Where Did the Debt Come From? (by seeprogress)
Small Business Voices: Small Businesses Aren’t Impacted by Expiration of Bush Tax Cuts (by seeprogress)
Wayne Powell calls Eric Cantor out for paying himself while voting against paying military (by CAPcongress)
Wayne Powell schools Eric Cantor on his fiscal dysfunction as GOP Leader (by CAPcongress)
‘Legislators Should Focus on Helping Those in Need as They Tackle the Deficit:
Despite Dr. King’s campaign against poverty being cut short, government has played a role in helping many families and individuals escape from the perils of poverty since President Lyndon Johnson declared a war on poverty in 1964. And it’s made a difference. According to the U.S. Census poverty is lower now (14.3 percent) during the recovery from one of our nation’s biggest economic crises than it was in 1960 (22.2 percent). Although there is clearly more work to do, social programs are successfully preventing millions from suffering from food insecurity, unemployment, and homelessness as a result of the Great Recession. American Recovery and Reinvestment Act investments in the SNAP program helped prevent an estimated half million low-income households from suffering from food insecurity in 2009. Altogether, ARRA and the SNAP program are examples of how aggressive investments can help improve the lives of America’s people, realizing one dream of Dr. King—alleviating poverty in America. In the coming weeks the congressional super committee will convene and make major decisions aimed at reducing the national deficit. We know that we can reduce poverty while still balancing the budget as the Center for American Progress’s plan demonstrates. But to do so, legislators will need to stop the partisan warfare and focus on how we can improve the lives of all Americans, especially our most vulnerable ones. They will need to face the fact that they must take swift action and begin to raise revenue to prevent cutting areas such as antipoverty funds, which many Americans continuously support and which can be the difference for many struggling Americans. As Dr. King said: “The time is always right to do what is right.” ‘
Despite Dr. King’s campaign against poverty being cut short, government has played a role in helping many families and individuals escape from the perils of poverty since President Lyndon Johnson declared a war on poverty in 1964. And it’s made a difference. According to the U.S. Census poverty is lower now (14.3 percent) during the recovery from one of our nation’s biggest economic crises than it was in 1960 (22.2 percent).
Although there is clearly more work to do, social programs are successfully preventing millions from suffering from food insecurity, unemployment, and homelessness as a result of the Great Recession. American Recovery and Reinvestment Act investments in the SNAP program helped prevent an estimated half million low-income households from suffering from food insecurity in 2009. Altogether, ARRA and the SNAP program are examples of how aggressive investments can help improve the lives of America’s people, realizing one dream of Dr. King—alleviating poverty in America.
In the coming weeks the congressional super committee will convene and make major decisions aimed at reducing the national deficit. We know that we can reduce poverty while still balancing the budget as the Center for American Progress’s plan demonstrates. But to do so, legislators will need to stop the partisan warfare and focus on how we can improve the lives of all Americans, especially our most vulnerable ones. They will need to face the fact that they must take swift action and begin to raise revenue to prevent cutting areas such as antipoverty funds, which many Americans continuously support and which can be the difference for many struggling Americans.
As Dr. King said: “The time is always right to do what is right.” ‘
Battle for Libya: Al Jazeera talks to Larry Korb (by AlJazeeraEnglish)
What the Debt Deal Costs
‘Christian Weller and Diana Furchtgott-Roth talked about the implications of Standard and Poor’s downgrade of the credit ratings of Fannie Mae and Freddie Mac and other agencies linked to long-term U.S. debt. They also responded to telephone calls and electronic communications. Topics included the prospects for a “double dip” recession, jobs, Social Security and Medicare, and the housing market.’
Lawrence Korb, you are my hero.
An aerial view of the USS George H.W. Bush (CVN-77) aircraft carrier in Norfolk, Virginia. The United States currently fields 11 aircraft carriers, while no other country has even one of comparable size and power. The Pentagon could cancel procurement of the CVN-80 aircraft carrier and retire two existing carrier battle groups and associated air wings, saving $7.74 billion.
Defense spending skyrocketed 70 percent under the Bush administration, and President Barack Obama inherited a defense budget at highs not seen since the end of World War II. There is much room for savings with military spending far out of step with the threats facing our country.
As the Obama administration and Congress try to agree on a deal to raise the debt limit, they should keep in mind that they can cut $150 billion in defense spending annually and still keep our military budget at the Reagan administration’s peak Cold War levels. Bringing the defense budget down to the levels instated by Presidents Eisenhower, George H.W. Bush, and Clinton would require reductions of $250 billion to $300 billion annually.
Here are our recommendations on how to save $400 billion through 2015 without harming U.S. national security:
Redirect DOD’s planned efficiency savings to reduce the baseline defense budget ($133 billion through 2015)
Roll back post-September 11 efforts to grow the ground forces and reduce the number of civilian DOD personnel concomitant with the reduction in military end strength ($39.16 billion through 2015)
Reduce active-duty troops in Europe and Asia by one-third ($42.5 billion through 2015)
Cancel the V-22 Osprey program ($9.15 billion through 2015)
Reform military health care ($42 billion through 2015)
Limit procurement of the Virginia-class submarine and DDG-51 destroyer to one per year; limit procurement of the littoral combat ship to two vessels per year ($20.04 billion through 2015)
Cut procurement of the Navy and Marine F-35 Joint Strike Fighter variants ($16.43 billion through 2015)
Institute an across-the-board reduction in research, development, test, and evaluation funding ($40 billion though 2015)
Reform the military pay system as the Quadrennial Review of Military Compensation recommends ($13.75 billion through 2015)
Cancel procurement of the CVN-80 aircraft carrier and retire two existing carrier battle groups and associated air wings ($7.74 billion)
Cut the U.S. nuclear arsenal to 311 operationally deployed strategic nuclear weapons ($33.72 billion)
According to analysts at the Air War College and the School of Advanced Air and Space Studies, the United States could maintain effective deterrent capabilities with only 311 strategic nuclear weapons—approximately an 84 percent reduction in current levels. Phasing in these cuts—as well as some reductions in the United States’ tactical stockpile—could save about $11.39 billion per year beginning in 2015.
Additionally, cancelling select costly and technologically challenged missile defense programs administered by the Missile Defense Agency and the armed services could reduce spending by another $1.31 billion per year.
Read more at www.americanprogress.org
Requesting fiscally responsible defense budgets has historically been a bipartisan effort. As the United States winds down its involvement in Iraq and Afghanistan, the Obama administration has an opportunity to restore defense spending to more sustainable levels. In a forthcoming report, the Center for American Progress will provide an in-depth analysis of defense spending decisions under Presidents Eisenhower, Nixon, Reagan, George H.W. Bush, and Clinton in order to inform Congress and the Obama administration’s defense and deficit decisions.
The largest attack campaign against Democrats this fall is being waged by the U.S. Chamber of Commerce, a trade association organized as a 501(c)(6) that can raise and spend unlimited funds without ever disclosing any of its donors. The Chamber has promised to spend an unprecedented $75 million to defeat candidates like Jack Conway, Sen. Barbara Boxer (D-CA), Jerry Brown, Rep. Joe Sestak (D-PA), and Rep. Tom Perriello (D-VA). As of Sept. 15th, the Chamber had aired more than 8,000 ads on behalf of GOP Senate candidates alone, according to a study from the Wesleyan Media Project. The Chamber’s spending has dwarfed every other issue group and most political party candidate committee spending. A ThinkProgress investigation has found that the Chamber funds its political attack campaign out of its general account, which solicits foreign funding. And while the Chamber will likely assert it has internal controls, foreign money is fungible, permitting the Chamber to run its unprecedented attack campaign. According to legal experts consulted by ThinkProgress, the Chamber is likely skirting longstanding campaign finance law that bans the involvement of foreign corporations in American elections.
In recent years, the Chamber has become very aggressive with its fundraising, opening offices abroad and helping to found foreign chapters (known as Business Councils or “AmChams”). While many of these foreign operations include American businesses with interests overseas, the Chamber has also spearheaded an effort to raise money from foreign corporations, including ones controlled by foreign governments. These foreign members of the Chamber send money either directly to the U.S. Chamber of Commerce, or the foreign members fund their local Chamber, which in turn, transfers dues payments back to the Chamber’s H Street office in Washington DC. These funds are commingled to the Chamber’s 501(c)(6) account which is the vehicle for the attack ads:
– The U.S. Chamber of Commerce has created a large presence in the small, oil-rich country of Bahrain. In 2006, the Chamber created a local affiliate called the “U.S.-Bahrain Business Council” (USBBC), an organization to help businesses in Bahrain take advantage of the Chamber’s “network of government and business relationships in the US and worldwide.” As the USBBC’s bylaws state, it is not an actual separate entity, rather it is simply an office of the U.S. Chamber of Commerce’s 501(c)(6) trade association. Many of the USBBC’s board members are Bahrainian, including Aluminum Bahrain, Gulf Air, Midal Cables, the Nass Group, Bahrain Maritime & Mercantile International, the Bahrain Petroleum Company (state-owned), Gulf Petrochemical Industries Company, and First Leasing Bank. With each of these foreign board members to the USBBC contributing at least $10,000 annually, the U.S. Chamber of Commerce raises well over $100,000 a year in money from foreign businesses through its operation in Bahrain. Notably, the membership form provided by the USBBC directs applicants to send or wire their money directly to the U.S. Chamber of Commerce. The membership form also explicitly states that the foreign-owned firms are welcomed.
– Like the Chamber’s involvement in Bahrain, the U.S. Chamber of Commerce operates in India through a group called “U.S.-India Business Council” (USIBC), which has offices around the world but is headquartered in the U.S. Chamber of Commerce. Dozens of Indian businesses, including some of India’s largest corporations like the State Bank of India (state-run) and ICICI Bank, are members of the U.S. Chamber of Commerce through the USIBC. Annual membership dues range from $7,500 to $15,000 or more, and the money is given directly into the Chamber’s 501(c)(6) bank account. Like the USBBC, the USIBC generates well over $200,000 a year in dues for the U.S. Chamber of Commerce from foreign businesses. On the USIBC website, many of the groups lobbying goals advocate changing American policy to help businesses in India. Under the manufacturing policy goal, USIBC boasts that it “can play a helpful role in guiding U.S. companies to India, while supporting various policy initiatives that will enhance India’s reputation as a major manufacturing and investment hub.”
– Many foreign “AmChams” or Business Councils operate outside the direct sphere of the U.S. Chamber of Commerce but nonetheless send dues money back to the U.S. Chamber of Commerce. For instance, the American Chamber of Commerce in Egypt is a separate entity based in Cairo that raises hundreds of thousands of dollars from both Egyptian firms and American businesses. However, the American Chamber of Commerce in Egypt calls itself “the most active affiliates of the U.S. Chamber of Commerce in the” Middle East. Another foreign chamber, like the Abu Dhabi AmCham, which includes American firms and Esnaad, a subsidiary of the state-run Abu Dhabi National Oil Company, claims that it is a a “dues paying member of the U.S. Chamber of Commerce and part of the global network of American Chambers of Commerce.” In Russia, the relationship between the American Chamber of Commerce there and the U.S. Chamber of Commerce here is opaque. This might be because many of the dues-paying members of the American Chamber of Commerce in Russia are Russian state-run companies, like VTB Bank, and controlled by the Russian government. Asked by ThinkProgress if the Russian Chambers pay dues back to the U.S. Chamber of Commerce, Ksenia Forsheneva, the membership development manager at the American Chamber of Commerce in Russia, replied, “Unfortunately the information that you require is closed for the public.”
Let’s Get Our Priorities Straight
Focus on Helping the Middle Class, Not Tax Cuts for the RichSOURCE: AP/Marcio Jose Sanchez
A woman stocks up on bread at Sacred Heart Community Center in San Jose, CA, on September 16, 2010. The percentage of people living in poverty jumped for the third year in a row, reaching 14.3 percent in 2009. But all Washington wants to talk about is tax cuts for the rich.
Perhaps in some parallel universe there’s a world where it makes sense for the country’s main economic policy debate over the next two months to be the tax cuts for the rich. After all, they’ve been the ones least hurt by the recession and the only ones that benefited from the economic growth in the years prior to the Great Recession. I suppose it’s possible that there’s an alternate universe where giving them even more tax cuts is sanity. But in our reality it’s absolutely absurd.
The economic challenges we face are myriad and daunting. The unemployment rate is hovering near 10 percent. Our energy policy is stuck in the 20th century. We’ve got crumbling infrastructure all over the place. The budget is projected to remain badly out of balance. And perhaps most troubling, the middle class is barely keeping its head above water. Tax cuts for rich people address precisely none of these pressing issues. They would actually make matters worse in some cases.
Why, then, are we even discussing the possibility of cutting taxes for rich people? Is it because they’ve been hit particularly hard by the recession? Hardly. When the National Bureau of Economic Research announced recently that the Great Recession came to an end in June of last year that news must have come as quite a shock to the millions of Americans who are still out of work, working fewer hours for less pay, and struggling to make ends meet. But it probably didn’t surprise people at the top of the income ladder. They’ve been recovering quite nicely.
Recently released Census data confirm that the wealthy are back on track after suffering only minor setbacks. Incomes fell across the board from 2007, before the recession began, to 2008. Everyone took a hit, from the poorest quintile to the richest. But that’s where the shared pain ends. From 2008 to 2009 almost everyone’s income continued to fall except the rich. The richest 5 percent of Americans saw their average income rise last year by $1,800.
Not so for those in the middle. Median household income continued to slide from 2008 to 2009, falling by $335. In fact, the median household has lost almost $2,200 in annual income since the recession began. That is the largest two-year decline in at least 35 years and amounts to a drop of more than 4 percent.
Those at the very bottom are also falling further behind. Overall, the percentage of people living in poverty jumped for the third year in a row, reaching 14.3 percent in 2009. That’s higher than at any point in the last 15 years. The increase in poverty rates from 2008 to 2009 was the largest year-over-year percentage increase since 1980. And one out of every five children lived in poverty last year.
If that weren’t enough, the ranks of the extremely poor also swelled significantly. The percentage of people living below 50 percent of the federal poverty level rose to the highest point since the Census began keeping track.
It should come as no surprise, then, that income inequality is fast approaching record levels. The richest 5 percent of Americans claimed almost 22 percent of all income in 2009, and the top fifth took home fully half of the nation’s income. The poorest fifth, meanwhile, earned just 3.4 percent of all the income, and the share of national income going to the vast middle dipped as well. Income inequality in 2009 was higher than at any point since at least 1967, according to one measure.
All those facts and figures reinforce what most people already know: The middle class took this recession right on the chin while the rich suffered no more than a glancing blow. And yet somehow in Washington the talk is all about tax cuts for rich people.
The Bush tax cuts—which primarily benefited the wealthy—all expire at the end of this year. President Barack Obama wants to cut taxes for everyone making less than $250,000. That’s 98 percent of the people in the country. Conservatives refuse to go along with this plan unless they can also cut taxes for the richest 2 percent of Americans.
Keeping those high-end tax cuts in place would cost the federal government more than $800 billion over the next 10 years after including the costs of the added debt. More than 80 percent of the benefit will go to people making at least $1 million a year, and their average tax cut would be more than $100,000. That’s almost twice what the median American household makes in a year.
This is how absurd our national conversation has become. We’re actually fighting over whether we should borrow hundreds of billions of dollars and give that money to the only group of people in the country who are already back on track. Instead of focusing on a policy that would exclusively benefit those who make more than $250,000 a year we should be discussing how to get wages and middle-class incomes rising again, the best ways to bring people out of poverty, and what we can do to address the ever-widening disparities between the super-rich and everyone else. Our priorities are indeed skewed when the dominant argument over economic policy pertains to $100,000 tax cuts for millionaires while our middle class is barely treading water.
Michael Linden is the Associate Director for Tax and Budget Policy and Heather Boushey is a Senior Economist at American Progress.
More from CAP on the Bush tax cuts:
- Three Good Reasons to Let the High-End Bush Tax Cuts Disappear by Michael Linden and Michael Ettlinger
- Golden Years for the Gilded by Michael Linden
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America began the new millennium with optimism and confidence. Today, two recessions and two wars later, the optimism is weakened and the confidence is waning. U.S. military spending has risen to nearly half of the global total, but the U.S. share of global output is eroding steadily as other economies grow faster.
An assessment by the National Intelligence Council in November 2008 warned that the ongoing transfer of wealth from the U.S. and other Western nations to East Asia is “without precedent in modern history.” U.S. trade and budget deficits in this decade have also been unprecedented, with the federal government borrowing more than 40 cents of every dollar it spends.
In such circumstances, claims that America is the sole surviving superpower sound increasingly hollow. Experts can debate what role defense spending has played in this decline, but what is beyond dispute is Washington’s waning ability to sustain military outlays at current levels.
There are a number of near-term steps the Obama administration can take to reduce the burden of military spending, such as winding down the U.S. presence in Iraq and Afghanistan and cutting outlays on unneeded weapons. Defense Secretary Robert Gates estimates that cuts he made last year will reduce planned weapons outlays by $330 billion, and now he has launched a campaign to slash support costs.Get the best in Southern California opinion journalism delivered to your inbox with our Opinion L.A. newsletter. Sign up »
Force levels will need to be cut too, because the cost of military pay and benefits has risen to a point at which the affordability of the all-volunteer force is in doubt. This will provoke a bitter political debate, given the sacrifices U.S. troops have been asked to make in this decade. Yet with a $1.47-trillion federal deficit, the government is spending $4 billion it does not have each day, and our forces must shrink. This is particularly true because, as Gates has noted, after Iraq and Afghanistan, we will not do nation-building under fire again.
The big question for policymakers is not whether defense spending will be cut — that is inevitable — but how global security will be maintained as the U.S. role diminishes. Since World War II, the United States has played a central part in preventing wars and protecting vital areas such as the industrial centers of northeast Asia and the oilfields of the Middle East.
Now Washington must become more selective in its commitments, even as threats grow more diverse. It appears the only way this can be accomplished without encouraging aggression is to expect more of allies and friends. In other words, countries such as Germany, Japan and India must help fill the strategic vacuum created by America’s retreat.
The Obama administration does not concede that America is in retreat, but it has fashioned a National Security Strategy that is well suited to current trends. The strategy emphasizes the importance of allies and “newly emerging partners” in accomplishing shared defense goals, and commits the United States to helping partners do more for their own defense, especially in coping with terrorism and insurgencies.
This is a sensible approach given the fact that allies will usually have more “forward presence” overseas than U.S. forces can muster, and typically will understand the cultural context of local conflicts better. But there are some steps that Washington needs to take so that partners can take on roles now beyond America’s means.
For example, the Pentagon needs to build weapons that are affordable and appropriate for its partners. Nobody can afford the new $3-billion destroyer the Navy has developed — Gates canceled the program — but many countries can afford the faster, more agile Littoral Combat Ship. Similarly, the $150-million price tag on the Air Force’s twin-engine F-22 fighter is too high for allies, but if the single-engine F-35 can be fielded for less than half that cost, it will have major export potential.
The White House has already embarked on a series of initiatives to engage allies in more robust security roles while loosening the export restrictions that impeded arming them. These steps may have trade benefits for America, but their real significance is that America’s eroding economic might makes unilateralism too costly to be feasible. Washington needs to help overseas friends play a bigger security role so it can concentrate on rebuilding its economy.
Lawrence Korb is a defense analyst at the progressive Center for American Progress. Loren Thompson is a defense analyst at the conservative Lexington Institute.