In case you couldn’t tell from the 20 debates, constant news coverage and firehose-like flow of ads, there’s a Republican presidential primary underway. But to listen to the candidates—particularly on the economy—you’d think they were running for president of a different planet, one eerily like ours but facing totally different problems.
Let us count the ways that the Republicans’ economic conversation is totally out of touch with actual reality here on Earth.
Clap louder, Mitt.
Jobs. At Wednesday’s debate, the word “jobs” was uttered hardly at all, and zero times by candidate Rick Santorum. In a larger sense, when these candidates talk about “creating jobs” they mean one thing: directing more money to the very wealthiest and to big corporations—through tax cuts or through removing regulations designed to protect consumers and workers. This might make a little bit of sense if the biggest problem facing the economy were corporations not having enough money. It’s not. The problem is a lack of consumer demand, because too few people have jobs and wages are falling behind.
Debt and Deficits. These aren’t the most important economic issue we face—continued too-high unemployment is. But by the standards of the Republicans’ own rhetoric, they’re important enough to serve as the basis for attacks and talking points. So it seems strange that the plans proposed by Romney, Santorum and Gingrich would increase the debt—and, more specifically, increase the debt by more than Obama’s proposals would. And they don’t build up this debt by investing in long-term needs: they do it by demolishing revenue through massive tax cuts aimed mostly at the wealthiest. Which brings us to…
Taxes. The public consensus is overwhelmingly clear—to afford the things we need, we should be able to ask a little bit more from the very richest than the current historic low rates. All of the Republican plans do exactly the opposite. For example, Romney’s plan would deliver a $264,000 tax cut to the top 0.1%. As economist Justin Wolfers noted, “Romney’s new tax plan is massively regressive relative to current code. Most of the spoils are going to the rich” – and the same is true of the other Republican candidates. And even as they propose these massive tax cuts for the wealthy, they propose devastating cuts to Medicaid and other programs that working-class people rely on. It’s redistribution, upwards.
Housing. In many ways this is the most baffling omission of all. In recent days, Republican candidates have been avoiding the subject entirely even as it’s clearly one of the most important factors in the financial crisis. A few months back in Nevada, Romney offered up “let it run its course and hit the bottom” as his solution to the foreclosure crisis (the housing version of “let Detroit go bankrupt”), though he softened how he talked about it in Florida a few weeks later. But mostly it’s been crickets and tumbleweeds. Forgive me if I’ve missed this, but has any Republican candidate, or even any Republican in Congress, weighed in on the mortgage-fraud settlement or the underlying issue of mass abuse of the foreclosure process?
Let’s not get into issues like the minimum wage, rebuilding infrastructure, keeping teachers in classrooms or protecting the freedom to form a union and collectively bargain—all issues that matter to our economy. We’d be naïve to expect this batch of Republican candidates to say anything constructive.
During Republican primaries, the candidates are pitching to a small audience, and their proposals are kept in line by harshly ideological enforcement mechanisms like talk radio’s Rush Limbaugh and the Wall Street-funded Club for Growth. But with their pledges and proposals now, they’re committing themselves to a totally fictional vision of the economy in the fall.
Out in the real world, Working America staff talk to around 20,000 people every week in neighborhoods across the country and stay in close contact with our members, so we have a pretty good sense of what a broad group of working- and middle-class people care about in this critical year. They want to make sure they can get and keep a good job, be covered if they get sick, send their kids to good schools, stay in their homes and retire with some security. I don’t know what world the Republican primary is taking place in, but it’s not the one where our members live.
This morning, President Obama signed into law a deal that extends the payroll tax holiday for the rest of the year. With the economic recovery still fragile, it’s good to keep this payroll tax cut in place to help keep a little extra money in working families’ pockets. But the flaws of today’s deal—flaws forced through by Republicans in the House, but passed with big numbers from both parties—really illustrate the cluelessness and callousness of policy-making.
Unemployment Insurance: The compromise does, indeed, renew unemployment insurance, but dramatically cuts back the number of weeks that the jobless can draw on it, to 73 weeks or even fewer in some states. The problem of long-term unemployment is still a serious one, with about 40% of the unemployed out of work for six months or more, so pulling away this lifeline is silly. In addition, the deal imposes humiliating conditions on the jobless before they can draw on the benefits they paid into. The net result will be that far too many people who depend on UI will lose it.
Health Care: Another way that the bill is paid for is with a sizable cut to a fund meant to pay for preventative care services under the Affordable Care Act. Preventative care for those who can’t otherwise afford it helps them stay healthier and lowers their longer-term medical costs. Cutting this fund isn’t just morally loathsome; it’s economically short-sighted.
With cuts and new conditions on unemployment benefits, a major hit to the Affordable Care Act and an attack on public-sector workers, it seems like the details of this bill are a big ideological win for the hard-right Tea Party caucus of congressional Republicans. That they’d demand this kind of ransom as the price for passing the payroll tax holiday is infuriating; that so many ostensibly pro-worker members of Congress would let them is just depressing.
When President Obama first offered up the American Jobs Act, it was funded in a popular, common-sense way—with a small surcharge on income over $1 million. It also included a broader set of job-creation components, including investment in infrastructure and support to state budgets for keeping teachers and firefighters on the job. Provisions of this bill were blocked by Senate Republicans because they were not willing to exchange a tiny tax increase on millionaires for literally hundreds of thousands of jobs for working people.
Politics is about priorities. The people we talk to across the country have their priorities: they want to see the very richest pay their fair share and use that money to create jobs and support communities. In Washington—particularly among congressional Republicans—they have their priorities exactly backwards. It’s sick people, retirees and the jobless who have to sacrifice, not those who are already doing well.
“Have we become so dysfunctional that even when we agree on things we can’t do it?” President Barack Obama asked today. It’s a good question.
We’re still not really close to an agreement on an extension of unemployment insurance and the payroll tax cut that will expire in ten days. The easy answer is for the House to pass the short-term extension passed by an overwhelming bipartisan margin in the Senate—but the Tea Party radicals who keep Speaker John Boehner on a short leash are preventing that. The President is pushing hard to try and break the deadlock this week.
The consequences of failing to pass an extension? Millions of people cut off from the lifeline of unemployment insurance, and 160 million people facing a payroll tax hike. “”So many of these debates get reduced to which party is winning and which party is losing,” Obama said in a statement today, “but we should remind ourselves this is about the American people.”
Obama said that more than 30,000 people have written in to explain what the end of the payroll tax cut and unemployment benefits would means to them. For working-class and middle-class families, those dollars represent heating oil, food, gas for your car to get you to and from work, or school supplies. For the economy as a whole, it’s fewer dollars that van flow to local businesses.
“This is exactly why people get so frustrated with Washington,” Obama said. He’s right. It’s time for Boehner to get it together and pass the Senate’s bipartisan compromise, and then get to work on an extension for the rest of 2012.
The Obama Administration has proposed some new regulations to protect home care workers. From the New York Times:
Labor unions and advocates for low-wage workers have pushed for the changes, contending that the 37-year-old exemption improperly swept these workers, who care for many elderly and disabled Americans, into the same “companion” category as baby sitters. The administration’s move calls for home care aides to be protected under the Fair Labor Standards Act, the nation’s main wage and hour law.
These workers, according to industry figures, generally earn $8.50 to $12 an hour, compared with the federal minimum wage of $7.25 an hour. The White House said 92 percent of these workers were women, nearly 30 percent were African-American and 12 percent Hispanic. Nearly 40 percent rely on public benefits like Medicaid and food stamps.
While industry experts say an overwhelming majority are paid at least the minimum wage, many do not receive a time-and-a-half premium when they work more than 40 hours a week. Twenty-two states do not include home health care workers under their wage and hour laws.
Home care workers assist elderly people with all aspects of their lives, including bathing, exercise, and remembering to take medications. They may also prepare meals, and do housework. They may be dealing with clients in varying stages of dementia. There’s a great deal of skill required to do this kind of work.
These are also workers who don’t get sick days, any sort of benefits, and if their client dies – well, that’s just too bad. No more paychecks for them.
Predictably, the opposition is gearing up:
“The president’s goal is commendable, but the likely result of this new rule is reduced hours for home care workers and higher costs for taxpayers,” said John Kline, a Minnesota Republican who is chairman of the House Education and the Work Force Committee, and Tim Walberg, a Minnesota Republican who heads the panel’s subcommittee on work force protections. “Moreover, our nation’s elderly may pay the greatest price in the form of more costly services and fewer opportunities to obtain the care they need in the comfort of their own homes.”
In other words: Caregivers are good enough to take care of the elderly, but what they do isn’t real work, therefore they don’t deserve the sort of protections that other workers are entitled to.
This shouldn’t be particularly complicated. Two key policies keeping working families afloat—a temporary cut in the payroll tax and an extension of the time people out of work can draw unemployment insurance—are set to expire in a matter of days, pulling money out of the pockets of millions.
Congress had an easy choice available. Since our economy continues to struggle with high joblessness and low consumer demand, our elected leaders should have simply renewed these policies. But never underestimate the hostility of the House Republican majority to simple governance and their indifference to the economic condition of working-class people.
On Saturday, the U.S. Senate passed—after a lot of negotiation—a bipartisan compromise that would extend the payroll tax cut and unemployment insurance in the short term. It’s not perfect, but it would at least avoid pulling the rug out from under 160 million workers and millions of unemployed people. House Speaker John Boehner, an Ohio Republican, asked Senators of both parties to come to a compromise, which passed 89-10, on the assumption that the House would vote on the same bill today.
But since nothing can be simple with this Congress, not even the most no-brainer extension of basic economic relief, House Republicans may very well defeat the compromise bill tonight. The political-journalism term of art for this might be “playing hardball,” but the more accurate term is “throwing a tantrum.”
It’s worth noting that the House Republicans’ strategy here is to bundle together the important payroll tax holiday and unemployment insurance extensions with unrelated riders aimed at scoring political points. This is sure to upset people who signed this pledge, right?
We will end the practice of packaging unpopular bills with “must-pass” legislation to circumvent the will of the American people. Instead, we will advance major legislation one issue at a time.
The Washington Post’s Greg Sargent nails it: the caucus that controls the U.S. House is “extreme, intransigent, self-indulgent and hostile to basic norms of governing.” To that I’d only add “clearly completely uninterested in the real-world effects of their decisions.”
“The Administration strongly opposes H.R. 3630. With only days left before taxes go up for 160 million hardworking Americans, H.R. 3630 plays politics at the expense of middle-class families. H.R. 3630 breaks the bipartisan agreement on spending cuts that was reached just a few months ago and would inevitably lead to pressure to cut investments in areas like education and clean energy. Furthermore, H.R. 3630 seeks to put the burden of paying for the bill on working families, while giving a free pass to the wealthiest and to big corporations by protecting their loopholes and subsidies,” the administration said in a statement of policy.
Added Carney definitively: “If the president were presented with H.R. 3630, he would veto the bill.”
Cue the feigned shock and anger from Speaker John Boehner, whose office said the veto threat was “legislative malpractice,” based on “fictitious reasoning.”
We’re going to once again disagree with the Speaker: there’s nothing “fictitious” about the economic pain and suffering that will result if H.R. 3630 becomes law.
With the average length of unemployment at a record high, it is cruel and selfish to cut 40 weeks off of federal unemployment benefits.
With millions of Americans out of work through no fault of their own, it is cruel and selfish to require applicants to be tested for drugs just to get the funds to buy groceries and fill their gas tanks.
With the unemployment rate in states like Michigan still over 10 percent, it is cruel and selfish to end Tier IV unemployment compensation and cut aid from states that need it most.
With state governments faced with impossible budget choices, it is cruel and selfish to override their ability to make decisions on unemployment benefits – and from the same Congressmen who were elected on the promise of “smaller government.”
With 80 percent of Americans begging the two parties to work together for solutions, it is cruel and selfish to treat unemployed Americans as pawns in the Speaker’s political chess match with the President.
Memo to House Republicans: It’s not a game to those outside the Beltway. It’s not a game to the people at home having to decide between food and medicine. We aren’t fooled or amused by Rep. Dave Camp writing a bill that insults our dignity and hurts our wallets, and then putting a bow on top and calling it “The Middle Class Tax Relief and Job Creation Act.”
Why don’t they get it? Why do they think less money in the pockets of Americans translates into “job creation?” Why do they think the inability to pay for food and housing is good for the economy?
We’re far from agreeing with everything the Obama Administration does. But if this bill gets to the President’s desk in its current form, a veto is the least he could do. If I was President, I might rip it up, or set it on fire.
Despite the talk of “recovery,” companies are still shedding jobs all over the country.
[Merck], with about 12,000 workers in the Philadelphia area, said July 29 that it planned to cut 12 percent to 13 percent of its workforce of about 100,000 by 2015 as it adjusts to market conditions and its 2009 acquisition of Schering Plough.
Twelve to thirteen percent of the workforce at a giant corporation like Merck is a big reduction. Thousands of jobs will be eliminated:
Pharma-industry watchers have suggested that about 5,200 of the total cuts could be U.S. jobs, with from 3,000 to 4,000 in New Jersey and Pennsylvania. A Merck spokesman would not comment on the state-by-state plans. The cuts through October won’t be the end of the process, though.
Even the tech sector isn’t immune. HP is eliminating tablets and PCs – and positions. From zdnet.com:
Following HP’s decision earlier in the summer to wind down the PC and tablet group, and spin or sell off the Palm division, the company has confirmed it will lay off employees, particularly in the webOS section of operations.
Reports suggest that sources close to the company say that HP has plans to lay off over 500 employees, and that the redundancies could begin as early as this week.
Defense companies, many of which receive loads of taxpayer money in the form of government contracts, are still cutting American positions. In Orlando, FL, Northrop Grumman is laying off 200 workers. From the Orlando Sentinel:
For the second time this year, Northrop Grumman Corp. plans to shed at least 200 jobs at its once-expanding laser-weaponry factory in Apopka — a move that will eliminate 24 percent of the remaining work force, the company confirmed Tuesday.
Once the layoffs take effect, Northrop Grumman Laser Systems will have eliminated more than 40 percent of its work force, or 465 jobs, so far this year. The first round of layoffs, in March, were the first job losses in about two decades at the unit, where employment peaked at nearly 1,100 workers early this year. No further cuts are expected, the company said.
Same with the defense giant Lockheed Martin: From Syracuse.com:
Eighty-five Lockheed Martin production workers are being notified of layoffs, a company spokesman said.
The layoffs affect unionized hourly workers as well as non-union salaried employees in the Salina plant. The last day of work for those affected will be Oct. 7 or Oct. 14, he said.
The greatest job losses would be felt by larger sites in Fort Worth, Texas, where about 370 jobs are being cut; Marietta, Georgia and Palmdale, California. Lockheed has cut jobs and held down discretionary spending in response to a flattening of U.S. defense spending.
Middlebury-based Pace American Enterprises Inc. plans to eliminate 106 jobs at its plant in northeastern Indiana as part of company-wide layoffs.
The manufacturer of cargo trailers notified the Indiana Department of Workforce Development about the job cuts in a letter posted Wednesday.
In Chicago, two hundred public school jobs are being cut, and more layoffs could be coming. From the Chicago Tribune:
Chicago Public Schools officials announced Thursday they have trimmed the Chief Education Office and network offices by 200 positions at a cost savings of $16 million, part of a district-wide re-organization plan under CPS’ new leadership team.
Those 200 jobs represent a 25 percent reduction in staff for those departments. The CPS budget approved in August called for $107 million in cuts across all departments. District officials say they have just $44 million of that total left to cut, expected to come through a combination of layoffs, closing vacant jobs, program reductions, streamlining curriculum, and eliminating other duplications. Officials declined to say how many more layoffs are anticipated.
In Wisconsin, where Scott Walker’s boosters are claiming miracles from his anti-union efforts, another 213 jobs lost. From the The Business Journal serving Milwaukee:
Frontier Airlines plans to slash 213 jobs in Milwaukee, according to a mass layoff notice filed Friday afternoon with the Wisconsin Department of Workforce Development.
The layoffs effect Frontier workers at General Mitchell International Airport, the airport commissary and the airport maintenance facility, according to the notice.
AnMed Health in Anderson, S.C., is preparing to eliminate 185 positions, which is projected to save $5.2 million in its upcoming fiscal year…
As thousands more American workers lose their jobs, Congress is still dithering, and no action is being taken on the American Jobs Act. The conservatives have been serving up the same solution for over a decade now: cut taxes. It’s time to stop clinging to foolish dreams and bad policies. It’s time to pick up the pace, and jump-start the workforce and our economy.
At nearly every door of the thousands Working America canvassers knock on every week, there’s one issue that comes first, last and in between: jobs.
In states like Pennsylvania, Ohio and New Mexico, the crisis of joblessness is the most important issue from everyone we talk to. They want more support for the unemployed and more opportunities to put people back to work. The message from the neighborhoods we visit: before we can tackle any other issue facing us, we have to put paychecks back in people’s pockets. These folks are particularly interested in President Obama’s recently-proposed American Jobs Act.
The consensus among economists is that, if passed, the American Jobs Act could pull us away from continued recession and help put people back to work. That’s according to a new survey from Bloomberg News.
The bill is, as we’ve said, a good start—not a magic wand, just a few simple, common-sense proposals to help businesses create jobs, prevent state layoffs and put a little extra money in working people’s pockets.
Of course, the optimism people have when they talk about the President’s jobs plan is tempered by frustration and skepticism over whether Congress will actually listen to voters and bother to pass it. After the new House majority won on a promise to focus on jobs, they set the issue aside to focus on ideological and economically-illiterate crusades over spending and regulation. Passage of the American Jobs Act is in doubt, even as our members and the people we talk to are looking for action.
“The important thing to consider is: What happens if we don’t do anything?” asked Scott Brown, one of the economists surveyed by Bloomberg. It’s a good question, and one that people across the country are wondering even as Congress fails to act.
President Obama gives another great speech—great not just because he’s a compelling speaker but because he’s laying out so much about what’s wrong with the economy.
I ran for President because for much of the last decade, a very specific governing philosophy had reigned about how America should work: Cut taxes, especially for millionaires and billionaires. Cut regulations for special interests. Cut trade deals even if they didn’t benefit our workers. Cut back on investments in our people and in our future -– in education and clean energy, in research and technology. The idea was that if we just had blind faith in the market, if we let corporations play by their own rules, if we left everyone else to fend for themselves that America would grow and America would prosper.
And for a time this idea gave us the illusion of prosperity. We saw financial firms and CEOs take in record profits and record bonuses. We saw a housing boom that led to new homeowners and new jobs in construction. Consumers bought more condos and bigger cars and better TVs.
But while all this was happening, the broader economy was becoming weaker. Nobody understands that more than the people of Ohio. Job growth between 2000 and 2008 was slower than it had been in any economic expansion since World War II -– slower than it’s been over the last year. The wages and incomes of middle-class families kept falling while the cost of everything from tuition to health care kept on going up. Folks were forced to put more debt on their credit cards and borrow against homes that many couldn’t afford to buy in the first place. And meanwhile, a failure to pay for two wars and two tax cuts for the wealthy helped turn a record surplus into a record deficit.
I ran for President because I believed that this kind of economy was unsustainable –- for the middle class and for the future of our nation. I ran because I had a different idea about how America was built.
I believe government should be lean; government should be efficient. I believe government should leave people free to make the choices they think are best for themselves and their families, so long as those choices don’t hurt others. (Applause.)
But in the words of the first Republican President, Abraham Lincoln, I also believe that government should do for the people what they cannot do better for themselves. (Applause.) And that means making the long-term investments in this country’s future that individuals and corporations can’t make on their own: investments in education and clean energy, in basic research and technology and infrastructure. (Applause.)
That means making sure corporations live up to their responsibilities to treat consumers fairly and play by the same rules as everyone else. (Applause.) Their responsibility is to look out for their workers, as well as their shareholders, and create jobs here at home.
And that means providing a hand-up for middle-class families –- so that if they work hard and meet their responsibilities, they can afford to raise their children, and send them to college, see a doctor when they get sick, retire with dignity and respect. (Applause.)
That’s what we Democrats believe in -– a vibrant free market, but one that works for everybody. (Applause.) That’s our vision. That’s our vision for a stronger economy and a growing middle class. And that’s the difference between what we and Republicans in Congress are offering the American people right now.
Some key excerpts from President Obama’s Labor Day speech.
I believe this with every fiber of my being: America cannot have a strong, growing economy without a strong, growing middle class, and the chance for everybody, no matter how humble their beginnings, to join that middle class — (applause) — a middle class built on the idea that if you work hard, if you live up to your responsibilities, then you can get ahead; that you can enjoy some basic guarantees in life. A good job that pays a good wage. Health care that will be there when you get sick. (Applause.) A secure retirement even if you’re not rich. (Applause.) An education that will give your children a better life than we had. (Applause.) These are simple ideas. These are American ideas. These are union ideas. That’s what we’re fighting for. (Applause.)
I was thinking about this last week. I was thinking about this last week on the day I announced the end of our combat mission in Iraq. (Applause.) And I spent some time, as I often do, with our soldiers and our veterans. And this new generation of troops coming home from Iraq, they’ve earned their place alongside the greatest generation. (Applause.) Just like that greatest generation, they’ve got the skills, they’ve got the training, they’ve got the drive to move America’s economy forward once more. We’ve been investing in new care and new opportunities and a new commitment to our veterans, because we’ve got to serve them just the way they served us. (Applause.)
But, Milwaukee, they’re coming home to an economy hit by a recession deeper than anything we’ve seen since the 1930s. So the question is, how do we create the same kinds of middle-class opportunities for this generation as my grandparents’ generation came home to? How do we build our economy on that same strong, stable foundation for growth?
Now, anybody who thinks that we can move this economy forward with just a few folks at the top doing well, hoping that it’s going to trickle down to working people who are running faster and faster just to keep up, you’ll never see it. (Applause.) If that’s what you’re waiting for, you should stop waiting, because it’s never happened in our history. That’s not how America was built. It wasn’t built with a bunch of folks at the top doing well and everybody else scrambling. We didn’t become the most prosperous country in the world just by rewarding greed and recklessness. We didn’t come this far by letting the special interests run wild. We didn’t do it just by gambling and chasing paper profits on Wall Street. We built this country by making things, by producing goods we could sell. We did it with sweat and effort and innovation. (Applause.) We did it on the assembly line and at the construction site. (Applause.)
We did it by investing in the people who built this country from the ground up –- the workers, middle-class families, small business owners. We out-worked folks and we out-educated folks and we out-competed everybody else. That’s how we built America.
You know, that’s why we passed financial reform to provide new accountability and tough oversight of Wall Street; stopping credit card companies from gouging you with hidden fees and unfair rate hikes. (Applause.) Ending taxpayer bailouts of Wall Street once and for all. They’re not happy with it, but it was the right thing to do. (Applause.)
That’s why we eliminated tens of billions of dollars in wasteful taxpayer subsidies, handouts to the big banks that were providing student loans. We took that money, tens of billions of dollars, and we’re going to go to make sure that your kids and your grandkids can get student loans and grants at a cheap rate and afford a college education. (Applause.) They’re not happy with it, but it was the right thing to do. (Applause.)
Yes, we’re using those savings to put a college education within reach for working families.
That’s why we passed health insurance reform to make coverage affordable. (Applause.) Reform that ends the indignity of insurance companies jacking up your premiums at will, denying you coverage just because you get sick; reform that gives you control, gives you the ability if your child is sick to be able to get an affordable insurance plan, making sure they can’t drop it.
That’s why we’re making it easier for workers to save for retirement, with new ways of saving your tax refunds, a simpler system for enrolling in plans like 401(k)s, and fighting to strengthen Social Security for the future. (Applause.) And if everybody is still talking about privatizing Social Security, they need to be clear: It will not happen on my watch. Not when I’m President of the United States of America. (Applause.)
That’s why — we’ve given tax cuts — except we give them to folks who need them. (Applause.) We’ve given them to small business owners. We’ve given them to clean energy companies. We’ve cut taxes for 95 percent of working Americans, just like I promised you during the campaign. You all got a tax cut. (Applause.)
And instead of giving tax breaks to companies that are shipping jobs overseas, we’re cutting taxes to companies that are putting our people to work right here in the United States of America. (Applause.)