Our guest blogger is David Sanchez, a Special Assistant with the Center for American Progress Action Fund’s Economic and Housing Policy Teams.

New Jersey is facing a twin crisis of foreclosures and lack of affordable housing, but Gov. Chris Christie (R) recently vetoed two bills that would have brightened the outlook for New Jersey residents struggling to afford homes.

The first bill would have empowered New Jersey’s Housing Mortgage and Finance Agency to purchase foreclosed homes and transform them into affordable housing. In doing so, New Jersey would combat the crime and blight brought about by vacant homes, while also increasing housing opportunities for low- and moderate-income families.

The bill had support not only from housing advocates, but from a broad swatch of businesses. What’s more, it would have been implemented without requiring state appropriations.

The second bill would have improved New Jersey’s program to help unemployed or underemployed homeowners make their mortgage payments. This program, funded by a $300 million grant from the federal government’s Hardest Hit Fund program, has badly underperformed for years: according to the most recent statistics, the program has denied assistance to more than double the number of applicants it has helped, and it has spent less than one twentieth of the funds available (although changes have recently been announced that may improve the program). The bill would have mandated that the program respond to applicants and issue aid more quickly.

Christie’s decision to veto these bills is puzzling, to say the least, given the challenges facing New Jersey’s housing market and families. While the housing market is improving in most of the country, it’s getting worse in New Jersey. New Jersey’s percentage of homeowners who are not current on their mortgages increased the most of any state in 2012, and delinquencies remain especially elevated in areas affected by Hurricane Sandy.

Read more

The Senate today — on a vote of 64-34 — successfully passed a bill to raise the nation’s debt ceiling for three months. The bill has already passed the House, so it now goes to President Obama for his signature. Four Republican amendments were rejected prior to final approval.

With the debt ceiling out of the way for the moment, the next big budget task for Congress is funding the federal government beyond March 27th, when the current round of funding expires, and dealing with the $1.2 trillion in spending cuts that will occur in early March due to the so-called “sequester.”

There’s no shortage of corporate tax giveaways at both the federal and state levels. Lawmakers of all stripes love to use the tax code to subsidize companies, either directly or indirectly.

But in some instances, federal tax breaks for corporations undermine state budgets. As the Center for Budget and Policy Priorities detailed today, one particular tax break will cost states $600 million next year:

The federal government created this tax break, known as the “domestic production deduction,” in 2004. Since most states base their own tax codes on the federal tax code, the tax break was carried over into many states without specific legislative scrutiny or a vote. Now it is costing not only the federal government but also 25 states a large amount of money. By 2014, it will cost these states over $600 million per year.

The deduction — enacted as Section 199 of the federal Internal Revenue Code — allows companies to claim a tax deduction based on profits from “qualified production activities,” a sweeping category that goes well beyond manufacturing to include such diverse activities as food production, filmmaking, and utilities — a substantial share of states’ corporate income tax base.

These deductions are largely worthless, and many states have tossed them overboard. But 25 states still leave it intact:

As CBPP noted, “Firms can claim the domestic production deduction for profits from all qualifying domestic activities — meaning activities that occur anywhere within the United States. As a result, a multi-state firm can claim the deduction in a conforming state for production activities in any state, not just the state where the firm is filing.” They also benefit large firms at the expense of small.

State efforts to encourage corporate growth and job creation through the tax code usually encourage a race to the bottom, as corporations play states off each other in order to secure the most preferential treatment, and then feel no hesitation about up and leaving later. Of course, paying corporations to create jobs is only one of the bone-headed ways states try to generate economic activity.

Virginia Gov. Bob McDonnell (R) has been stumping for his new transportation plan, which would eliminate the state’s gas tax and instead fund transportation via an expanded sales tax. The plan would shift the cost of transportation funding away from those who use the system and onto Virginia’s poorest residents. But so far, it has encountered little resistance:

Virginia Gov. Bob McDonnell’s controversial transportation bill passed the House of Delegates Finance Committee on Wednesday, moving past its first hurdle in the state’s 2013 General Assembly session.

In a 14-8 vote along party lines, the committee passed McDonnell’s package, which calls for eliminating the state’s 17.5 cents per gallon gas tax and raising the state sales tax from 5 percent to 5.8 percent.

McDonnell’s plan would wallop the poor, while letting the richest Virginian’s (not to mention any out of state drivers passing through) off largely scot-free, as this chart shows:

“Eliminating the gas tax paid by highway users and raising taxes on all other Virginians to pave our roads makes no sense,” said State Sen. Chap Petersen (D). “Indeed, eliminating our traditional road funding because cars are more efficient makes about as much sense as canceling your child’s college fund because tuition keeps rising.”

Wages last year plummeted to an all-time low as a percentage of the economy, even as corporate profits rocketed to new highs. This means that corporations have been able to squeeze more and more productivity out of workers, without rewarding them for their efforts.

According to a new report from the Economic Policy Institute, this phenomenon has been a long time coming. In fact, workers have seen precious little gain from increased hours and productivity since 1979:

Workers have been offering more to the economy and the labor market, and what they have received in return — particularly in the form of real hourly wages — has been very disappointing. This trend is particularly evident when considering that the majority of workers — especially those in the bottom 60 percent of the wage distribution — increased their work hours substantially between 1979 and 2007, the last year before the current recession. However, during this period (excluding a brief interlude of strong economic growth between 1995 and 2000), real (i.e., inflation-adjusted) hourly wages of the bottom 60 percent grew modestly — ranging from an actual decline for the bottom fifth to annual growth of about 0.25 percent for the middle fifth. This growth is far less than the increase in economy-wide productivity over that time.

As EPI noted, “In contrast, those at the top fared much better: The stock market grew strongly, CEO compensation grew twice as fast as the stock market, [and] wealth grew for the top 1.0 percent.” In the still-fragile economic recovery, the bottom 90 percent of workers have seen their wages fall, while “the top 1.0 percent of wage earners are likely to quickly recoup all of the ground lost in the downturn.”

An NBC News investigation released yesterday revealed that credit reporting agency Equifax has assembled a private database containing the employment and salary records of more than one-third of U.S. adults, and is perfectly fine selling that data off to the highest bidder:

Some of the information in the little-known database, created through an Equifax-owned company called The Work Number, is sold to debt collectors, financial service companies and other entities… [...]

Its database is so detailed that it contains week-by-week paystub information dating back years for many individuals, as well as other kinds of human resources-related information, such as health care provider, whether someone has dental insurance and if they’ve ever filed an unemployment claim. In 2009, Equifax said the data covered 30 percent of the U.S. working population, and it now says The Work Number is adding 12 million records annually.

The information is collected with the cooperation of employers, who pay The Work Number to provide verification services for former employees, surrendering data at the same time. Fortune 500 companies and government agencies representing 85 percent of the federal civilian population contract with The Work Number. And since Equifax is a credit reporting agency, rather than just a data-mining outfit, it’s all perfectly legal for them to provide this information to debt collection agencies.

Sen. Jay Rockefeller (D-WV), Chairman of the Senate Committee on Commerce, Science and Transportation, opened a congressional investigation into the data-mining practices of several corporations including Equifax in October of last year, sending letters to each company asking for extensive details about all data collection operations since the start of 2009. But the investigation focuses on background check services rather than it’s financial reporting services.

Read more

Mitt Romney’s infamous “47 percent” remarks, in which he told attendees at a private fundraiser that he could “never convince” people who receive government benefits “that they should take personal responsibility and care for their lives,” became one of the most damaging moments of his campaign. Now, another Republican candidate is adopting similar language.

Virginia Attorney General Ken Cuccinelli, the Republican Party’s presumptive nominee in the state’s 2013 gubernatiorial race, will release a new book in February to burnish his conservative credentials. In excerpts reviewed by the Washington Post, Cuccinelli takes a similar tack to Romney, criticizing both politicians who “dispense subsidized government benefits” like Medicare and Social Security and Americans who “vote for those politicians…rather than the fiscally responsible” candidates:

“One of their favorite ways to increase their power is by creating programs that dispense subsidized government benefits, such as Medicare, Social Security, and outright welfare (Medicaid, food stamps, subsidized housing, and the like). These programs make people dependent on government. And once people are dependent, they feel they can’t afford to have the programs taken away, no matter how inefficient, poorly run, or costly to the rest of society.” [...]

“Citizens will vote for those politicians who promise more benefits each year, rather than the fiscally responsible politicians who try to point out that such programs are unsustainable and will eventually bankrupt the states or the nation.

“Creating government dependency is the typical method of operation for big-government statists.“

Cuccinelli’s attacks on a “culture of dependency” are common among top Republican politicians, but they ignore facts about the programs he criticized. Social safety net programs keep millions of people out of poverty each year — without safety net programs that provide food and housing assistance, unemployment insurance, Social Security, Medicaid, and any number of other services, more than a quarter of Americans would have lived in poverty last year, doubling the already historically-high rate.

Cuccinelli spares no one when it comes to his attacks on safety net, though. In a little-noticed speech at a religious conference last year, he blasted the Catholic Church for creating “a culture of dependency on government, not God.”