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The Myth Of ‘Dependency’: Almost All Households On Food Stamps Will Be Employed Within A Year

One of House Budget Committee Chairman Paul Ryan’s (R-WI) favorite ways of defending the House Republicans’ budget is to claim the social safety net represents a moral threat to Americans’ character, as well as a fiscal threat to their country’s budget. He’s incessantly warned of luring “able-bodied people into lives of dependency and complacency” and depriving them “of their will and their incentive to make the most of their lives.” In his latest budget, he introduced his cuts to Medicaid, nutrition assistance, and other support programs for low-income Americans with a warning that the safety net “can create a powerful disincentive to get ahead.”

Included in those cuts is a massive reduction in spending on the Supplemental Nutrition Assistance Program (SNAP). But the Center On Budget and Policy Priorities took a look at the employment situation of Americans who rely on the program, and the reality belies Ryan’s rhetoric:

Among households with children that include an adult who isn’t elderly or disabled, 87 percent of the households receiving SNAP in a given month include an individual who worked in the prior year or will work in the following year.

Ryan actually has an ongoing problem when it comes to honestly representing the SNAP program. Last year, he claimed it was “growing at unsustainable rates” — a notion that fails to account for the effects of the recession, that fails to differentiate spending in raw dollars from spending as a share of the economy, and which utterly ignores the program’s projected path over the next decade.

Ryan’s budget would cut SNAP spending by $135 billion between now and 2023 — requiring either 12 to 13 million of the 44.7 million people currently on the program to be kicked off, or a reduction in benefits of $190 a month for the poorest of American families by 2019. Nor did the 1996 welfare reform law — on which Ryan models his current budget proposals — turn out to be the success he presents it as. In the aftermath of the Great Recession, welfare’s case load grew only 16 percent, even as the numbers of the unemployed increased by 88 percent; an utter failure to keep up with the needs of impoverished Americans.

As for the safety net as a whole, CBPP cites research from the National Bureau of Economic Research that one of every seven Americans would be poor without the safety net, but are above the poverty line because of it — a total of over 40 million people.

How Two Republican Senators Are Using A Bait-And-Switch To Scuttle Democrats’ Revenue Goals

Sens. Roy Blunt (center) and John Thune (left)

Sens. Roy Blunt (R-MO) and John Thune (R-SD) this afternoon offered an amendment to the Senate Democratic budget that they claim will protect the charitable tax deduction from elimination or restriction under the tax reform sought by Democrats. In reality, though, the amendment is a simple bait-and-switch attempt to reduce the budget’s overall revenue levels and would have no bearing on the charitable deduction.

The Democratic budget, authored by Washington Sen. Patty Murray (D), includes $975 billion in new revenues over the next decade to be gained through the closure of tax loopholes and elimination of tax expenditures that benefit the wealthy and corporations. The charitable deduction is among the most popular expenditures on both sides of the partisan spectrum, making it the perfect candidate for Blunt and Thune’s ploy.

The purpose statement at the top of the amendment reads:

To protect charitable organizations from being used as a source of revenue to pay for more spending by protecting the deduction for charitable giving from being capped, limited, or eliminated to pay for new spending as part of any tax increase.

Aside from that totally meaningless sentence that has no legislative significance, the amendment does not mention the charitable deduction. Instead, it simply cuts revenue levels for each year between 2014 and 2023. In total, the amendment would cut the amount the revenue originally sought by the Democratic budget roughly in half. It would have no impact on the charitable deduction, one way or the other, and would not in any way protect the tax break for charitable giving. The amendment, despite what Thune and Blunt would have people believe, is nothing more than a massive reduction in the budget’s revenue goals masked as protection of a popular tax deduction.

How Economic Growth Can Save The Planet

Arguments over the feasibility and morality of economic growth as a continuing societal goal typically pit left wing critics of capitalism, traditionalist conservatives, and strands of the environmental movement against mainstream liberals and those on the libertarian right.

There are two primary criticisms of growth from the left-traditionalist camp.  One, is an ecological argument about “the limits to growth,” dating back to 1972 and start of the modern environmental movement, which argues that we cannot sustain the type of consumer capitalism we’ve embarked on over the past 40 years without global “overshoot” that will eventually lead to environmental catastrophe, resource depletion, pollution, and scarcity.  A second line of attack is a moral argument that contemporary growth-oriented capitalism inevitably exacerbates poverty and inequality, undermines democracy, and sacrifices traditional values, families, and communities to the amoral logic of markets.

The “limits to growth” folks usually get the short end of the stick in these discussions and are too often painted as reactionaries, radicals, or Luddites.  But they raise a series of important points about the nature of modern capitalism and liberal democracy that progressives should consider.  As Gus Speth outlines in his beyond growth manifesto, inequality is at record levels within our own country and in relation to others.  Global climate change continues unabated despite a zillion conferences and plans to combat it.  Corporations and the wealthy exert too much control over our democratic governments.  People buy too much stuff and we produce too much waste.  We spend too much on the military and too little on the social needs of our own people.  These are uncomfortable trends for the proponents of unfettered growth to acknowledge.

Pro-growth liberals push back that despite its drawbacks, a steadily expanding economy is critical to achieving the type of society progressives hold dear.  Robert Reich and Benjamin Friedman argue that growth leads to a whole host of desired outcomes from improved education and health care to rising tolerance and respect for individual rights.   As Friedman writes, “Economic growth—meaning a rising standard of living for the clear majority of citizens—more often than not fosters greater opportunity, tolerance of diversity, social mobility, commitment to fairness, and dedication to democracy.”  These are clearly important political and social outcomes of economic growth that post-growth proponents tend to downplay.

Can these two perspectives be reconciled?  Yes, if we structure the right kind of growth, which is essentially a political decision.  Here’s Reich:

Growth is different from consumerism. Growth is really about the capacity of a nation to produce everything that’s wanted and needed by its inhabitants. That includes better stewardship of the environment as well as improved public health and better schools. (The Gross Domestic Product is a crude way of gauging this but it’s a guide. Nations with high and growing GDPs have more overall capacity; those with low or slowing GDPs have less.)

Read more

Boehner Pledges To Keep Country In Perpetual Crisis: Intends To Take Debt Ceiling Hostage Again

Right after the House of Representatives approved a Senate bill to avert a government shutdown, House Speaker John Boehner (R-OH) set the stage for another down-to-the-wire crisis that will threaten the nation’s economic growth. At his weekly press conference, Boehner indicated that Republicans would again demand spending cuts in exchange for raising the nation’s debt ceiling, which it is set to hit in May.

Boehner said Republicans would only raise the debt ceiling if they got an equal amount of spending cuts, the Huffington Post reports:

Dollar for dollar is the plan,” Boehner told reporters, adding that there have been no major talks on the debt limit at this point.

“The president has been clear that he’s not going to address our entitlement crisis unless we’re willing to raise taxes. I think the tax issue has been resolved,” said Boehner. “So at this point then, I don’t know how we’re going to go forward.”

Boehner’s House of Representatives has created an atmosphere of perpetual crisis in Washington since the GOP took control in 2011. The GOP took the government to the brink of shutdown early in 2011 before nearly forcing a default by demanding spending cuts in exchange for a debt ceiling increase that summer. That fight set up sequestration, the automatic budget cuts that threatened to derail the economy at the beginning of 2013 before a last minute deal pushed them back to the beginning of March. Republicans failed to extract more cuts when the debt ceiling was temporarily extended in January, but Boehner is now seeking to make sure cuts happen in May — even though the U.S. has already cut more than $2 trillion in spending over the last three years.

Those cuts have hammered the economic recovery, as has the culture of crises Boehner and the GOP have created. The last debt ceiling fight increased borrowing costs and slowed down economic growth, but despite evidence that both the GOP’s fights and their preferred policies are harming the economy, Boehner insists on repeating the same mistakes. Raising the debt ceiling was never an issue for Boehner when George W. Bush was president, but the recent fights have proven so harmful that top policymakers like Federal Reserve Chairman Ben Bernanke are now calling for the permanent abolition of the debt limit.

Starbucks CEO Comes Out In Favor Of A Minimum Wage Increase

Howard Schultz, the Chief Executive Officer of Starbucks, has added another pro-worker notch to his belt: support for increasing the minimum wage.

Schultz already has a relatively good reputation on workers’ issues; his company offers health care to all of its employees, and doesn’t mind spending more on health care than on coffee. Starbucks also launched, in 2011, a a pro-jobs effort where patrons could donate to a loan program that helps small businesses keep jobs and hire.

Now, he is tentatively putting his weight behind the Democratic push to increase the minimum wage from $7.25 to something more like $9 or $10 an hour. In an interview with CNBC, Schultz said, “I am a supporter of the minimum wage going up“:

Howard Schultz, the head of the global coffee giant, told CNBC Wednesday that “the minimum wage issue is a double-edged sword,” because while boosting it would mean higher wages for workers, it may also discourage businesses from hiring more people.

“On balance, I am a supporter of the minimum wage going up,” he said. “We’ve got to be very careful what we wish for because some employers — and there could be a lot of them — will be scared away from hiring new people or creating incremental hours for part-time people as a result of that wage going up.”

Last week, House Republicans voted down a proposal pushed by Minority Leader Nancy Pelosi (D-CA) that would have raised the minimum wage to $10.10 an hour. The Senate has made no motions to improve the wage. Sen. Elizabeth Warren (D-MA), however, has pointed out that the minimum wage would be $22 an hour if it had been adjusted for inflation and worker productivity. Indexed to inflation alone, it would stand at $10.40.

Schultz is joined in his support for an increased minimum wage by Costco CEO Craig Jelinek. Jelinek, however, has said he would actually like to see it rise higher than $10 an hour.

House GOP Approves Budget That Cuts Taxes For Millionaires, Slashes The Social Safety Net

The House of Representatives this afternoon approved the Republican budget plan authored by Rep. Paul Ryan (R-WI) by a vote of 221-207, with 197 Democrats and 10 Republicans voting against it. Three Democrats and one Republican did not vote.

For the third consecutive year, the House GOP has approved a budget that ends the traditional guaranteed Medicare coverage for senior citizens, makes substantial cuts to poverty programs and the social safety net, and grants massive tax cuts to the wealthiest Americans. Recent analyses have shown that the budget plan’s tax reforms, which lower top tax rates to 25 percent, would give millionaires at least $200,000 in tax cuts. At the same time, it would slash the social safety net, targeting poverty programs for two-thirds of its cuts.

Though Ryan claims his budget would balance in 10 years, that is unlikely because he depends on fantasy levels of revenue and spending that are unlikely to be realized under his plan. The tax cuts, for instance, would reduce federal revenues by $5.7 trillion, making it virtually impossible to avoid adding to the deficit or debt without raising taxes on the middle class. The Center on Budget and Policy Priorities, in fact, found that the House GOP would have to raise taxes on the average middle class family by $3,000 to avoid adding to the deficit.

Before approving the GOP budget, the House voted down the Democratic budget offered by Rep. Chris Van Hollen (D-MD) that included stimulus spending to boost the economy and reduced the deficit by $1.7 trillion in part by closing tax loopholes that benefit the wealthy.

Federal Reserve Chair: ‘Too Big To Fail’ Banks Still A Problem

Amid rising concerns about large banks from senators, Federal Reserve Chairman Ben Bernanke said Tuesday that “too big to fail” banks still pose a major risk to the American economy. Massachusetts Sen. Elizatbeth Warren (D) grilled Bernanke over the persistence of Too Big To Fail institutions during a Senate hearing last week, and at a press conference yesterday, Bernanke made it clear that he agrees with Warren that such banks are still a “major issue” that need to be addressed:

BERNANKE: I certainly never meant to say to Senator Warren, and I share her concern about Too Big To Fail, it’s a major issue. I never meant to imply that the problem was solved and gone. It is not solved and gone. … I hope that we’ll make progress against Too Big To Fail, because I agree with her 100 percent that it’s a real problem and needs to be addressed if at all possible.

Warren’s reputation as a critic of Wall Street followed her to the Senate, where she has questioned regulators over bank prosecutions and whether large financial institutions were “too big for trial.” But Warren isn’t alone: Ohio Sen. Sherrod Brown (D) and Louisiana Sen. David Vitter (R) are prepping legislation to reduce the size of large banks, and Brown and Iowa Sen. Chuck Grassley (R) have also pressed regulators and the Justice Dept. over the lack of prosecutions that creates the perception that banks have a “get out of jail free” card.

The largest banks, as this chart Brown displayed on the Senate floor last month shows, have only grown larger since the financial crisis:

The key focus for Bernanke right now, he said, was ensuring that rules included in the Dodd-Frank Wall Street Reform Act and other international guidelines meant to reduce the risk of Too Big To Fail banks were instituted properly.

Econ 101: March 21, 2013

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 Federal Reserve announced that it will continue its efforts to stimulate the economy. [Reuters]
  • The Senate passed its version of a budget resolution to avoid a government shutdown. [New York Times]
  • House Republicans will vote on the Ryan budget plan today. [The Hill]
  • New efforts to fund a bailout of Cyprus’ financial sector were rejected Wednesday. [Wall Street Journal]
  • Michigan unions are rushing to complete new bargaining agreements before the state’s “right-to-work” law takes effect next week. [Wall Street Journal]
  • The White House notified Congress that it plans to begin trade talks with the European Union. [Reuters]
  • Great Britain will stick with austere policies even as it reduced its economic growth forecast again. [CNN Money]

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