many laid-off workers have entered a re-training program, rely on federal loans. His Medicaid cuts would “strain local hospitals,” and federal job training funds are scheduled to drop 6 percent to 12 percent this year. Janesville’s federally-funded rental assistance program, meanwhile, has already quit accepting new applicants.

Ryan, however, doesn’t seem to have much sympathy for his struggling constituents. Last April, he was jeered by constituents for giving tax breaks to the wealthy while cutting spending, and in October, he told a local college student who depended on Pell Grants that he should work three jobs instead of depending on the federal program.

Trump Trashes Paul Ryan’s Budget: ‘Suicidal,’ ‘Big Mistake,’ ‘Dangerous Plan For Mitt Romney’

This morning on Fox & Friends, billionaire real estate mogul Donald Trump criticized Rep. Paul Ryan (R-WI) to putting out a Republican budget plan that hits low-income Americans the hardest, rewards millionaires, and ends Medicare as we know it.

But Trump wasn’t upset with the details of the plan, as much as the timing of the release of it. It’s “very bad politically,” Trump argued, adding, “Democrats will have an absolute field day.” He emphasized, “Republicans, if they pursue this, are making a big mistake.”

Instead, Republicans “should wait till after the election,” Trump said, and that “for them to do it now is suicidal.” He argued that the GOP budget plan will be very unpopular with the American people, so they should just hide the details for now:

STEVE DOOCY: Don’t you think it makes it a clearer case where the voter will have a choice between the President who doesn’t want to mess with entitlements, wants things to go just as they are, even some have suggested we’re going to go over a financial cliff. Or the Republicans, who have a plan.

TRUMP: You’re right, Republicans have a plan, but it’s not a choice that the Republicans are going to win. People are going to take the choice that’s best for them even if it’s not best for the country. […]

I think it’s a very dangerous plan for Mitt Romney. … He’s going to be saddled with a plan that’s very tough to live with.

Watch it:

When Ryan released his budget last year, Trump also lambasted it, calling it “a death wish” for Republicans. Making the same complaint then as he is now, Trump said, “his timing is corrector” and that some Republicans were “going to lose their elections” because of it.

Econ 101: March 26, 2012

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.

  • Germany will finally agree this week to allow an increase in the Eurozone financial rescue fund. [Financial Times]
  • How the bank lobby has successfully shifted debate over the Volcker rule, which is meant to rein in risky trading. [Bloomberg]
  • Cheap labor in China no longer looks limitless to foreign businesses. [Reuters]
  • Industries fear the impact of cuts to the Postal Service. [New York Times]
  • The House Republican budget is scheduled to come to the floor this week. [The Hill]
  • Senate Democrats plan to vote on the Buffett rule — a minimum tax for millionaires — in mid-April. [The Hill]
  • Education Secretary Arne Duncan believes newspapers shouldn’t publish teacher ratings. [Education Week]
  • Mega-bank Wells Fargo is refusing to turn over documentation to investigators looking into its sale of mortgage backed securities. [Associated Press]

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