Monday Wake Up Call – IRS Funding Edition, March 22, 2021

The Daily Escape:

Slot Canyon, Grand Staircase Escalante National Monument, UT – photo by chipotle42

Today we turn our attention to the IRS. David Sirota wrote in the Daily Poster that new IRS figures compiled by Syracuse University show that in the past eight years, there was a 72% drop in the number of IRS audits of people making more than $1 million.

Last year, 98% of individuals making more than $1 million didn’t face an audit. At a time when Americans face growing economic inequality, the IRS is letting billions of dollars in tax revenue slip through its fingers because budget and staffing cuts have left the agency incapable of effectively auditing the 637,212 millionaires now living in the US. It’s worth noting that the number of American millionaires has increased by 88% since 2012.

What’s more, the IRS audit focus has shifted from the wealthy to the poor. A large group of progressive organizations sent a letter to the Biden administration saying: (emphasis by Wrongo)

“Since 2011, audit rates for millionaires, who are disproportionately white, have dropped more than twice as much as for taxpayers claiming the (Earned Income Tax Credit), who are disproportionately people of color. Audit coverage is now the heaviest in many low-income majority-Black counties.”

A recent Treasury Department report concluded that at the IRS:

“…high-income taxpayers are generally not a collection priority, nor is there a strategy in place to address nonpayment by high-income taxpayers.”

As evidence, the report showed that the agency failed to recover more than 60% of the $4 billion in back taxes owed by those making more than $1.5 million.

At the same time, overall enforcement has been hobbled by draconian budget reductions that have resulted in 43% fewer IRS revenue agents and 26% percent fewer IRS criminal investigators in the last decade:

There’s also been a 51% drop in the number of audits of America’s largest corporations. Sirota says that in 2012, almost all of our corporate behemoths were audited. However, in 2020, only about 38% were audited.

There are two separate problems here. First, the IRS budget has been cut dramatically by Republicans. Between 2010 and 2018, the IRS’s budget was slashed by more than 20%, and its enforcement budget has been cut by 24%, according to the Center on Budget and Policy Priorities, leading to the substantial reduction in IRS agents shown above.

A July 2020 report from the Congressional Budget Office found that increasing funding for IRS enforcement by $40 billion would boost revenues by more than $100 billion over the next decade. From Sirota:

“To that end, Reps. Ro Khanna (D-CA) and Peter DeFazio (D-OR) — both Congressional Progressive Caucus members — have recently introduced separate bills that would boost the IRS’s enforcement budget and audit rates.”

Khanna’s legislation would increase IRS enforcement funding by $70 billion and require the agency to audit 95% of large corporations, 50% of individuals reporting more than $10 million of annual income, and 20% of individuals reporting more than $1 million of income. Sounds about right.

IRS referrals for criminal prosecution and Justice Department tax convictions have both hit an all-time low. The US is estimated to be losing roughly $600 billion/year in revenue from unpaid taxes, while wealthy taxpayers are evading or avoiding paying their fair share. Better enforcement will produce revenue and bring renewed respect for our legal system.

We must have more tax revenue, and while Rep. Khanna’s bill would go a long way toward making things right, we also must raise our corporate tax rates, and the IRS must reassess its audit priorities.

We can’t be auditing more poor people than millionaires.

Wake up America! It’s time to stop our largest corporations and our wealthiest individuals from skating out on their tax responsibilities. To help you wake up, listen to the Tedeschi Trucks Band performing  “The Sky is Crying” at the Royal Albert Hall. Performing at the Royal Albert seems to bring the best out of American groups. Here’s another great example:

Some prefer the Stevie Ray Vaughn version, but this is at least as good.

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New Relief Bill Rewards Businesses

The Daily Escape:

Hayden Valley, Yellowstone NP – December 2020 photo by Jack Bell

Politico reports that Congressional leaders are nearing a deal on Covid relief. The deal could be done by the time you read this.

The relief package is divided into two parts. The first bill, with a stated cost of $748 billion, funds the Paycheck Protection Program (PPP), along with $300 per week for unemployment benefits.

The second bill ties liability protections for companies demanded by Republicans to the Democrats’ demand for funding for state and local governments.

The big-ticket items in the first bill include one-time stimulus checks to individuals in the $600 to $700 range, an extension of federal unemployment benefits with an additional weekly amount of $300. There is $325 billion for small businesses, $257 billion for the PPP, some $ billions for vaccines, and to help schools open safely.

Delayed until the New Year is bill two, including money for state and local governments faced with laying off municipal workers, and liability protection for companies that put their employees in danger from the virus through inadequate safety measures. The items in the second bill are what have stalled negotiations for weeks.

Lee Fang of the Intercept reports that the draft of the first bill circulating on Capitol Hill contains several adjustments to the PPP, the centerpiece of the government’s earlier efforts to curb job loss stemming from the pandemic. One of the revisions is a radical change that would result in a major windfall for the highest-income Americans and large corporations. That provision allows businesses claiming expenses reimbursed by PPP forgivable loans, (already tax-free), to also be used as deductions when calculating taxable income.

In other words, the change would allow a corporation that claimed $1 million in PPP reimbursements to also deduct the same $1 million on its tax return, thereby reducing their taxable income by $1 million. Until now, IRS rules prohibited tax-free government grants and reimbursements from being used as deductions. The Intercept quotes Steven Rosenthal from the Tax Policy Center, who estimates that this PPP deduction provision could reduce the taxes of the highest-income taxpayers by at least $100 billion without benefiting workers or the unemployed.

This tax deduction provision technically applies to all PPP recipients, but few will be able to take the additional tax benefit. Wealthy business owners and large corporations claim the lion’s share of business expense deductions. This group would include wealthy doctors and financial consultants, and those who make over $1 million in yearly income.

This tax provision has been pushed by Rep Richard Neal, (D-MA), and Sen Chuck Grassley, (R-IA). There has been little pushback to these tax giveaways, reflecting a general consensus in Congress around the value of more business tax cuts. Lawmakers, including Senate Majority Leader Mitch McConnell, (R-KY), have described the PPP extension and expansion as an “uncontroversial” aspect of stimulus talks.

This should be pretty simple. If you get a PPP loan, and it is later forgiven, the expenses paid with the loan proceeds shouldn’t be deductible. The company didn’t pay taxes on the PPP loan cash proceeds and thus shouldn’t receive a deduction against taxable income for the expenses paid. That’s double-dipping.

The big idea behind PPP loan forgiveness was to help businesses retain employees and pay certain qualified expenses like rent and utilities, not to enrich employers.

Also buried in the bill is another bailout for US Airlines. They stand to get another $17 billion taxpayer-funded bailout if the first bill becomes law. From Wolf Richter:

“Democrats and Republicans may not agree on much of anything these days, but they both love to bail out airline shareholders and bondholders. And that’s what this is – dressed up as payroll protection and airline support program.”

The new airline bailout comes on top of what they received in the original stimulus bill: $25 billion in payroll support, an additional $25 billion in loans for passenger airlines, and over $10 billion in grants and loans for cargo airlines and aviation contractors.

Let’s remember that the top four airlines have burned their cash by repurchasing $45 billion of their shares since 2012. They don’t need more of our money, Chapter 11 bankruptcy works. Delta, American and United have previously restructured in bankruptcy court, and it worked fine. They know how to do that.

And let’s tell it like it is: If there wasn’t a majority of Republicans in the Senate, the people would get the checks and the unemployment relief they really need.

Win in Georgia!

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America Is OK With a Wealth Tax

The Daily Escape:

Navajo Trail, Bryce Canyon NP, UT – November 2019 photo by biochemistry_unicorn

Over the past year, progressives have made a wealth tax a central part of the policy discussions in the Democratic primary. Both Sens. Bernie Sanders and Elizabeth Warren have proposals to tax the wealth of billionaires to help pay for improvements to the social safety net and infrastructure.

Currently, the US mostly taxes individuals on the income earned from their jobs and investments. The wealth tax is different since it would tax assets like stocks, yachts, artworks, and vacation homes.

Critics of the wealth tax have made a variety of arguments against them. The most prominent that the US government couldn’t enforce them effectively. Consider this from Business Insider:

“Usually, progressives cast Europe as a model for the cradle-to-grave social benefits that nations like Norway provide because of steeper tax rates on richer citizens. But most…countries have ditched them [wealth taxes] over the last few decades.”

Twelve European countries had a wealth tax in 1990, but the number now stands at four: Spain, Switzerland, Norway, and Belgium, which just introduced a limited wealth tax of its own.

Emmanuel Saez, economist at the University of California, Berkeley, who has analyzed the Warren and Sanders wealth tax proposals, says the European wealth taxes failed because governments created many exemptions that undercut their ability to draw revenue:

“The wealth taxes in Europe have failed by and large….they didn’t raise that much revenue because of big exemptions for asset classes….”

Others argue that the super-rich already donate big amounts to charity. One of Saez’s co-authors, Gabriel Zucman, says that the annual giving of Bill Gates and Warren Buffett equates to ~3%–4% of their wealth, while the other top 20 billionaires’ giving equals ~0.3% of their wealth. Like a really tiny wealth tax. Here’s his chart:

Annual charitable giving of the top 20 richest Americans: $8.7 billion, equaling just three tenths of one percent of their wealth. For the top 400 richest Americans, their taxes paid = 1.5% of their wealth, while their charitable giving = 0.4% of their wealth.

But, the average American paid taxes equal to 5.5% of their wealth, while their charitable giving = 0.3% of their wealth. Joe Six-pack gave the same amount of his assets to charity as did the top 20 billionaires.

If Warren’s 6% wealth tax was enforced on the top 20 richest Americans above, they would pay $60 billion to support the social safety net.

Moreover, despite the nay-saying by the rich, surveys show that Warren’s 2% tax is broadly popular:

(This was an online survey of 2,672 adults conducted by the polling firm SurveyMonkey from Nov. 4 to Nov. 11)

The survey by the NYT and Survey Monkey shows that 75% of Democrats and more than half of Republicans say they approve of the idea of a 2% tax on wealth above $50 million. The proposal receives majority support among every major racial, educational and income group.

The majority of college-educated Republican men disapproved, with only 41.5% approving of it.

The NYT reports that the proposed wealth tax is even more popular than the Trump tax-cut enacted in 2017. Only 45% of Americans said the tax cut was a good move:

“The movement against the Trump tax cuts since then has been powered, oddly enough, by Republicans. They largely still back the law — by 76% over all, compared with 20% of Democrats — but that support has dropped six percentage points since April.”

The shift on the tax cut is highest among high-earning Republicans: Americans earning more than $150,000 a year are far more likely to favor a tax increase on the very wealthy than the Trump tax cuts.

America’s tax code is designed to allow massive fortunes to grow ever larger. Wealth is concentrating in a tiny segment of the population, as the middle class shrinks.

We see that even the most high-minded billionaires can’t even give money away faster than their piles of dough are growing. And when Democrats like Warren and Sanders suggest a way towards tax reform, the GOP and the conservative think-tanks condemn them as socialists who want to punish success.

Most Americans are fed up with a government and an economy that overwhelmingly benefit corporations and the rich at the expense of everyone else. A wealth tax can work if Congress doesn’t get rolled by lobbyists that demand loopholes for their clients.

Wrongo will have no trouble backing a candidate who supports a wealth tax. But, increasing the taxes on corporations and a financial transactions tax should come first.

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Sunday Cartoon Blogging – November 3, 2019

(Sorry for going dark, but we lost internet here at the Mansion of Wrong for two days. It’s back, but since it is supplied by Spectrum, it’s very slow, despite Wrongo paying for a premium pile of megabits.)

The WaPo reports:

“Smuggling gangs in Mexico have repeatedly sawed through new sections of President Trump’s border wall in recent months by using commercially available power tools, opening gaps large enough for people and drug loads to pass through…”

Apparently, they’re using a battery-powered Sawzall, like this one that you can order from Home Depot:

It can cut through the bars of steel and concrete in a few minutes, if equipped with specialty blades made with diamond grit. The blades sell for less than $15. The Trump administration has so far completed 76 miles of the new barriers that are now being breached by Mexican smugglers. These are the sections of wall that Trump boasts are “virtually impenetrable”. He has called them the “Rolls-Royce” of walls that border-crossers cannot get over, under or through.

Who knew that for $100, and a few $15 blades, you could defeat the wall that will eventually cost us $10 billion?? On to cartoons.

Al-Baghdadi was killed. Trump said he died like a dog:

Republicans are now trying to smear a military hero to protect a draft dodger. Trump equates dogs with cowards, while an actual military dog served heroically, without claiming Paw Spurs.

Trump says he’s moving from NY to FL. New Yorkers cheer:

Dems are placing way too much faith in the process:

It is looking like the Boeing 737 MAX should never fly again:

Signs of the season won’t go away:

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Monday Wake Up Call – April 1, 2019

The Daily Escape:

Racka Sheep, Hungary, April 2017 – photo by Laszlo Balogh.

The Trump legacy keeps on giving. Forbes reports that when Trump’s tax bill passed in late 2017, it included:

“A new tax on litigation settlements: no deduction for legal fees…..That means many plaintiffs must pay taxes even on monies their attorneys collect. Of course, the attorneys must also pay tax on the same money.”

Robert W. Wood, a Forbes contributing writer who follows taxes, cites the case of Edwin Hardeman who won $80.5 million in a suit against Monsanto’s Roundup. From Forbes:

“Hardeman was awarded a bit over $5 million in compensatory damages, and $75M in punitive damages. The combined contingent fees and costs Mr. Hardeman pays his attorneys might total as much as 50%. If so, the plaintiff would get to keep half, or $2.5 million of the $5 million compensatory award. Since it is for his…non-Hodgkin’s lymphoma, that part for physical injuries should not be taxed. Then, of the $75 million punitive award, $37.5 million goes to legal fees and costs, and $37.5 million to Hardeman. So before taxes, the plaintiff’s take home is $40 million.”

But because of Trump’s new math, Hardeman’s $75 million punitive damages award is fully taxable, with no deduction for the fees he pays to his lawyer. Between federal taxes of 37% and California taxes of about 13.3%, Hardeman could lose about 50% to the IRS and California Franchise Tax Board. He would still owe another $37.5 million to his lawyers, so his after-tax take from an $80 million verdict only $2.5 million.

A $2.5 million award isn’t chump change, but this is another effort by corporations and Republicans to discourage law suits seeking punitive damages by plaintiffs. Notably, compensatory damages for physical injuries or physical sickness are still tax-free, but not punitive damages.

Doesn’t paying taxes on money you don’t receive seem un-American? The reach of corporate interests into our laws cannot be overstated. It will take a generation to reverse all of the inroads corporate lobbyists have made into our tax laws alone.

So, wake up America! It’s time to change capitalism so that it works for the people, not just for the owners and managers of corporate America. Bill Maher had a great discussion on his show “Real Time“. He echoed FDR’s “Four Freedoms” while commenting on how countries with a higher socialism-to-capitalism mix rank as happier than the US in the recent World Happiness Report. Maher says;

“Happiness isn’t only about what you have. It’s also about what you don’t have to worry about,”

Maher recommends rebranding Capitalism Reform as “Capitalism Plus.” Because, “It’s a plus when you get sick and you can focus on getting better instead of not going broke“. Or, ending up sleeping under an overpass.

Maher ends with:

“Does pure unbridled capitalism work? I guess that depends whether you’re on the board of Boeing, or onboard a Boeing.”

Those who read the Wrongologist in email can view the video here.

 

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It’s Time to Raise Taxes

The Daily Escape:

Autumn in Hunza Altit Valley Pakistan – 2017 photo by Nasr Rahman. This shows that beauty can exist in very difficult places.

In 1785, Thomas Jefferson called for a geometric progression in taxes on assets of property holders as a way of lessening inequality. People with more assets would pay much higher taxes. Today, we’re still in search of policies that will do the trick. From The Fiscal Times:

Democratic Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez have sparked intense debate this month by proposing higher taxes on the rich, with Warren calling for a wealth tax and Ocasio-Cortez proposing a 70% top marginal tax rate.

But, Senate Republicans are moving in the opposite direction. Three GOP senators reintroduced legislation to permanently repeal the federal estate tax. The 2017 GOP tax overhaul has already reduced the number of estates subject to the tax by roughly doubling the value of assets that can be excluded from the tax. For 2019, this tax will only be paid by 1,700 families, but that’s all too much for Republicans.

Axios just reported on what Americans think about taxes:

Polling has found tax increases on the wealthy to be popular. A survey earlier this month by The Hill and HarrisX found that 59% of registered voters, including 45% of Republicans, support increasing the top income tax bracket to 70%. A Fox News poll released last week found that 70% of voters favor tax increases on families making over $10 million a year and 65% favor tax hikes on incomes over $1 million annually. Paying taxes is a complicated and controversial issue. What is not controversial is the need for people to take advantage of tax services that can help ensure they pay the right tax and thus appease the ever-lurking IRS. Going to http://daveburton.nyc/tax-services-nyc/ will provide more detail on this.

Those numbers suggest that a complete repeal of the estate tax might be about as popular as the polar vortex.

This shows how vast the gulf is between Republicans and Democrats on taxes. A poll by Axios, along with SurveyMonkey, ironically presented at Davos, showed that 70% of Americans think the economic system is skewed toward the wealthy and the government should do more to fix it. It further showed respondents are ready to vote for a 2020 candidate who agrees.

  • 58% of people surveyed say that “unfairness in the economic system that favors the wealthy” is a bigger problem than “over-regulation of the free market that interferes with growth and prosperity
  • Among 18-24 year-olds, that gap is a chasm: 76% to 21%
  • Among those 65 and older, it’s a very narrow 51% to 46%
  • 89% of Democrats agree
  • 68% of independents agree
  • But 77% of Republicans say over-regulation of the free market is a bigger problem than economic unfairness
  • A huge majority of Democrats (90%) said they would be excited to vote for a candidate who promises to reform the economic system, with 71% of independents saying the same.

(SurveyMonkey’s online poll was conducted January 16 through 18, 2019 among a national sample of 2,277 adults.)

After WWII, America had very high marginal tax rates, and one result was corporate income was reinvested in the company, rather than given to top management or shareholders. Why give 70% of every dollar to the government?

Back then corporations, in exchange for limited liability, assumed they had fiduciary duties to the public and to their employees as well as shareholders. But the Right got behind the doctrine that a corporation’s only duty was to their shareholders. CEO’s became significant shareholders through stock options.

Then, Reagan and Bush lowered taxes on corporate and personal income, and dividends.

Our basic political issue in America has become: “Does the economy exist to serve the nation, or does the nation exist to serve the economy?”

Our affirmative vote must be for the economy to serve the nation. Over the past 40 years, we have reduced taxes for high earners and corporations. We’ve added loopholes that subsidize corporations, but our need for infrastructure spending hasn’t declined, and our military spending has grown dramatically.

Over the past forty years, the share of income taxes paid by corporations has declined. It is now only 9% of US government tax revenues. It was about 24% in 1960.

We’ve financed the tax cuts for high earners and corporations with ever growing budget deficits. The golden age for these policies must end now.

We need to go back to the days of socially responsible capitalism, not the predatory capitalism we have today. High marginal income tax rates will help. In addition, taxing dividends at the same as ordinary income is a good idea.

Let’s raise the capital gains tax above its current 20% rate.

Let’s find a Constitutional way to tax wealth as Elizabeth Warren suggests. Add a very small transaction tax on sales of stock on all public markets.

It’s time to move past the politics of “What can America do about inequality without corporations and rich people actually giving anything up?

This isn’t an anti-corporate, anti-wealth assault, it is a necessary corrective to bad tax policy from the 1970s to today.

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Tax Abatements Are Killing School Budgets

The Daily Escape:

Egmont National Park, NZ – photo by vicarious_NZ

A new report shows that US public schools in 28 states lost at least $1.8 billion in tax revenues last year as a result of tax incentives granted to corporations. The study analyzed the financial reports of 5,600 of the nation’s 13,500 independent public school districts.

Good Jobs First examined the first full year of reporting under a new accounting standard for school districts, adopted by the Governmental Accounting Standards Board (GASB), the body that sets accounting rules for all states and most localities. The new rule, GASB Statement No. 77 on Tax Abatement Disclosures, requires most state and local governments to report annually on the amount of revenue they’ve lost to corporate tax abatements.

This is extremely important, since most local schools are very dependent on revenue from property taxes, but they rarely have influence over corporate tax abatements granted by their towns, and/or the cities or counties where they are located.

And local voters have had no way to see how much they are forced to pay in additional taxes that were lost to enrich the pockets of corporate employers.

Good Jobs found that the 10 most affected states could have hired more than 28,000 new teachers if they were able to use the lost revenues. Or, they could have avoided higher home property taxes, or provided their teachers with better resources, or higher pay.

States and cities have long used abatements and other tax incentives to lure companies, or to keep them from leaving, and/or to encourage them to expand locally. Often, those companies make their choice of location based on the quality of local schools and colleges.

These abatement deals are made by local politicians and are meant to boost local economic development. Their proponents say the lost tax revenue is worth it, because they grow the local economy. But it is difficult to know whether the benefits outweigh the burdens.

And until GASB 77, it has been impossible to see just how much a school system may have lost because of a company’s tax break. The new rule is especially helpful in understanding local schools finances, because it requires the reporting of revenue losses even if they are suffered passively by the school system as the result of decisions made by another body of government.

Of the five districts that lost the most, three are in Louisiana. Together, they lost more than $158 million, or $2,500 for each student enrolled. The School District of Philadelphia, which only last year regained local control from the state after climbing out of a deep fiscal crisis, lost the second most revenue at $62 million.

Overall, nearly 250 school districts lost at least $1 million each, and in four districts, tax abatements reduced classroom resources by more than $50 million.

But most school districts have not yet complied with Rule 77, which was implemented in 2015. Good Jobs First estimates that another $500 million of subsidies and abatements are currently unreported.

Most of us believe that our governments are supposed to govern in the interests of the “general welfare,” that when voters put people in positions of power, based on the legitimacy of our electoral process, is the limit of our responsibility as voters.

We accept that somebody has to say what the rules are, and then enforce them.

But in our neoliberal economic times, voters have to remember that our governments often act as wholly owned subsidiaries of the 1%. It takes suspension of belief to accept that our republic, ruled as it is by an oligarchy, is working for the general welfare of all of our citizens.

Why do we think that, our “governments”, all of which are subject to capture and ownership by the few, are going to somehow provide decency, comity, or fairness to all of us?

We need to abandon the article of faith that the free market, one without government oversight, promotes the best economic outcome for all of us.

Today’s inequality says the opposite.

We need a new vision of the role of government. But it isn’t really a “new” vision. It is simply a return to insisting on the “promotion of the General Welfare for all” as the paramount object of government.

Here’s another thought from Gordon Wood, in his book, Creation of the American Republic:

In a republic each individual gives up all private interest that is not consistent with the general good, the interest of the whole body. For the republican patriots of 1776 the commonweal was all encompassing—a transcendent object with a unique moral worth that made partial considerations fade into insignificance.

The last outcome that American revolutionaries wanted was to be ruled by oligarchs. But, here we are.

We need to reform our capitalism.

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Will Dems Counter the GOP’s Plan to Cut Social Security?

The Daily Escape:

Fall in Paradise Valley, Yellowstone NP – photo by Annie Griffiths

The mid-terms are coming, and we are having difficulty focusing on some important issues, because America has a short attention span, and we’ve been Kavanaugh ‘ed and Khashoggi ‘ed so much lately.

Two issues that are linked are the amazing deficit caused by the Trump tax cuts, and the moves being plotted by Mitch McConnell, Paul Ryan and others to cut Medicare, Medicaid and Social Security.

Let’s start with tax revenues. It was clear to critics that the 2017 GOP tax cut was going to quickly increase the budget deficit and add $ trillions of the national debt, and here it is:

The federal deficit grew by nearly $800 billion over the first fiscal year of Trump’s presidency, during which the Republican Congress passed a tax cut targeted mostly to corporations and the wealthy, which is projected to add more than $1 trillion to the deficit over the next 10 years.

And it didn’t take long for Republicans to insist that the deficits were actually caused by Social Security, Medicare, and Medicaid, not their tax cuts for corporations and the wealthy. From Vox:

Fresh off the news that the deficit is increasing under President Donald Trump, Senate Majority Leader Mitch McConnell told Bloomberg News that Congress should target Social Security and Medicare for cuts to address the growing federal debt.

The White House and GOP leaders promised America that the tax cuts would pay for themselves, but they haven’t. The growing federal deficit hasn’t caused Republican leaders to reconsider their tax policy. Instead, they argue that entitlement reform — Republican-speak for cuts to social safety net programs — is what’s really needed to address the federal deficit. From McConnell’s interview with Bloomberg this week:

It’s disappointing, but it’s not a Republican problem….It’s a bipartisan problem: unwillingness to address the real drivers of the debt by doing anything to adjust those programs to the demographics of America in the future.

Republicans have opposed Social Security and Medicare since they were created. But because these programs enjoy overwhelming support from the American people, they would not normally talk about their plans for benefit cuts three weeks before an election.

But, they are doing just that.

This is a real issue, since those programs make up a large share of federal spending: Medicare was 15% of the federal budget in 2017, and it’s projected to grow to 18% by 2028. Social Security is a bigger chunk of the budget (24% in 2016), and our aging population will put a greater strain on the program. Here is the budget breakdown:

Democrats want to expand, not cut these programs. Republicans may see their last, best chance to cut them slipping away with the mid-terms. They seem determined not to let that happen, so this will be a big issue in the lame duck sessions. The GOP will use the cost of their tax giveaways as the excuse to do what they have wanted to do to social programs all along.

If the GOP is talking like this before the mid-terms, imagine the carnage if they keep control of both Houses of Congress!

People who want to defend Social Security and Medicare better work hard to get out the vote in November. And the latest news about the House isn’t encouraging. Larry Sabato’s Crystal Ball reports that Democrats aren’t there yet:

A race-by-race analysis of Democratic House targets shows the party is close to winning the majority, but they do not have it put away, in our judgment, with Election Day less than three weeks away.

Barring a big, positive late change in the political environment in favor of Republicans, the bare minimum for Democratic House gains is in the mid-to-high teens. The needed 23-seat net gain is not that far beyond that and there are many different paths Democrats can take to achieve it.

He says Dems can count on 18, but need 23…

Assuming that the Dems won’t go along with the GOP’s planned social spending cuts, Republicans will try to blame Nancy Pelosi, Chuck Schumer and the Democrats, assuming their cuts to social programs fail.

Republicans will say “Democrats plan to raise taxes on tens of millions of middle-class Americans” to cut the deficit, and that’s true. But, it would be just a part of the package of fiscal moves to cut the deficit, with the primary focus on clawing back some of the massive Republican corporate tax cuts.

Democrats need to talk this up in the next three weeks to counter the GOP’s clearly articulated game plan.

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Republicans Vote Against Funding Election Security

The Daily Escape:

Palacio del Segundo Cabo, Havana Cuba. Built in 1772, it was the royal post office. 2018 photo by Nestor Marti for Smithsonian Magazine

Are Republicans committed to free and fair elections? Maybe not. Republicans in the Senate had a chance to say “yes” on August 1st, when an amendment adding funding for election security failed to pass.

With all the cross talk about election meddling, you could be forgiven if you think that our very democracy may be under threat. But when given a chance to take a concrete step, adding $250 million to help confront this challenge, the Republican majority in the Senate said no. From The Hill:

Senators voted 50-47 against adding an amendment from Sen. Patrick Leahy (D-VT) that would have provided the funding. Sixty votes were needed to include the proposal in the appropriations legislation under Senate rules. Sen. Bob Corker (R-TN) was the only GOP senator who voted in support of the amendment to an appropriations measure. The proposal, spearheaded by Leahy, would have provided $250 million for state election security grants.

How is this a partisan issue? Doesn’t every American want to protect our electoral system? Republicans argued that more funding wasn’t needed, that states haven’t yet spent the $380 million previously approved by Congress. Sen. James Lankford (R-OK) said it was “far too early” for the Senate to sign off on more money:

We don’t know how the first $380 million has even been spent, and the intelligence committee did an extensive research on how much money was needed and the $380 million amount was what was needed for the moment.

Sounds reasonable. If only there were some sort of accounting system that allowed you to find out how much was spent, and what the remaining need might be. And yet, not knowing where the Pentagon spends its money hasn’t stopped Congress from giving them even more than they asked for.

Surprising what expenditures cause the GOP to develop fiscal responsibility. They just gave $12 billion to bailout America’s farmers. They happily voted to create a $1 trillion deficit with their corporate tax cuts. Trump wants to add another $100 billion in tax cuts, because more has to be better.

But with an expenditure designed to head off a possible vote heist, that’s when America needs more fiscal accountability.

We’ve learned that Russian cyber warriors already have targeted the re-election campaign of Sen. Claire McCaskill, (D-MO), and that Facebook closed 32 accounts because they exhibited behavior similar to that of accounts belonging to Russian hackers. Facebook said that more than 290,000 accounts followed at least one of the fake pages.

Our electoral legitimacy crisis is real. We are witnessing a slow-moving insurrection driven by the Republicans, the Citizens United decision, Koch operatives, Evangelicals, Russian cyber hacks, along with determined vote suppression by Republican state legislatures. All are working to make your vote less valuable. Republicans have been trying for years to destroy the value of your vote with voter suppression and gerrymandering.

If the Russians want to help them, the GOP seems to be OK with that, too.

From Charlie Pierce: (emphasis by Wrongo)

The only reason to vote against this bill is because you don’t want the money spent to confront the crisis. States can’t do this alone—and too many of them are controlled by people who don’t want the job in the first place….The idea that we’re nickel-and-diming this particular problem as what can only be called an anti-democratic epidemic rages across the land is so preposterous as to beggar belief. We are febrile and weak as a democratic republic. Too many people want to keep us that way.

The only thing that can save us is TURN-OUT this fall.

Kiss our democracy good-bye if you stay home!

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Monday Wake Up Call – April 16, 2018

The Daily Escape:

Dumbo, NYC – August 2017 photo by Kelly Kopp

In Republican-land, it’s not as if we don’t have plenty of awful things to process. And, just when you think that it can’t be coarser, or darker, it is! Last week, the Republican governor of Kentucky, Matt Bevin, vetoed the state budget, tax reform, and pension reform bills. Bevin scrapped all three bills in their entirety because he wanted significantly deeper budget cuts, especially to education and infrastructure. He sent the bills back, and announced that unless his cuts were passed, he would call a special session and keep it open until he got his way.

But, the day before Kentucky’s state legislature overrode all three vetoes, Bevin, who has opposed Kentucky teachers’ rallies for pension protection and public education funding since the rallies started, told reporters this:

I guarantee you somewhere in Kentucky today a child was sexually assaulted that was left at home because there was nobody there to watch them….I guarantee you somewhere today, a child was physically harmed or ingested poison because they were home alone because a single parent didn’t have enough money to take care of them.

Is this state-of-the-art 2018 Republican messaging? A Republican governor is saying children are safer in the care of government workers than with their own families. If Bevin is correct, summer vacation must be a season of child carnage in Kentucky. Maybe Kentucky schools should be open 24/7.

Bevin subsequently “apologized” to those who may have been offended.

A larger question: What will it take to eliminate the societal myth that teachers are co-parents? Teachers have huge responsibilities for the children they teach, and most live up to this, but they’re not the kids’ parents. They’re not equipped to co-parent.

Most towns fail to fully equip them to be educators, much less co-parents. And we couldn’t (and shouldn’t) pay them enough to assume that responsibility.

Bevin’s comments are unusual and despicable, but other politicians talk about teachers in similar ways. Consider that Oklahoma’s Republican governor Mary Fallin told CBS News that teachers striking for a salary increase are like “a teenager wanting a better car”.

Newsweek reported that Fallin also suggested that the anti-fascist group Antifa was involved in the ongoing teachers’ protests, claiming it was among the “outside groups” that were demonstrating alongside educators. There was no evidence that Antifa was anywhere near the teachers who were demonstrating.

Governors Fallin and Bevan had a golden opportunity to demonstrate their commitment to educating the children of their states. They could have made it clear that education would be a priority for as long as they remained governors.

But like most Republicans, they feel tax cuts are more important than kids. And in the typically arrogant and dismissive tone Republicans tend to assume, they decided to belittle teachers who are demanding they be fairly compensated for the important work they do.

Fully funding education is a no-win situation for Republicans. They don’t want to fund education because they know that ultimately, it works against their best interests. Their intransigence means they’re facing an angry, empowered, and unified group even in red states that have weak unions. The teachers now fully understand that they have political power, and they intend to exercise it.

Teachers don’t take the job expecting to get rich, but they’re certainly within their rights to expect fair compensation for their work. They’re also right to expect each state to adequately fund public education.

So, it’s time for Republicans to wake up! There really could be a blue wave in the voting booth this fall if red state politicians fail to support public education, despite whatever spew Betsy DeVos is spraying this month. To help them wake up, here is “High School Never Ends” by Bowling For Soup, from their 2006 album, “The Great Burrito Extortion Case”:

Sample Lyrics:

The whole damned world is just as obsessed
With who’s the best dressed and who’s having sex
Who’s got the money, who gets the honeys
Who’s kinda cute and who’s just a mess

And I still don’t have the right look
And I still have the same three friends
And I’m pretty much the same as I was back then
High school never ends
High school never ends
High school never ends
And here we go again

Those who read the Wrongologist in email can view the video here.

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