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Economy

After Demanding Senate Pass A Budget, GOP Refuses To Enter Budget Negotiations

House Republicans spent most of their time over the last three years reminding Americans that Senate Democrats hadn’t passed a budget in two, then three, then four years. It was a regular Republican talking point, a particular favorite of House Budget Committee Chairman Paul Ryan’s. But now that the Senate has returned to regular order by passing a budget, House Republicans are refusing to come to the table to negotiate a long-term spending plan.

Republicans passed their own budget, the plan Ryan authored, in March, and since the proposal differs from the Senate budget, regular order requires the two chambers to come together in conference to iron out their differences in a compromise budget that is then taken back to the full memberships of each house. Senate Majority Leader Harry Reid (D-NV) has hinted at forming such a conference for more than a week, but Republicans have shown no willingness to join him. This morning, Senate Republicans blocked Reid from creating a conference committee, a move that led Reid to accuse them of turning “a complete 180″:

It seems House Republicans don’t want to be seen even discussing the possibility of compromise with the Democrats for fear of a Tea Party revolt,” Reid said.

He noted that Republicans have called for “regular order” for years.

“A strange thing happened: House Republicans did a complete 180 — they flipped. They’re no longer interested in regular order even though they preached that for years,” Reid said.

The GOP offered numerous excuses for why they wouldn’t approve a conference, including that certain rules need to be worked out. Ryan and Alabama Sen. Jeff Sessions (R), the ranking member on the Senate Budget Committee, have said they need to agree to “framework” for a deal to make a compromise more likely.

What that “framework” would need to be to get Republicans to agree to conference, however, is clear: a deal that cuts spending but includes no new tax revenue. That has been a consistent GOP demand throughout budget and spending fights over the last three years, a sticking point that has brought the government to the brink of both shutdown and default. It’s also a concession Democrats and President Obama are unwilling to make, given that they have already agreed to nearly $2.5 trillion in spending cuts while receiving little revenue in exchange. Any new deal, in fact, would have to achieve 90 percent of its deficit reduction from tax revenue to balance the overall reductions achieved in the last four years.

Climate Progress

GOP Voting For House Budget’s Big Oil Giveaway Receive $38 Million In Oil Cash

By a vote of 221-207, Republicans passed Rep. Paul Ryan’s (R-WI) budget for the third consecutive year. The House Republican budget slashes funding for poverty programs and dramatically transforms Medicare for seniors, all while it grants tax breaks to special interests like Big Oil.

Ryan’s budget could mean a $2.3 billion additional tax break for the five biggest oil companies, according to a Center for American Progress analysis. Republicans would still maintain the industry’s $4 billion annual tax breaks at the same time they slash research and investment in clean energy.

According to data from the Center for Responsive Politics, Republicans who voted for Ryan’s budget have received more than $38 million from oil and gas over their careers. On average, the “yeas” received over four times the career oil cash as the “nays”:

Career contributions:

  • 221 Yeas (221 Republicans) – $38,056,766
  • 207 Nays (197 Democrats and 10 Republicans) – $7,830,295
  • The 221 members who voted yes received more than $12,400,000 in the 2012 cycle alone, compared to nearly $2 million for the no votes. The vote makes the 113th Congress no different from the 112th, when House members voting for a polluter energy package received $38.6 million.

    Big Oil hardly needs the help from taxpayers. While consumers faced record gas prices in 2012, the oil industry earned an outstanding $118 billion profit (and a trillion dollars over a decade).

    Economy

    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.

    Economy

    Faith Leaders Across America Protest Budget Cuts To Programs That Help The Poor

    A collection of faith groups will today hold protest actions across the country calling on Congress to pass a budget that invests in programs to help low-income Americans instead of giving tax breaks to the wealthy and corporations. The coalition will hold 21 events in 13 states, according to a release from Faith in Public Life, encouraging Congress “to protect families and seniors, reject austerity, and remind them we have enough for all in this country.”

    As part of the event, leaders will deliver loaves of bread and fish to Congress, a play on the Biblical story in which Jesus fed 5,000 hungry people with bread and fish. That took “a miracle,” the groups said in a release, but “it doesn’t take a miracle for Congress to pass a moral budget.”

    “In Jesus’ time, it took a miracle to feed all the hungry. But today in America, we have enough resources to feed everyone, house everyone, and educate everyone if our leaders have the political will to put the common good before tax breaks for big corporations and the super wealthy,” Rev. Dr. J. Herbert Nelson, II, Director of the Presbyterian Church (U.S.A.) Office of Public Witness, said in a release from Faith in Public Life. “Congress needs political courage, not miracles, to pass a just and moral budget that makes the wealthy pay their fair share and protects struggling families from further hardship.”

    One of the events will take place outside the district office of Rep. Paul Ryan (R-WI), the author of the House Republican budget that would grant tax cuts to the wealthy while finding two-thirds of its budget cuts from programs that help the poor. Faith leaders criticized that budget as “immoral and counter to our values” when it was released last week, and faith groups like the Nuns on the Bus campaign have targeted Ryan and other Republicans for their insistence on similar budget cuts in the past.

    The coalition includes interfaith, Christian, and Jewish groups, including the PICO National Network, Interfaith Workers Justice, and NETWORK, the Catholic social justice lobby that organized the Nuns on the Bus campaign.

    Economy

    The Most Radical Proposals In The House Conservative Budget

    As Congress struggles to find a compromise between the House Republicans’ and the Senate Democrats’ budget proposals this week, the House conservatives have jumped into the fray with their own budget proposal. The Republican Study Committee (RSC), helmed by Chairman Rep. Steve Scalise (R-LA) released an even more radical plan than the official House Republican budget, which disproportionately guts programs for low-income Americans while giving even bigger tax cuts to the wealthiest Americans. The RSC budget purports to eliminate the deficit in just 4 years and limit total discretionary spending to $950 billion, the lowest level since 2008. In order to achieve this goal, the RSC cuts non-defense spending by $6 billion over four years, while the GOP budget slows spending growth over the same period.

    Here are 5 of the most extreme proposals in the budget from the RSC, of which roughly two-thirds of Republicans in Congress are members:

    1. Raise the retirement age to 70. The RSC budget would delay eligibility for Medicare and Social Security benefits to age 70, while calculating cost-of-living adjustments using chained CPI, which cuts benefits by $1300 a year for each recipient. Raising the eligibility age for Medicare would force seniors to pay $11.4 billion in extra costs.

    2. Reinstate Bush tax cuts. Bush-era tax cuts for the wealthiest Americans have greatly exacerbated income inequality while doing little for economic growth. As such, President Obama allowed the tax cuts for people making over $450,000 a year to expire at the end of 2012. The RSC would reintroduce those tax cuts, eliminating $823 billion in revenue and adding $950 billion back into the deficit over ten years.

    3. Freeze all spending for four years. In order to meet the fantastical goal of eliminating the deficit in four years, the RSC budget would cap all discretionary spending to $950 billion, allegedly close to 2008 spending levels but actually around $100 billion less when adjusted for inflation. It would then freeze all discretionary spending at that level until 2017, when the budget would supposedly be balanced.

    4. Eliminates the National Labor Relations Board, the National Endowment for the Arts, and Public Broadcasting. The RSC budget entirely does away with the NLRB, which oversees labor practices, the Corporation for Public Broadcasting, which the budget states is a “government-supported media outlet” against the principles of “a free society,” and the National Endowment for the Arts, which is “an inappropriate function of the federal government and is nowhere justified in the Constitution.”

    5. Repeal Obamacare. The House has wasted more than 30 votes trying to repeal the Affordable Care Act, undeterred by public opinion or a Supreme Court decision. Still, the RSC budget would repeal Obamacare, kicking more than 30 million Americans off their insurance and once again allowing insurance companies to discriminate against people with pre-existing conditions.

    Economy

    House GOP Budget Would Give Millionaires A $200,000 Tax Cut

    The latest House Republican budget would grant taxpayers with incomes above $1 million at least $200,000 in tax cuts even if the GOP closes tax loopholes to help pay for the plan, according to an analysis from Citizens for Tax Justice.

    The GOP plan, authored by Budget Committee Chairman Paul Ryan (R-WI), aims to reduce the top income tax rate to 25 percent and repeals many other taxes on the rich, including the Alternative Minimum Tax and increases included in Obamacare. Ryan wants to pay for the tax cut by closing loopholes and ending tax expenditures. The budget didn’t specify which loopholes and expenditures would be eliminated, but even if all of them that benefit the rich were done away with (except for preferences for capital gains and other investments, which Ryan has said he will keep), the budget would grant millionaires a tax cut in excess of $200,000. If it doesn’t eliminate loopholes, the tax cut would only grow larger, CTJ found:

    In fact, under Ryan’s plan taxpayers with income exceeding $1 million in 2014 would receive an average net tax decrease of over $200,000 that year even if they had to give up all of their tax expenditures. These taxpayers would see an even larger net tax decrease if Congress failed to limit or eliminate enough tax expenditures to offset the costs of the proposed tax cuts.

    Like former GOP presidential candidate Mitt Romney, Ryan insists that his plan will simultaneously grant a large tax cut to the wealthy, avoid tax increases on the lower- and middle-classes, and maintain the current level of revenue. The Tax Policy Center found during the election that those goals were impossible to maintain under Romney’s proposal and that to avoid adding to future deficits and debt, the plan would have to raise taxes on the middle class by an average of $2,000.

    The current House GOP proposal provides an even bigger tax cut, making it even less likely that Ryan could raise sufficient revenues from the closure of tax loopholes to offset the estimated $5.7 trillion cost. To pay for the plan, then, the GOP would have no choice but to raise taxes on the middle class (by an average of $3,000) while granting a massive tax cut to millionaires. If it doesn’t, the Republican plan to reduce the debt will instead add trillions of dollars to it.

    Economy

    Boehner Agrees With Obama: The Debt Crisis Is Not ‘Immediate’

    The arrival of budget season has brought debt panic back to the Beltway. But President Obama threw cold water on the matter last week, telling ABC’s George Stephanopoulos that the United States does not face “immediate crisis in terms of debt.” And this morning, House Speaker John Boehner (R-OH) essentially told ABC’s Martha Raddatz he agrees with Obama, calling the debt crisis “looming,” but not “immediate.”

    “We do not have an immediate debt crisis,” Boehner said on ABC News’s “This Week With George Stephanopoulos.” “But we all know that we have one looming. And we have — one looming — because we have entitlement programs that are not sustainable in their current form. They’re gonna go bankrupt.” [...]

    “[President Obama's] point, as he went on to say in that interview, is that we don’t — we don’t really need to do anything at this point. And I would argue that we do need to do something,” said the House speaker.

    Debt is already projected to remain at or below its current share of the economy for the next decade, and it’s good that Boehner is standing in agreement with the president on that point.

    Unfortunately, the budget the House Republicans just released does not reflect this realization. It cuts all spending that isn’t Medicare, Social Security, or the military down to near-historic lows over the next ten years. America’s economy remains in the doldrums, leaving the unemployment rate at 7.7 percent (it has never been that high for that long since the Great Depression) and all the real-world evidence we have indicates that austerity in depressions cripples economic growth. If everyone agrees the debt crisis is not immediate, then job growth and economic revival should be topping deficit reduction on the country’s list of priorities.

    Nor is there a great deal of evidence to back up Boehner’s distinction between an “immediate” and “looming” debt crisis. The long-term projections of mounting debt he and other D.C. lawmakers rely on are in fact riddled with dramatic assumptions and uncertainties about the future behavior of both Congress and the economy.

    Economy

    Five Reasons Washington Shouldn’t Panic About The Debt

    Once again, the March budget season has arrived, and Rep. Paul Ryan (R-WI) has engineered another draconian fiscal vision for the House Republicans. The plan would radically remake Medicare, decimate Medicaid, grant a huge tax cut to the wealthy, and slash support for the poor, investments, and civic infrastructure.

    Ryan and his cohorts justify these plans by insisting that America faces a “debt crisis,” that the deficits we’re currently running are too high, and that we must act immediately to fix these problems. Centrists and other “serious” pundits and lawmakers throughout Washington have bought this argument, if not all the details of Ryan’s specific solution, and they’ve scoffed at President Obama’s insistence that we don’t actually face a looming debt crisis. Here are the reasons Obama’s right, and they’re all wrong:

    1. We don’t ever have to actually eliminate the debt: The United States ran up a huge debt burden in World War II. More importantly, in raw dollar terms, we never repaid that debt. We simply grew the economy so that the size of the debt fell in comparison. That’s what’s happening in graphs where the debt burden drops in the post-war years. That burden is measured as a ratio of debt-to-GDP, and in ratios the denominator matters as much as the numerator.

    2. The budget doesn’t actually have to balance to reduce it: If we can keep deficits under a certain threshold every year, then economic growth will overtake it, meaning our debt-to-GDP ratio will either stay the same or even drop. For the immediate future, the economy looks set to grow by about 4 percent a year in nominal terms (that is, real growth plus inflation). If we can keep each year’s deficit to 4 percent or less of public debt already held, debt-to-GDP will stabilize. America can, in fact, run deficits in perpetuity.

    3. The debt is already as balanced as it needs to be: Federal spending involves a host of programs called “stabilizers” — spending that automatically kicks in when the economy tanks, without any acts on the part of lawmakers, boosting GDP growth and helping Americans who have lost their jobs. These include unemployment insurance, food stamps, welfare, Medicaid, and many others. Tax revenues also naturally fall as unemployment rises.

    The Congressional Budget office just released a report that stabilizers will add $422 billion to the deficit in 2013. That leaves $423 billion — out of the estimated $845 billion deficit for the year — that isn’t due to the automatic stabilizers. Publicly held U.S. debt is currently around $11.5 trillion, and $423 is less than 4 percent of that.

    Take out the stabilizers, and the deficit is within the window necessary to stabilize the debt. And all we have to do to unwind the stabilizers is get the economy firing on all cylinders again. This holds true for about the next decade, before growth in Social Security, Medicare, and Medicaid finally begin to slowly overtake it. The country still has problems, but it has lots of time to sort them out.

    4. The “debt crisis” is not a certainty: Paul Ryan may talk as if it is, but it’s merely a projection — one possible result if the CBO’s guesswork about the future proves accurate. The Center for American Progress recently dove into CBO’s methodology, and found that the projections build in a host of sometimes-dramatic assumptions about Congress’ future spending and taxation choices, as well as other factors that could very well not come to pass.

    Beyond trying to predict future Congress’ policy preferences, much of the future debt is based on projections that health care costs will continue growing at their previous trend. But the whole point of health care reform is to alter that trend by altering health care markets. Obamacare may already be doing this. CBO’s projections for Medicare spending over the next decade dropped by $500 billion between 2010 and 2013, simply because health care cost growth unexpectedly slowed.

    In fact, if that slowdown becomes the new norm, Medicare spending will stay essentially flat as a share of the economy from here on out. That doesn’t show up in CBO’s long-term projections because their methodology uses cost growth over the last two decades to predict future trends. (See page 60.) It’s literally within the realm of reasonable possibility that the long-term debt problem is already solved — all without lawmakers having to cut a dime.

    5. We don’t know how much debt actually causes crisis: Ryan and others often cite a finding that economic growth slows as debt-to-GDP reaches 90 percent. But there’s a big correlation-causation problem with this. Remember the denominator: slowing GDP, regardless of debt, could raise debt-to-GDP just as much as higher debt could. And the countries that fit with the 90 percent threshold prediction also present an apples-to-oranges problem when compared to America. Britain, Japan, and France — advanced democracies like ours, with their own currency — shouldered debt levels far in excess of 90 precent over extended periods of time in the past. No debt crisis arrived.

    In conclusion: the “debt crisis” is a mere phantom — only one of many possible futures, and far from a certainty. The interest America is paying on its debt is currently lower than it was in the 1990s, despite a lower debt-to-GDP ratio then. When inflation is factored in, current real interest rates on our debt are negative. Financial markets are willing to pay us to borrow from them.

    Meanwhile, every dollar we cut — nay, every dollar we fail to borrow — is a dollar that isn’t going to shore up the safety net, to rebuild the country’s infrastructure, or to support struggling Americans while their livelihoods remain on the line. That we’re passing on this opportunity to repair our country, much less even considering the monstrosity that is the Ryan budget, really is absurd.

    Climate Progress

    Rep. Ryan Needs To Learn Something (Anything!) About Clean Energy

    What do you call a future of dangerous pollution, catastrophic extreme weather events, giveaways to Big Oil companies, and even greater reliance on fossil fuels? If you’re House Budget Committee Chairman Paul Ryan (R-WI), you call it “The Path to Prosperity.”

    Not coincidentally, that’s the name of the fiscal year 2014 budget plan Rep. Ryan released yesterday. It contains so many false or misleading attacks on clean energy that you could be forgiven for thinking that some of it just sounds, well — ridiculous. He decries support for so-called special interests; he claims that there have been billions of dollars in failed loans; and he asserts that energy prices are being raised arbitrarily.

    His proposal makes clean energy sound terrible. Fortunately, however, none of it is true. The reality is that clean energy is the real “path to prosperity,” and the Ryan plan would take us down exactly the wrong road.

    While we shouldn’t hold out much hope that Rep. Ryan will ever change his tune on clean energy, it’s important to know just how wrong he is. There are three key facts about clean energy that he chooses to simply ignore, which leads to the terrible policy recommendations in his budget.

    Fact No. 1: Americans of all stripes support clean energy, not fossil fuels.

    The Ryan budget proposal makes it sound like no one in America besides the Obama administration supports clean energy. But that is simply not the case. In a poll of four swing states — Colorado, Iowa, Ohio, and Virginia — taken after the November 2012 election, more than 70 percent of voters supported continued government investments in clean energy.

    Americans support these investments because they know that these are the clean, renewable energy sources of the future. That’s why the government needs to invest in these emerging technologies now as opposed to continuing to subsidize the fossil fuels of the past.

    Rep. Ryan’s budget would spend more on dirty fossil fuels than on clean efficiency and renewable power. There’s no reason for the government to be spending anything at all on mature fossil-fuel technologies. How can Rep. Ryan ignore the century’s worth of tax breaks for fossil-fuel companies, which dwarf the recent investments in clean energy? In fact, according to a report by DBL Investors, the oil-and-gas industry received almost 100 times as much federal support as renewables between 1918 and 2009.

    While Rep. Ryan writes that “[the Obama administration] pours money into its favored industries,” the fact is that the administration is doing exactly what the American public wants it to do: supporting a transition to a clean energy future by investing in emerging technologies.

    Fact No. 2: Clean energy investments are sound investments.

    Fortunately, investments in clean energy are good sound investments for the government to make.

    Much of the Ryan budget is dedicated to slandering companies that received loan guarantees from the Department of Energy. According to Rep. Ryan, “Many of the administration’s loan-guarantee projects have failed.” The fact, though, is that the overwhelming majority of loan-guarantee recipients are thriving and will pay back the government with interest. Just last week, for example, electric-vehicle manufacturer Tesla reported that it will pay back its government loan a full five years ahead of schedule.

    In fact, the entire loan-guarantee program for advanced energy technologies is healthy. Just last year, Herb Allison, the national finance chair of Sen. John McCain’s (R-AZ) 2000 presidential campaign, conducted an analysis of the entire program’s portfolio and concluded that it will cost taxpayers $2 billion less than initially expected.
    Read more

    Economy

    Back To 1948: Ryan’s Fantasy Budget Cuts Spending To Its Lowest Level In 65 Years

    Over at Investors.com, Jed Graham ran the numbers on Rep. Paul Ryan’s (R-WI) new budget for the House GOP, and found that by 2023, it would drive all government spending that isn’t either Social Security or interest on the debt to its lowest level since 1948. On every other occasion in the last 60 years that this category of spending dipped that low, unemployment was never over 4.5 percent — it’s currently at 7.7 percent.

    Graham found, “the entirety of federal spending outside of Social Security and interest on the debt (16.4 percent of GDP in 2012) would shrink to 11.2 percent of GDP” by 2023, “a level not seen since 1948.” In fact, the situation is even worse, since in 1948 this spending did not yet include “ObamaCare, Medicare, Medicaid, NASA, the interstate highway system” or a host of other needed programs now in operation:

    In fact, if Medicare is discounted as well as Social Security and interest payments, spending shrinks to 7.9 percent in 2023, the lowest levels for that slice since 1938.

    This is tiresome and grossly irresponsible, but hardly surprising. Ryan’s previous budget would’ve shoved non-defense discretionary spending — which includes most of the government’s investments in economic growth, veterans’ health care, food safety, drug safety, consumer product safety, federal law enforcement, and more — to 2.1 percent of GDP. Since 1962, the first year for which we have comprehensive data, non-defense discretionary spending has never dropped below 3.2 percent of spending.

    Nonetheless, Ryan’s latest budget once again aims for the 2.1 percent mark by 2023, leading Michael Linden at the Center for American Progress to dismiss it as fantasy. “[I]t’s is far easier to ‘cut’ the nebulous category called ‘nondefense discretionary’ than it is to cut actual programs, benefits, and protections that the public knows and likes,” Linden writes. “But in fact, for these kinds of cuts to actually come to pass, Congress — now and in the future — will have to get specific. And if they decide that they can’t, in reality, reduce these things to levels unheard of in generations, then Rep. Ryan’s claim to a balanced budget falls apart.”

    Sure enough, American voters only support cutting spending when it’s vaguely referred to as “spending.” Name specific programs, and public support for cutting them utterly collapses.

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