A House Republican plan to slash funding for a Social Security program would cost taxpayers far more than it would save, according to a letter from Social Security’s chief actuary. The Republican plan, which is focused on a program meant to ensure that beneficiaries are not overpaid, would cut more than $800 million below the level agreed to in the Budget Control Act, the spending agreement passed during last year’s debt limit negotiations.
In a Thursday letter responding to inquiring House Democrats, Social Security’s chief actuary Stephen C. Goss concludes that cuts will cost taxpayers “between $5 billion and $6 billion more over the lifetime of those who would not be reassessed due to the reduced funding.”
The cut would hamper the highly-effective program that roots out waste, fraud, and abuse in Social Security — according to Goss, such reviews produce between $6 and $9 in regained savings per dollar spent. While the analysis only covered the impact on the program this year, future cuts would likely have a similar impact on the program.
House leadership isn’t likely to give the Labor, Health, and Education appropriations package that contains the cuts a vote before the full House, but the plan keeps up the GOP’s disturbing trend of targeting social safety net programs that largely benefit the lower- and middle-classes.
Overtime Wage Theft Complaints Hit Record High |
The number of workers filing wage theft complaints against their employers for not paying overtime wages hit a record high in 2011, according to a report from law firm Seyfarth Shaw. In 1993, there were 1,457 cases involving overtime pay brought under the Fair Labor and Standards Act, but that number spiked to a record 7,006 in 2011. And 7,064 cases have already been filed this year, the Huffington Post reports, putting 2012 well ahead of record pace. These results are consistent with findings of other studies. In May, CNN Money found that the number of collective action cases brought under the Fair Labor and Standards Act jumped more than 400 percent in 2011.
The top two corporations on the Fortune 500 Global ranking, Royal Dutch Shell and ExxonMobil, announced their 2012 second-quarter earnings today, bringing the total profits for three Big Oil companies to $44 billion for 2012 or $250 million every day this year. Exxon profited by $16 billion this quarter, bringing its earnings for 2012 to $25 billion.
The New York Times wrote that Exxon and Shell’s earnings “disappoint,” because energy prices unexpectedly dropped for consumers this summer. Put their profits in the appropriate context, however, and Exxon and Shell still made a combined $160,000 per minute last quarter, even though the top five oil companies benefit from $2.4 billion federal tax breaks every year.
Below we look at what Exxon and Shell spends its earnings on:
– Exxon spent 42 percent — or $10.7 billion — of its 2012 profits buying back its stock, which enriches executives and largest shareholders.
– Exxon has spent $17 million lobbying for the past 18 months, making it the top spender in the oil and gas industry. It has spent more than $52 million lobbying for the first three years of the Obama presidency, 50 percent more than in the Bush administration.
– Shell will start drilling in the Arctic this summer, but its oil spill response plan is still behind schedule. It’s off to an inauspicious start in the Arctic, recently losing control of an Arctic drilling rig.
While these companies already benefit from billions in tax breaks, Mitt Romney has offered the industry even more. A Center for American Progress Action analysis finds that Romney’s tax plan could lower five companies’ annual tax bill by another $2.3 billion, virtually doubling what they already receive in tax breaks.
Chevron and BP are the last two of the Big Oil companies to announce profits.
House Democrats have introduced a bill in the House — bound to go nowhere due to the Republican majority — that would increase the minimum wage to $10. This would give the wage the purchasing power that it had in the 1960s.
Republicans have publicly met the idea of raising the minimum wage with contempt, with Rep. Bill Young (R-FL) even nonsensically telling one constituent who asked about the Democrats’ bill to “get a job.” Meanwhile, thousands of working Americans this week rallied in favor a higher minimum wage.
Conservative opposition to a higher minimum wage hinges on a few tired arguments that ultimately protect big businesses and hurt low-income workers. Here are the favorite conservative myths when it comes to the minimum wage and why there’s really nothing to them:
1) The minimum wage kills jobs. “It’s a classic election-year ploy to make the Democrats look like they’re protecting low-income workers. I think it’s well understood that raising the minimum wage hurts workers on the lower end of the pay scale in that it does kill jobs,” said a recent statement from the U.S. Chamber of Commerce. However, several academic studies have shown that raising the minimum wage does not have a negative effect on employment. In fact, an analysis of state minimum wage increases showed that those state boosting their wage “had job growth slightly above the national average.”
2) Increasing the minimum wage hurts small businesses. Gov. Chris Christie (R-NJ) reacted to a proposal to raise the minimum wage by saying that small business owners are “going to have to lay people off.” However, two-thirds of low-wage workers actually work for big corporations, most of which have largely recovered from the recession and could therefore afford to increase wages. The three largest employers of low-wage workers have all seen large profit increases in the last few years.
3) Increasing the minimum wage only benefits teenagers.Many Republicans argue that raising the minimum wage just hurts teenagers’ ability to gain work experience. But as a new report from the Economic Policy Institute shows, nearly 90 percent of minimum wage workers are 20 years old or older. Plus, “more than a third (35.8 percent) [of minimum wage workers] are married, and over a quarter (28.0 percent) are parents.”
During a debate yesterday between top national security advisers to the Obama and Romney campaigns, top Romney aide Amb. Richard Williamson got peppered with questions about where Mitt Romney would get the money to boost defense spending. Though taking the question no less than four times during the debate, Williamson balked at answering directly, haltingly offering up platitudes, deflecting and dodging.
Debate moderator Marvin Kalb asked Williamson twice successively how Romney would pay for military spending, and followed up again after a Congressional Quarterly reporter asked during the question and answer period. Williamson’s first answer to Kalb was typical of his repeated dodges:
KALB: I don’t know anybody who thinks you can increase defense spending, cut taxes, and do anything about the national debt. So how do you do that, sir?
Obviously there’s a philosophical debate between President Obama and Governor Reagan on the economy — excuse me, Governor Romney and President Obama on the economy. It’s one that the American people are intensely interested in. Governor Romney wants to keep discussing that issue and allow the American people to make a decision. Whether you create growth by more revenue, or — I don’t want to — spending on the stimulus and other things that he would argue are a waste of money, versus trying to support and unleash the private sector for growth.
Kalb then asked how, until the economy supposedly comes around, Romney would get the money in the next few years. Williamson offered to send a campaign economic adviser to discuss the matter, then went back to “philosophical differences.” Later, when CQ asked where the money would come from, Williamson called for “incentives in the private sector,” deregulation, and cutting Obamacare. When Kalb followed up yet again, Williamson cited current economic statistics, blaming the stimulus and Obamacare.
If Romney wants to make good on his vow to increase defense spending by $2.1 trillion, and he also wants to make good on his support for the tax cuts incorporated in the House Republicans’ budget, he would need to cut the rest of the government’s functions — including Social Security and Medicare benefits — by about 14 percent, according to the Center for American Progress.
Short of cutting those popular programs, Milbank wrote, Romney would “need to shut down all functions of the departments of Commerce, Education, Energy, Interior, Justice, Labor and Treasury as well as the National Institutes of Health.”
Mitt Romney embarked on a trip to Europe this week that begins with a stop in the United Kingdom, where Romney will both attend the London Olympics and meet with top British officials, including Prime Minister David Cameron. But being in Europe hasn’t stopped Romney from taking potshots at the continent.
During an interview with NBC’s Brian Williams, Romney warned that America’s current path will make it end up like Europe, which is stuck in economic doldrums (according to a transcript provided by NBC):
BRIAN WILLIAMS: And when Mitt Romney arrives in Washington, how will Washington be any different from the Washington we’ve seen these past few years, which any American will tell you is hopelessly broken, busted?
MITT ROMNEY: You know, all I can say is that I got elected governor of a state that was 87% Democrat. And it was not lost on me that if I went around attacking the Democrat leadership, I was gonna get nothing done and none of my vetoes would be upheld. And I began a relationship with the speaker of the House and the Senate president that was personal. We respected each other. We often disagreed. But we found common ground from time to time. That has to happen. There has to be a president that buries the hatchet and says, “We’re gonna go to work to try and get America on track.” We– we’re at a critical time in this country. If we keep going down the path we’re on, we’re gonna end up like Europe or worse.
This is a common critique that Romney makes, claiming that President Obama is “taking us down a path towards Europe.” However, he conveniently ignores that his policies closely align with the austerity that’s been adopted across Europe, which has unnecessarily blunted economic growth. In fact, the European governments that have embraced austerity the hardest have seen their economies contract the most.
As this chart shows, the U.S. is doing better in terms of economic growth than both the Eurozone and the United Kingdom, where Prime Minister David Cameron has embraced austerity:
The UK has not only contracted for three straight quarters, but the UK economy is now smaller than it was before Cameron’s conservative government came into power. This follows Cameron’s $130 billion of budget cuts, and warnings from Britain’s Chancellor of the Exchequer that further austerity may come after the current package expires. And Romney’s penchant for the spending cuts included in, for instance, the House Republican budget, would likely lead to a similar outcome.
According to data compiled by Bloomberg News back in March, the largest gender gap in terms of pay occurs on Wall Street, where women earn 55 to 62 cents for every dollar that men earn. But that’s not the only way in which Wall Street leaves women behind.
According to research highlighted by the New York Times, women make up more than half of the financial industry’s workforce, but are executives at barely any firms:
The figures tell an alarming story. Women make up more than half of the work force in the financial industry but are chief executives at fewer than 3 percent of U.S. financial companies, according to Catalyst, a New York-based global research and consulting nonprofit focused on women’s career advancement.
Why is Wall Street so slow to promote women? Is that a reflection of U.S. society in general or is there a peculiarity to the Wall Street experience?
Of course, even reaching the upper echelon of corporate America doesn’t guarantee women equal pay, as a female CEO makes 69 cents for every dollar that a male CEO makes. But perhaps Wall Street is shooting itself in the foot by failing to promote women to positions of power, as “several studies have shown that women are more profitable investors, money managers and hedge fund managers, and they incur less risk in the process.”
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 United States may be the lone bright spot for auto sales this year. [CNBC]
The U.S. Department of Agriculture is projecting that food prices will grow faster than other prices in 2012, increasing by 3.5 percent. [Reuters]
European lawmakers are considering making rate-rigging a criminal offense in the wake of the LIBOR scandal. [Washington Post]
“International debt inspectors” began a new round of talks with the Greek government yesterday. [Associated Press]
New home sales fell in June by their largest amount since February 2011, but are still up for the year overall. [The Hill]
The House yesterday approved a bill allowing for a full audit of the Federal Reserve by a vote of 327-98. [The Hill]
Total foreclosure activity rose in the first half of this year, as banks worked through a backlog of delinquent mortgages. [CNBC]