Word on the Street: It’s Raining in Pennsylvania

Kim McMurray – Philadelphia, Pennsylvania

Meteorologically, it has been raining in Philadelphia for the past week and half. Sure, we have had a couple bright days, but overall it’s been dark and gloomy. Periodically, it has rained so hard that you would swear it would never end. Lightening tearing across the sky has become the new normal.

Economically, it has been raining in Philadelphia for a lot longer than a week and a half. The storm has spread throughout the entire state. We are still at 7.5% unemployment (not counting the 99-ers), we are cutting services for the elderly and the autistic, breast cancer screenings, and rape crisis centers.

And if it is raining in Pennsylvania, the public schools are flooding. Governor Corbett and PA House Republicans each introduced budgets cutting at least $900 million from the public school system. This translates into catastrophic results on the local level. In Bristol Township, they are thinking about cutting kindergarten all together. Coatesville and Chester School Districts might be switching over to a 4-day per week schedule. Philadelphia might be eliminating a program that provides Transpasses for students to get to and from school each day. These are stormy times, indeed.

Every night, Working America field organizers talk to members of the community who are rightfully worried about how these cuts will affect children. Karen Traylor is a mother of four in Philadelphia. She has seen how a lack of resources in the schools has affected her children. “There are not enough teachers, the classrooms are overcrowded, and the books are completely outdated. All of this is because they do not have enough money.” She worries that the new round of budget cuts will eliminate the advanced classes that have helped her youngest daughter thrive.

Alexandra Sytnik is a parent in Croyden, PA. She recently heard that an entire middle school will be closing its doors in the next two years. This means larger class sizes for an already strained teaching staff and less individual attention for students. Kids better start wearing raincoats to school.

Wait, is that a sunray peaking through the clouds? Is that an umbrella? For the first time in… a while, the PA legislature took in $503 million in tax surplus. That is $503 million that isn’t accounted for in the budgets currently being proposed. That’s a kindergarten program. That’s arts and music education. That’s Transpasses so city kids can afford to get to school. That’s shelter from the storm.

There are a lot more ways that we can fully fund the budget. We can close the Delaware tax loophole; we can impose a natural gas severance tax; we can demand that corporations pay their fair share. But these things take time, and right now we have an extra $503 million that can fund programs that are currently on the chopping block.

So what’s the hold up? Governor Corbett and House Republicans want to save the surplus. They want to put it in a rainy day fund. I guess they haven’t looked outside.

Improving broadband speeds and workers rights

Two years ago, MacWorld magazine wrote:

The Internet was born and and raised in the United States. Yet—thanks to slow speeds, inconsistent availability, and bandwidth caps—we now lag the rest of the world when it comes to broadband Net access.

The situation has not improved. American broadband speed and access is not where it should be, particularly in rural areas. Even Romania beats us.

The need to improve this situation is one of the key reasons union leaders are supporting the merger of AT&T and T-Mobile. The merger is a win for telecommunications workers since AT&T has a unionized workforce while T-Mobile does not. Those workers will now have a chance to form a union. It’s also a win for people across the country who lack access to broadband or have access but at speeds that lag most other developed nations.

Shortly after the merger was announced, CWA President Larry Cohen said:

For more than a decade, the United States has continued to drop behind nearly every other developed economy on broadband speed and build out. The Federal Communications Commission sounded the alarm more than a year ago with its broadband report, and President Obama in his State of the Union address called for increased efforts to bring the U.S. back to global parity as a key stimulus for economic development.

Today’s announcement of the acquisition of T-Mobile USA by AT&T is a victory for broadband proponents in both the U.S. and Germany. For the U.S., it means that T-Mobile customers will get quick access to the AT&T network, soon to include LTE or data speeds of at least 10 megabits down stream. More important, as part of the deal, AT&T is committing to build out to nearly every part of the U.S. within six years. Both AT&T and T-Mobile use GSM technology so there will be the immediate benefit of shared spectrum. Other reported deals involving T-Mobile would have joined incompatible networks; not only would that have forced a rebuild but would have required new phones for T- Mobile customers.

Last week, SEIU President Mary Kay Henry added her voice to those of other union leaders supporting the merger for these two important reasons:

“This merger is a win-win for American families. Now, thousands of workers in the telecommunications industry will have the opportunity to collectively bargain and insist that good, quality jobs stay in our communities. And with a stronger voice on the job, workers can ensure that they deliver the best service to consumers. As America’s working families continue to struggle, we must meet this moment with innovative solutions to expand opportunity and rebuild America. Access to high-speed internet access continues to define access to educational opportunities, economic development, job training, and healthcare and government services, making the telecom industry a critical part of this effort. AT&T’s commitment to expanding high-speed broadband access to 95% of Americans is the sort innovative solutions our economy demands.”

The fight over oil subsidies

The issue:

Democrats in the U.S. Senate are seeking to strip the five biggest oil companies of tax breaks that pad their profits by $2 billion a year and instead use the money to help defray the spiraling budget deficit.

Legislation unveiled Tuesday by three Democratic senators would cut off immensely profitable companies — Shell, Exxon Mobil, BP, Chevron, and ConocoPhillips — from subsidies such as a deduction originally aimed at boosting manufacturing. The bill would also close a loophole that effectively allows oil companies to shield themselves from taxes by deducting royalties paid to foreign governments.

The top five oil companies have booked profits of $36 billion in the first quarter this year. The Democrats say at those levels the big oil companies wouldn’t miss the subsidies.

Don’t forget that ExxonMobil, Chevron, and ConocoPhillips are all on the list of top tax avoiders, and received hundreds of millions of dollars in tax rebates and tax breaks last year.

Big oil’s response:

On Wednesday, ConocoPhillips CEO Jim Mulva outraged many on Capitol Hill when he released a statement calling it “un-American” to end subsidies to the Big 5 oil companies — ExxonMobil, BP, Shell, Chevron, and ConocoPhillips. A press release referencing the subsidies posted on the company’s website was headlined: “ConocoPhillips Highlights Solid Results and Raises Concerns Over Un-American Tax Proposals at Annual Meeting of Shareholders.”

That’s right. In ConocoPhillips’ view, it’s un-American to not give billions of dollars per year to companies on track to make more than $100 billion this year. Sen. Pat Roberts (R-KS), by the way, agrees with that assessment.

That’s a strong statement about what these corporations and politicians think America is and should be. They’re not just saying they think it would be a good idea for massive corporations to get massive tax breaks, no matter how enormous their profits are. They’re saying that it is America’s very identity to do that.

Which is about as clear as it gets when it comes to a statement about who you think the country and its government should work for—ConocoPhillips and Sen. Roberts are all about wealth over working people. They think that’s what America is. Do you agree?

Give them a mile and they’ll take 10 miles

On the one hand, it’s mind-boggling that anyone would seriously propose this with unemployment levels like we have in this country:

A bill voted out of the House Ways and Means Committee today would allow states to transfer federal UI funds away from helping the long-term jobless and use them instead for other purposes, including tax breaks for corporations. The bill, ironically dubbed the JOBS Act by its sponsors, Representative Dave Camp of Michigan and Senator Orrin Hatch of Utah, is the worst of all worlds: It would cause job loss; sets the stage to strip away insurance benefits that the long-term unemployed need, earned, and are counting on; rewards states for their failure to adopt responsible UI financing policies; and gives companies yet another tax break at the expense of workers.

On the other hand, as NELP points out, this is being proposed “less than five months after federal unemployment insurance (UI) for the long-term jobless was renewed through the end of 2011 as part of a deal to extend tax cuts for the wealthiest two percent of Americans for two years.” When you put it in that context, it almost shouldn’t be surprising that the people who extract tens of billions of dollars in tax cuts for millionaires in exchange for a pittance to jobless workers would turn around and start trying to transfer unemployment insurance from the people who need it to corporations.

But it certainly puts in perspective why compromises like that initial UI extension for tax breaks to the wealth one are dangerous—because, at least in today’s political climate, many anti-worker politicians are just going to keep going. We’re way past the “give them an inch and they’ll take a mile” scenario. They’ve taken a mile, maybe two. And in many cases, Democratic politicians have gone along with it, whether through agreement, lack of willpower, or just plain not seeing an alternative in the face of a nihilist, extremist Republican party. And every time Republicans get their mile or two, they come back asking for twice that. No, not asking. Demanding.

So how does this new bill work, and what’s the justification?

More than four million workers currently receive federal unemployment benefits through either the Emergency Unemployment Compensation or Extended Benefits programs, which Congress earlier renewed through 2011. The NO JOBS Act would allow states to take the $31 billion allocated for these programs and spend those dollars on reducing federal and state unemployment taxes for businesses. It also would allow states to reduce the number of weeks of federally funded benefits, reduce the amounts paid, or eliminate them entirely. One provision would allow a state to take the federal benefit funds and use them to finance its depleted unemployment trust fund rather than collect employer taxes, or use them to pay regular state benefits instead.

State UI trust funds face undeniable challenges, but in large measure, they are insolvent because state legislatures have given in to business pressure to cut unemployment insurance taxes even during periods of economic boom, rather than making sure their trust funds were ready for the inevitable rainy days.

Exactly. It takes the earlier destruction wrought by anti-worker policies and turns it into an excuse to hurt working people still further.


Whirlpool’s “negative 10.9 percent” tax rate

Something to add to the corporate tax avoiders list:

Whirlpool had negative effective income tax rates in 2010, 2009 and 2008. Last year, the company reported an income tax benefit of $64 million and an effective tax rate of negative 10.9 percent, according to company filings. The company expects a similar tax benefit in 2011, corporate controller Larry Venturelli told analysts today.

(Via ThinkProgress)

That’s although sales rose 7 percent last year. Whirlpool will also be getting around $300 million in energy tax credits.

Oh, and:

After closing nine factories in North America since the merger [with Maytag], the company still operates nine plants in the U.S., with about 17,500 workers, and says 82 percent of the units sold in the U.S. are domestically made. Whirlpool can claim the tax credit only for appliances produced in the U.S.
Globally, Whirlpool employs 71,000 people.

The company apparently is planning new a research and development center in Tennessee and new headquarters in Michigan, but will that new investment in American jobs balance out the Whirlpool layoffs we’ve previously covered in Arkansas and Indiana, or the rest of the factories they’ve closed?

It’s great when companies decide to invest in the US and create some jobs. But before we hail corporate job creators, we have to look at their records. And when they’ve been given giant tax rebates or benefits or whatever you call it—allowed to pay no income tax and given money on top of it—year after year while they slashed jobs here and ship them overseas, they have a high bar to meet before they get to brag about the good they’ve done the economy.

Interesting things around the internet

  • Some politicians and pundits like to draw our attention to people who don’t earn enough money to pay income tax, as if only paying payroll and sales and various other taxes but NOT income tax is some privilege. Notice that they draw a lot less attention to the 4,000 people or households making more than $1 million per year who don’t pay income tax…
  • Wal-Mart has changed one of its key measures of performance. Shockingly, the change benefits its current CEO, who got more money after the goal posts were moved than he would have if they’d stayed in the same place. Meanwhile:

    But Mr. Flickinger said Wal-Mart’s pay packages seemed especially unfortunate in light of the company’s decision late last year to end its longtime profit-sharing programs for lower-level workers. This arrangement was created by Sam Walton, the company’s founder, and was a source of considerable pride to him.

    “Profit-sharing has pretty much been the carrot that’s kept Wal-Mart headed forward,” Mr. Walton wrote in his 1992 autobiography, “Sam Walton: Made in America.”

  • Paul Krugman:

    The fact is that what we’re experiencing right now is a top-down disaster. The policies that got us into this mess weren’t responses to public demand. They were, with few exceptions, policies championed by small groups of influential people — in many cases, the same people now lecturing the rest of us on the need to get serious. And by trying to shift the blame to the general populace, elites are ducking some much-needed reflection on their own catastrophic mistakes.


    These days Americans get constant lectures about the need to reduce the budget deficit. That focus in itself represents distorted priorities, since our immediate concern should be job creation. But suppose we restrict ourselves to talking about the deficit, and ask: What happened to the budget surplus the federal government had in 2000?

    The answer is, three main things. First, there were the Bush tax cuts, which added roughly $2 trillion to the national debt over the last decade. Second, there were the wars in Iraq and Afghanistan, which added an additional $1.1 trillion or so. And third was the Great Recession, which led both to a collapse in revenue and to a sharp rise in spending on unemployment insurance and other safety-net programs.

  • The Writers Guild of America, East has been organizing “non-fiction” (aka reality) television workers. Now, Lion TV, which makes shows like Cash Cab and History Detectives, has agreed to bargain with its unionized employees. This is terrific news, and hopefully will set a precedent in the up-to-now pretty exploitative reality TV industry.

Affordable Care Act protecting hundreds of thousands of young adults

Remember how I was saying that when people know what’s in the Affordable Care Act, they very often realize how important it can be for them? Well…

Hundreds of thousands of young adults are taking advantage of the health care law provision that allows people under 26 to remain on their parents’ health plans, some of the nation’s largest insurers are reporting. That pace appears to be faster than the government expected.

WellPoint, the nation’s largest publicly traded health insurer with 34 million customers, said the dependent provision was responsible for adding 280,000 new members. That was about one third its total enrollment growth in the first three months of 2011.

Others large insurers said they have added tens of thousands of young adults. Aetna, for example, added fewer than 100,000; Kaiser Permanente, about 90,000; Highmark Inc., about 72,000; Health Care Service Corp., about 82,000; Blue Shield of California, about 22,000, and United Healthcare, about 13,000.

And that’s just in the first year. In the next month or so, many more young adults will be graduating from college, and many of them won’t yet have jobs that offer insurance. So that’ll be another wave of young people and their parents who get, very concretely, what the Affordable Care Act does for them.

(Via Balloon Juice)

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Town hall meeting gets contentious over health care reform

Another Republican Congressman gets grilled by constituents about the votes he’s taken that will hurt them. In this case, it’s Rep. Randy Hultgren, of Illinois:

CONSTITUENT 1: One more thing about healthcare. I’ve got a daughter and she had a baby about four months ago. She decided that she loves being a mother so much to resign from her position as a teacher. Guess what? She can’t get insurance because she has a preexisting illness. She’s been cancer-free for fifteen years but the cancer also brought on diabetes because it damaged her pancreas. Preexisting illness and the insurance companies tell her to take a hike. [...]

HULTGREN: Well as you think — it’s one of those things, we’re a compassionate nation, we need to take care of people with preexisting conditions. The lady talked about that as well. We can do that. I agree with you too, we’re America, we can figure this out. [...] But then for those who are truly uninsurable with preexisting conditions, we’ve got to have a system in place and I know we can figure that out.

CONSTITUENT 1: This healthcare system if it finally gets adopted, something about if you have a preexisting illness, you can not be turned down for health insurance. That’s what I want.

CONSTITUENT 2: That was passed! He voted to repeal it.

HULTGREN: [...] You know what, some part of the bill. I think this is part of it that’s going to stay, the Senate’s not going to pass repeal.

CONSTITUENT 2: So why did you vote for it?

HULTGREN: Because the immediate next vote was, now let’s fix it. Let’s go in and fix it [...]

CONSTITUENT 2: Which bill was that, which bill was that that you voted for to fix it?

HULTGREN: The very next day.

CONSTITUENT 2: What’s the bill number?

HULTGREN: I’ll get it to you.

ThinkProgress notes that in fact there was no such vote to “fix” the bill. Hultgren voted to repeal health care reform, not to improve it. They also point to the cynicism of Hultgren’s position that his vote to repeal the Affordable Care Act was ok because without the Senate’s vote repeal would never become law.

This sort of thing is where Republican politicians don’t have any good answers on health care reform. They were very successful demonizing the law in broad (often untruthful) strokes, but many of the specifics of what the Affordable Care Act does are popular, for extremely good reasons such as that this woman’s daughter—a teacher who has left work to stay home with her baby—will be able to get insurance despite the fact that she had cancer fifteen years ago. Not enough people know that, but those who do understand that this law could literally be a lifesaver.

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The yachts are all right

From Think Progress:

In response to the worst state budget crisis since World War II, the Texas House has proposed slashing $27 billion from the budget, including huge cuts to education, nursing homes, and health care for the poor. Yet last Friday, the Texas House Ways and Means Committee approved a tax break for those who want to buy yachts costing $250,000 or more.


The bill was originally estimated to cost Texas $1.4 million annually in lost revenue.


Under the current proposal, $7.8 billion will be cut from Texas public schools, four community colleges will close, 60,000 students will lose college financial aid, as many as 97,000 teachers and school employees will be laid off, 9,300 government jobs will be eliminated, Medicaid will be shortchanged by nearly $14 billion, and health and human services funding will plummet by a quarter.

Texas has a curious approach to balancing the budget, as I’ve noted earlier in Cutting Jobs to Create Jobs, and Texas May Eliminate Medicaid,which contains this little list:

Texas also has*:
The third highest teen birth rate
The third highest poverty rate
The lowest number of high school graduates
The lowest voter turnout

* from an interview on NPR

It’s difficult to imagine how eliminating colleges and teachers will help the state of Texas, but clearly yacht owners and their elected officials aren’t interested in the long term. They’re interested in what they personally get, right here, right now.

It is breathtaking that Texas is so honest in presenting their priorities. Educating children and caring for the poor and elderly aren’t important. Tax breaks for those who fund the campaigns of those who will continue to provide tax breaks for the funders of campaigns – now that’s a priority.

“Union Town”

Tom Morello has a new song out inspired by and supporting Wisconsin’s workers. In fact, the proceeds of his forthcoming EP will go to the America Votes Labor Unity Fund “to support mobilization for pushing back against the state attacks on workers.”