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When I participated in my first budget battle as a new member of the California Assembly back in the late 1990s, I was admonished that the budget isn't just a collection of numbers. It is a moral statement of our values as a people and a community. The budgets proposed by the Republicans -- both in California and in Washington, D.C. -- clearly show that today's Republican Party values millionaires over working families and Big Oil over seniors.

In California, we have not been able to extract a single Republican vote to extend the current tax rates necessary to protect our schools and create infrastructure to generate jobs. In Congress, the Republicans have gone so far as to adopt a budget that would end Medicare as we know it, turning it into a voucher or coupon program.

This the wrong direction for medical care because it would force seniors to fend for themselves on the private insurance market and continually pay more for their health care costs. The Republicans have yet to explain how they plan to force insurance companies to cover seniors, an age group that is not profitable to insure. How will they insure these people? Will insurance companies continue to increase premiums across the board, as they are doing now? Of course they will. That's why the Medicare system was created in the first place -- because seniors were the most likely to be uninsured, only 14 percent having medical coverage when the program started. While the Medicare system needs reforms to control costs, the answer is not to force our seniors to navigate a private insurance market that will do everything it can to withhold coverage and services. Reducing access and affordability during life's most difficult moments is morally wrong and not the American way of caring for its vulnerable and deserving citizens.

The same Republican budget would extend tax breaks for millionaires and billionaires and continue unnecessary subsidies for Big Oil, at a time of record profits and high prices at the pump. So here we are: According to the Congressional Budget Office, the Republican plan would have your grandparents pay an additional $6,000 out of pocket every year to cover their medical bills so that the Warren Buffets of the world can receive an additional $200,000 tax break and, at the same time, give Big Oil nearly $8 billion a year in subsidies while they continue to make record profits. It begs the question: What exactly do these Republicans value?

Not only is this plan bad for the American people, Americans do not want it. The Republicans in our legislatures are turning a deaf ear to the fact that 84 percent of Americans oppose their plan to privatize Medicare and reduce benefits and 74 percent support eliminating tax breaks for the oil and gas industry. A majority of Americans support eliminating tax breaks for the wealthy. Even close to 60 percent of Independents support eliminating tax cuts for Americans making over $250,000 a year.

There is a better plan, one that will eliminate the deficit and create a surplus by 2021, contrary to the Republican plan that continues to blow holes in the current deficit. The "People's Budget" advanced by the Congressional Progressive Caucus doesn't attempt to balance the budget on the backs of the middle class, children and seniors, the most vulnerable among us. It would get our fiscal house in order by eliminating tax breaks for millionaires and billionaires and make sure they pay their fair share. It would close tax loopholes so that well-paid accountants can't reduce the tax obligations of the wealthy and big corporations to zero. It would end the wars in Iraq and Afghanistan, finally bringing our troops home and stop the expenditures of billions of dollars a day in other countries when we need to invest right here at home. It would enact a comprehensive jobs program to put America back to work so there are more taxpayers paying into the Treasury and fewer Americans dependent on the social safety net. It would enact a public health insurance option that will create more competition with private insurance companies and reduce premiums for all Americans. That is the direction we should be taking -- giving more to the people and less to billionaires and Big Oil. It is a responsible approach that will bring hope, opportunity, dignity and fairness back to our public policy. We can do this and we must if we want to ensure that we really are committed to the future and the American Dream.

This appeared in the Santa Barbara News-Press, May 8, 2011


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From Sacramento Bee's Capital Alert: Steinberg considers cuts targeting GOP districts,
Senate President Pro Tem Darrell Steinberg today said he is willing to consider calls to target GOP districts with steeper cuts if legislative Republicans will not vote for taxes or to put taxes on a statewide ballot as part of a budget solution. ... The Sacramento Democrat said he thinks a targeted-cuts scenario like the one state Treasurer Bill Lockyer laid out in an interview with the Bay Area News Group-East Bay's editorial board comes down to "basic fairness." "You don't want to pay for government, well then, you get less of it," he said.
This is an interesting approach. They say this is what their constituents demand, so let them get what they want!

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In case you wondered where your federal tax dollars go, Your 2010 Federal Taxpayer Receipt | The White House offers a breakdown.

National Defense 26.3% (Note that Veterans funding is broken out separately. I combine them in the chart.)
Health Care 24.3%
Job and Family Security 21.9%
Education and Job Training 4.8%
Veterans Benefits 4.1%
Natural Resources, Energy and Environment 2.1%
International Affairs 1.7%
Science, Space, and Technology Programs 1.2%
Immigration, Law Enforcement and Administration of Justice 2.0%
Agriculture 0.8%
Community, Area, and Regional Development 0.5%
Response to Natural Disasters 0.4%
Additional Government Programs 2.4%
Net Interest 7.4% (Note that they use net, which subtracts interest received, instead if how much we pay out on the Reagan/Bush debt, which is approx twice as much.)

Social Security is separate and self-funded.

If you want to know even more, the siteWhere%20taxes%20go.jpg

To fix the federal budget deficit:

1) Fix the hole in revenue by putting top tax rates back to where they were before Reagan.
2) Cut military spending. We spend more than all other countries combined.
3) Fix the health care cost problem. We spend much more per person than other countries. You know why.
4) Much of that big "Job and Family Security" slice goes away if you create jobs.

Will any conservative sites link to this at the White House website? Fat chance. Conservatives depend on people remaining ignorant of where tax dollars are actually spent.


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Are We "Broke"?

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The California Republican Party issued a statement today following President Obama's speech on deficit reduction, saying California and America are out of money.  The statement reads,

"President Obama and Jerry Brown are two of a kind. Rather than accept the economic reality that Americans do not have the money to bail out government anymore, they continue to push for higher taxes. Long before today, a President candidly told us that we didn't get into budgetary trouble because we taxed too little or spent too little. 

 "Rather than attempt to tax our way out of deficit, a economic policy that has never worked, the President should provide real budget reform that will have a meaningful impact on peoples lives, bring America back from the brink and restore confidence in our future."

In fact there is much more money in California and America today than in the past, except now it is largely going to a very few already-wealthy people.  In California there are people who could write a check to pay off our entire state deficit themselves.  There is even one Californian who could pay off the deficit and have $13 billion left over!  So when they say "Americans do not have the money," they mean something else.

We're all in this together. And that means we all have to pitch in to get us out of the mess that the tax-cutters put us in.  I'm not suggesting that we get it all from one person, but I am suggesting that it is time for the already-wealthy to start pitching in a bit more.

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IS IT TIME TO TRY ANOTHER APPROACH?

You've got to give Governor Brown major kudos for his patience and tenacity in trying to make a deal with the Legislature's Republicans. With the state facing a game-changing $26B budget gap, after already reducing general fund spending over the past several years by an estimated $14B, give or take a few billion, the state is at a precipice. Are we going to face the future with great ambition and vision or are we going to fall off a cliff and perhaps never recover our role in the nation and world as the place that "invents the future"? The Democrats have already agreed to a balanced approach and made an additional $12-14B in cuts to close the gap. But where's the rest going to come from? If we want to decimate the state, then the balance will be cuts as well. Say good-bye to quality education-at any level; care for the neediest Californians; public safety; adequate police and fire-services when man-made or natural crisis appears; maintaining and repairing our infrastructure--roads, bridges, sewers; assuring clean air and water and all the other services and programs we take for granted in a civilized world. The list is long and deep. But the Republicans today don't care--in fact, that don't want government to succeed and some are brazen enough to admit it.

Let's face it: Today's Republican "leaders" in the legislature bear no resemblance to those who preceded them and this "new breed" is committed to dismantling government-sponsored efforts, most of which help the poor and middle class. The wealthy continue to accumulate vast amounts of money and the rest of us continue to suffer as a result. While there may be a few of these "leaders" who realize that politics is the art of compromise, they're under so much pressure and, frankly, so spineless in the face of that pressure, that they're just not willing or able to make a deal. Governor Brown is desperately trying to make a deal and put the state in a position so it can recover and once again prosper. But with a 2/3 requirement to do anything meaningful in this state--like raise taxes or put a measure on the ballot without the tedious and time-consuming signature gathering process, Brown can't and won't win. He's got to be at the point where he realizes that he can't work with these people. For those of us who believe that government plays an important and integral role in making society work, we can only hope that the Governor won't, out of desperation, capitulate to the unreasonable demands being put forth by the few Republicans who are taking on the "good-cop" role with the other Republicans as the "bad cop." Demands like a permanent "hard" spending cap is and must be a non-starter, for example. It's simply bad for the future of this state. Of course, the "good cops" continue to put new and different demands on the table---up to 53 at last count, which would cause anyone to pull out his or her hair, so it's a good thing Jerry doesn't have to deal with that problem.

But what Jerry Brown is also dealing with is the fact that after a decade or more of Republican sound-bites saying that we don't have a revenue problem, we have a spending problem, the public has drunk that kool-aid. Of course, part of the blame falls on Democrats who haven't had an equally as effective and cute sound-bite in response. Instead, they go into great detail about the various nuances and responsibilities of government, the complexities of budgets, etc. It's enough to make one's eyes glaze over---and they do.

The perception is that government is too big and too bloated. Unfortunately, the public also notes that the Democrats have been claiming for years that the sky is falling but it never has----Of course, that's because we have borrowed enormous amounts of money to keep the sky up. Unfortunately, we're about the pay the piper and that may be where we might have to go before the public steps up.

Hopefully Governor Brown will look for another approach. He is very smart, creative and determined, but right now the numbers and the public aren't supportive of the obvious options and I think he's stuck. Of course, one should never underestimate Jerry Brown, but right now the right-wing anti-government ideologues who want to destroy public education and infrastructure so they can privatize the state are winning this battle.


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In 1983 NY hotel-chain-owning billionaire Leona Helmsley said, "We don't pay taxes. Only the little people pay taxes..." As our country migrates from democracy to plutocracy, this more and more appears to be official policy. Again and again we see tax cuts for the wealthy few, tax breaks and subsidies for the big corporations that operate as fronts for those wealthy few, and budget cuts for the things We, the People (government) do to empower and protect each other. Just a few weeks ago we watched as an extension of the Bush tax cuts and a huge cut in the estate tax rate was pushed through. Now we watch as the discussion turns to cuts in Social Security and the rest of the so-called "safety net."

Another indicator of plutocracy (government of, by and for the wealthy) is impunity for those at the top. Leona Helmsley actually went to jail for tax evasion. Even as recently as the early-90s Savings and Loan Crisis our government investigated, prosecuted and jailed more than a thousand bad actors for fraud and other crimes. This time, well, ... not so much. Well ... actually not at all. Times have changed. Don't look back. Deal with it. Suck it up. Let's all get on the same team and keep this ball moving forward down the field at the end of the day. Whatever. Hey, look over there!

Today's Plutocracy Indicator

From the NY Times, G.E.'s Strategies Let It Avoid Taxes Altogether

The company reported worldwide profits of $14.2 billion, and said $5.1 billion of the total came from its operations in the United States.

Its American tax bill? None. In fact, G.E. claimed a tax benefit of $3.2 billion.

So not only did GE, the highly-profitable recipient of federal contracts and bailout money, not pay taxes, we paid them $3.2 billion!

Revolving Door Writes The Loopholes

How does GE accomplish this? By taking advantage of the "revolving door" where people move back-and-forth from government agencies to the corporations those agencies are supposed to oversee. From the NY Times story,

Its extraordinary success is based on an aggressive strategy that mixes fierce lobbying for tax breaks and innovative accounting that enables it to concentrate its profits offshore. G.E.'s giant tax department, led by a bow-tied former Treasury official named John Samuels, is often referred to as the world's best tax law firm. Indeed, the company's slogan "Imagination at Work" fits this department well. The team includes former officials not just from the Treasury, but also from the I.R.S. and virtually all the tax-writing committees in Congress.

While Congressional staffers they write the loopholes into the laws. Then they go to their reward at corporate headquarters for very high pay. Then they go work in the agencies to make sure the rulings go their way. They then go collect again. It is a lucrative game. They're the winners -- they call themselves "producers." We're the losers -- they call us ... "losers."

Who Really Benefits?

The use of the general term "corporations" to describe the beneficiaries of these policies is really a smokescreen that masks the fact that really a very few people are benefiting. Yesterday's post, Lobbyists Admit Corporate Tax "Holiday" Didn't Work, But Demand It Again, pointed out that it is a very few actual people that we are really talking about here,

Corporate wealth is really just personal wealth, held at arms length from the person to mask what is going on. The wealthiest 1% own 50.9% of all stocks, bonds, and mutual fund assets. The wealthiest 10 percent own more than 90 percent. The bulk of us own less than 1 percent. When you hear about "corporate" holdings, think about this chart from the Working Group on Extreme Inequality:

At The Expense Of The Rest Of Us

These benefits accrue to the wealthy few at the expense of the rest of us. What many people don't understand is that it is also at the expense of other companies. Our infrastructure and public structures - roads, education, courts, customers - are the soil in which good companies can grow. When tax dodgers are able to avoid contributing to our communities and country, the overall environment for the rest of our businesses deteriorates and our worldwide competitiveness declines. We see it all around us every day.

Ungrateful Bastards

For all the benefits huge multinational companies like GE get from We, the People -- subsidies, contracts, bailouts, tax breaks and customers, they aren't very rateful and certainly are not about to give anything back. Barry Ritholtz at The Big Picture writes,

Yet another reason why you don't bailout companies whose inability to manage risk allowed themselves to become destroyed: They not only do not deserve to continue with the same management/shareholders/creditors who all created the insolvency in the first place, but they are ungrateful bastards as well.

Even Reagan

Even tax-cutter Ronald Reagan balked when he learned that GE (for which he had been spokesman) didn't pay its taxes. From the NY Times story,

In the mid-1980s, President Ronald Reagan overhauled the tax system after learning that G.E. -- a company for which he had once worked as a commercial pitchman -- was among dozens of corporations that had used accounting gamesmanship to avoid paying any taxes.

"I didn't realize things had gotten that far out of line," Mr. Reagan told the Treasury secretary, Donald T. Regan, according to Mr. Regan's 1988 memoir. The president supported a change that closed loopholes and required G.E. to pay a far higher effective rate, up to 32.5 percent.


Isaiah Poole, in Rewriting Eric Cantor's Cant On Jobs,

"So let's stop the demagoguery about overtaxed corporations and have a dialogue instead about a tax code that taxes all people fairly. A tax system in which a billionaire like Warren Buffett pays taxes at a lower rate than his secretary is not fair, and an unfair tax code, one that's riddled with loopholes, perverse incentives and ways to game the system, keeps us limping and unproductive."

Terrance Heath has been writing a series on The Truth About Tax & Spend Conservatism,

... the truth about "Tax & Spend Conservatism" is that it isn't about raising or cutting taxes, but about whose taxes are raised and whose taxes are cut. It's about, as Robert Borsage put it, who gets hit with the tab for the great recession.

Resources

Public Campaign fact sheet titled, GE's Corporate Tax Dodging that begins,

General Electric spent $235.2 million in political money since 2000--paid no federal income taxes in 2008, 2009, and 2010.

and points out:

G.E. cut American jobs and exported them overseas.

The New York Times reports "[since] 2002, the company has eliminated a fifth of its work force in the United States while increasing overseas employment."

This post originally appeared at Campaign for America's Future (CAF) at their Blog for OurFuture. I am also a Fellow with CAF.


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On the heels of Wisconsin, Ohio, Indiana, Michigan, Iowa, Tennessee, Florida and other states, California Republicans have introduced a Wisconsin-style bill to strip public employees of the right to union bargaining. San Francisco Chronicle, yesterday, Showdown brewing over CA state employee pensions,
   
On Tuesday, Assemblyman Allan Mansoor, R-Costa Mesa (Orange County), introduced a bill that would strip public employees of their ability to collectively bargain for retirement benefits.
But what else would you expect? What is interesting is the rest of the story

The recent Speak Out California post, Discover The Network Out To Crush Our Public Workers looked into who is behind the attack on public employees, tracing back from an LA Times op-ed by Marcia Fritz of the California Foundation for Fiscal Responsibility. Fritz pops up again in the Chronicle story,
   
That [pension reform] "isn't just a state problem, it's far worse in cities," said Marcia Fritz, president of the California Foundation for Fiscal Responsibility, a nonprofit pension reform group. ... "We need the leader of California to stand up and lead on this issue," Fritz said. "And if he doesn't, we'll go around him, just like people did on Proposition 13 (in 1978 during Brown's first stint as governor). And I don't think he wants that."
Also popping up in the Chronicle story,

"I don't think Brown wants to take on his union pals," said Steven Greenhut, author of "Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation."
From Speak Out California's Discover The Network Out To Crush Our Public Workers,
   
The Pacific Research Institute has a mission to "champion freedom, opportunity, and personal responsibility for all individuals by advancing free-market policy solutions." The Director of PRI's Journalism Center wrote a book called, "Plunder: How Public Employee Unions are Raiding Treasuries, Controlling our Lives and Bankrupting the Nation."
In the "Network" post I wrote about "Cookie-Cutter Think Tanks,"
   
These are just a few of the network of conservative "institutes," etc. around the country. Just a very few. (Here is a list of 185 organizations purporting to be conservative state think tanks, a list of 40 conservative national organizations with state networks and a list of 306 organizations purporting to be conservative national think tanks and 65 conservative "family policy" organizations. There are other lists with other criteria.) 
As you follow these threads you discover layer upon layer of corporate/conservative front groups, masking their activities and funders with more layers of front groups. They all have similar mission statements, have similar people on their Boards with similar backgrounds, cover the same issues the same way, and even use remarkably similar language. They seem to be not just connected but interconnected. The sheer number of these similar "think tanks" make it appear that there must be a machine somewhere that stamps these things from a template. That machine is named "Scaife/Coors/Koch..." (Please read also and spend some time here.)
I haven't written Part II of the post yet, but in the research I found a "think tank" that had no purpose except to release one "study" by Lanny Ebenstein of the California Center for Public Policy, which is not to be confused with with the California Public Policy Center, of Pension Tsunami, which is discussed in the post. In today's Santa Ynez Valley Journal story, END APPROACHING FOR PUBLIC UNIONS?, Ebenstein pops up, with a new organization:
   
... a new group called Californians for Public Union Reform has spearheaded an effort to place an initiative on next year's state ballot that would end employee collective bargaining, the behind-closed-doors process by which unions negotiate salaries, health care and other retirement benefits on behalf of employees. 
Lanny Ebenstein, chairman of the group and a professor of economics at UCSB, said the proposal to curtail collective bargaining is a key component to fiscal reform, and one that he believes will help solve California's budgetary woes the same way Walker thinks the decertification of all public-sector unions will balance Wisconsin's budget. ... 
 "Something is fundamentally wrong with the system, and it's obvious what the elephant in the room is: Public sector employees are receiving too much compensation," he said.
That's the ticket, public employees -- teachers, police, DMV workers -- caused the recession. THEY are the reason states are out of money. Tax cuts for the rich had nothing to do with it.

Right. Blame the workers, who have already taken pay cuts, increased retirement age, foreclosures, etc.  Certainly not Wall Street or the wealthy who are taking an ever greater share of the country's income and wealth...

P.S. There is a Rally to Save the American Dream in Sacramento this Saturday, being organized by MoveOn.org and others to support working people, details here.

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Sacramento is still stuck.  George Skelton lays it out in the LA Times, in, California lawmakers need to get moving,

   
Republicans can't get out of their fix without angering the anti-tax crowd they cower to. Either they compromise and allow a tax extension measure to be placed on a special election ballot or they're seen as obstructionists or, worse, irrelevant, doing nothing in Sacramento except drawing their public pay and perks.

. . . Democrats seem to be moving at a brisk pace on spending cuts, but Republicans still are crawling on tax negotiations.

. . . The Legislature needs to pass a compromise package within the next three or four weeks in order for Brown to call a special election in June. If that deadline is missed, the earliest balloting would be in late September, because voters tend to ignore political pitches during the summer vacation season.

Republicans hold just over 1/3 of the votes in Sacramento. That is just enough to block everything, including allowing the public to express their wishes. And that is what they are doing. A shutdown seems to be their goal.

Update -- Dick Morris lays out the Republican strategy nationally, and it clearly is the same as in California: Create a budget deadlock on purpose, never mind the effect on citizens, use it to increase your own political power:

A Budget Deadlock Will Defeat Obama, But a Compromise Might Save Him,

A budget deadlock, played out over months, will doom President Obama and assure his defeat. But an easily won compromise will help him get re-elected.

. . . If the Republicans hold firm in demanding huge spending cuts and Obama does not give in, the question of whether or not to cut spending will dominate the nation's political discourse for months on end and will spill over into the 2012 election.

To assure that it will, the Republicans should hold firm to their budget spending cuts without surrender or compromise. If necessary, it is OK to vote a few very short term continuing resolutions to keep the government open for a few weeks at a time, always keeping on the pressure.

. . . If Obama offers a half a loaf, the GOP should spurn it for weeks and months.

Does this or does it not sound exactly like the Republican plan in California, too?


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Today's State of the State speech lasted about 15 minutes. This was actually a speech that regular people would enjoy listening to:

The interesting thing about this speech is that it was clearly not "crafted" by speechwriters. It was Jerry being Jerry, straightforward, open, and to the point.

Summary: he said we need to get the budget straightened out, that we have a great opportunity to really go places as a state if we do this, that he has presented a plan to do this and wants to take the plan to the voters, and if anyone has a better idea please tell us what it is.

One notable thing about the speech was it was entirely about trying to get the Republicans to cooperate with anything at all. Republicans are trying to prevent taking Brown's plan to the voters, prevent passing anything with any taxes, prevent any budget that allows the government to operate as a government, and prevent ... everything.

So Brown spent most of the speech outlining why it is wrong to prevent the public from being allowed to vote. Following are a few notes paraphrasing what he said:

Under our form of government it would be unconscionable to tell the voters they can't decide.

The state's Constitution says all political power is inherent in the people.

"When democratic ideals and calls for the right to vote are stirring the imagination of young people in Egypt and Tunisia and other parts of the world, we in California can't say now is the time to block a vote of the people,"

The only way forward is to go back to the people and seek their guidance.

If you want to block the people's right to vote, stand up to say block that vote. (No one stood up.)

My plan to rebuild California requires a vote of the people, and frankly, I believe it would be irresponsible to exclude the people from this process. They have a right to vote on this plan. This state belongs to all of us, not just those in this chamber. Given the unique nature of the crisis and the serious impact our decisions will have on millions of Californians, whether it's more cuts, extend taxes, the voters deserve to be heard.

It's the best budget I can devise, if any of you have any suggestions on how it can be better please share them with me. No one has offered even one alternative solution.

If we can get our budget in order we are in a good position to take advantage of our assets.



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Every Republican in the California legislature except two have taken a "Pledge" not to vote for any tax, ever, regardless of need or consequence. Now the anti-government group behind this Pledge is extending it to say that politicians are violating it even if they allow the public to vote on increasing any tax.

From the Sacramento Bee's Capital Alert blog, Grover Norquist group: Putting taxes on ballot violates no-tax pledge,

The national anti-tax group Americans for Tax Reform will e-mail and fax letters tomorrow to California legislators who signed its no-tax pledge, warning them the group will consider any vote to put tax extension measures on the ballot a violation of that pledge...

Gleason said asking voters whether they wanted to extend tax increases qualified as an effort to increase taxes.

So, what do you think? I guess it makes sense for an anti-government group to oppose allowing the public to make decisions. After all, that is what government is: the public making decisions for themselves.


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