Jul 302010
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There’s not much argument that Republicans as a whole support business and the free-market. They’ve long espoused their belief in government’s responsibility to support the private sector and its role in job creation. With machine like consistency, they’ve beat back efforts to spawn government jobs, always asserting that small business is where the jobs are. So, one would think the Republicans would support an attempt to assist small businesses. But such was not the case yesterday, when Senate Republicans voted unanimously to defeat a bill to stimulate investment in small business.

The Small Business Jobs and Credit Act of 2010 is intended to spur investment by eliminating capital gains taxes for investment in small firms, and also creating a Small Business Lending Fund to underwrite loans through community banks. It would also waive fees on Small Business Association loans and allow increased tax deductions for new equipment and other expenses. For many this sounded like a reasonable shot in the arm for beleaguered businesses, but Republicans filibustered yet again — and another potential jobs bill failed to pass.

This comes after weeks of Republican fighting to strip the job creation provisions from the bill to extend unemployment benefits, which they subsequently stalled even after stripping. Democrats in the Senate did finally pass the extension last week with the help of 2 Republicans, but not before 2.6 million Americans had seen their benefits run out. If this all seems more than a little counter-production in an environment where real unemployment is still over 16.5%, that’s because it is.

So, what is the reason for the seeming incongruity between Republican rhetoric and their voting record? The answer just might be found in their position on the Bush tax cuts.

When defending the extension of the Bush cuts for the wealthy, Republicans routinely cite the detrimental impact the “hikes” would have on small business. This slant certainly makes good political sense, since according to the Small Business Administration (SBA), 90% of U.S. firms have fewer than 20 employees. And considering the current state of unemployment, coupled with the fact that small business creates between 66% and 88% of net new jobs, it’s patently obvious that efforts to stimulate job growth must be focused on this segment of business.

So, Republicans profess support for the little guy, and typically rely on Grover Norquist’s 2008 estimate stating that two-thirds of small businesses would be adversely affected by expiring the cuts for the rich. Asserting their allegiance, Rep. Eric Cantor (R-VA) recently appeared on CNBC to make his case for extending all tax cuts and claimed it was because of the Republican desire to, “commit ourselves to help small business.” Indeed, Douglas Holtz-Eakin, a former Congressional Budget Office director who now runs a Republican think tank, tied it all back to jobs, claiming that the tax increase would reduce small business hiring by 18%.

Of course, all of this is as much nonsense as the Republican spin on tax cuts paying for themselves. In truth, only a small fragment of small businesses would be affected by ending the cuts for those making over $250,000. Tax expert Len Burman put the number at 3% of small businesses that are subject to the top two individual tax rates. The Center on Budget and Policy Priorities set the number even lower, at 1.9%. As it turns out, Norquist’s calculations looked at the percentage of income, not of firms. What he was attributing to the ranks of small business was the wealthiest hedge funds, law firms and lobbying outlets in America.

Fortunately, once the layers are peeled off the onion, the Republican message at least becomes consistent. It’s not small business that they support, not unless you consider multi-million-dollar sole proprietorships or partnerships as small business — just because they have few employees. The sad truth is that Republican support for small business is as ephemeral as their concern over the unemployed. It only lives in the rhetoric they use to justify their policies while hiding their true and undying loyalty to the richest 2% of Americans.

Let all voters wake up and beware. A line has been drawn in the sand. We no longer need to debate the sides based on some nebulous idea of who Democrats and Republicans support. All ambiguity has been removed — the Republican Party supports big business and will gladly sacrifice small business, the unemployed, even the nation if it will increase the profits of their elite minority.

People need to take a serious look at this and ask themselves which side of the line they’re on. And if they make under $250,000 per year and still choose to vote Republican, they need to do so with full understanding that they’re contributing to their own demise.

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Jul 282010
U.S. Defense Spending Per 2010 Budget
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With the economy in tatters, citizens and politicians alike are becoming increasingly concerned about federal deficits and the resulting debt. As recent as last week, apprehension over the deficit was cited by Republicans as the reason to deny the extension of unemployment benefits. Regardless of the fact that real unemployment still sets at 16.5%, and although the denial of the extension would severely impact those affected, the subsistence income for 2.5 million Americans was simply unaffordable. But Republican principles are complex, and where certain federal programs, like assistance for the unemployed or stimulus to create jobs must be sacrificed in deference to the deficit, other expenditures are the exception.

In a clear showing of priorities, Congress sent a message to the American public yesterday when the House approved a $60 billion war-funding bill. The bill was considered under a suspension of the rules, so it required a two-thirds vote. But even though the $10 billion in state aid to help prevent teacher layoffs was stripped, 148 Democrats joined the 160 Republicans voting in favor, and the opposition fell 30 votes short.

This latest event is sure to leave voters who are actually paying attention to wonder just how important the deficit really is. After all, the deficit is the excess of spending over revenue, yet in spite of the loss in federal revenue, Republicans unanimously support the extension of the Bush tax cuts for the upper 2%. And now we know that, when it comes to war spending, disregard for the deficit is evidently a rare bipartisan position. This all begs the question of what the criteria actually are for identifying the significance to be placed on the deficit.

Opinions abound when it comes to explaining the discrepancies apparent in the precedence of issues. Republicans contend that the tax cuts will actually pay for themselves. Of course, they do so in conflict with the near unanimous opinion of economists. They also posit that, so long as the cuts are given to the wealthy, they will create jobs — this too flying in the face of expert opinion and all empirical evidence.

But where the Democrats appear to be more versed and committed to common sense when it comes to tax cuts, the majority somehow seems to find funding of the wars to be compelling. This may present a bit of a dichotomy to many anti-war Democrats, but even many representatives who oppose the war find it difficult to vote against appropriations, feeling that, regardless of a person’s position on the wars, we must support the troops.

This position is understandable, even seemingly admirable, but is it really valid?

The Department of Defense budget for 2010 is $685 billion. Add to this the portions of defense spending carried under other departments: nuclear weapons, under the Department of Energy, counter terrorism, under the FBI, International Affairs, Veterans Affairs, Homeland Security, parts of NASA, and interest on the debt incurred from past wars — and overall defense spending is somewhere around $1 trillion per year. Of this number, the total cost for military personnel is $154 billion.

A closer look at the actual situation in Afghanistan reveals that only $19 billion of the appropriation was slated for “operations,” the bucket that covers the actual costs to deploy military personnel. Recent Pentagon estimates set that price tag at $875,000 per troop. And while military salaries have seen appreciable raises in recent years, it’s obvious that this money is not going to pay the salaries of deployed American military.

In actuality, the costs are just a part of the federal government’s funding of the Military Industrial Complex (MIC). A significant portion of the war funds will obviously be used to pay for support services contractors, the costs for which exceeded investments in equipment for the first time in 2007. In fact, where contractors numbered 1 for each 100 personnel on the battlefield during Desert Storm in 1991, they routinely now account for 50% or more and recently accounted for as much as 39% of the cost.

The fact is that the MIC is about big money, and as such has significant power in Washington. Escalated under President Obama, the MIC now consumes approximately 52% of federal tax revenues. There is obviously no bigger industry draw on the federal budget. And defense contractors get what they want from our Congress.

Military spending is actually a bit of a third-rail in American politics. It provides thousands of jobs and billions in profits for defense contractors, and as a result gains support from workers and corporate profiteers alike. But make no mistake about it, while the deficit is being used to squash investment in infrastructure, energy, education and other job creating programs, it being ignored as we continue to increase spending on defense.

The top seven defense contractors are certainly not hurting for the recession. L-3 Communications Holdings Inc., a contractor providing airborne and network communications recently reported an 11% increase in profits for the first quarter. Northrop Grumman, the nation’s third largest defense contractor, reported their profits up by 21%. General Dynamics, Raytheon, and Lockheed Martin all are all experiencing similar gains.

So, this much we know: the deficit is a grave concern when spending is in support of those most adversely affected by the recession, but it’s merely an inconvenience when it comes to funding the military industrial complex or providing tax relief for the wealthy. It’s sad to state, but given the anecdotal evidence, an impartial observer might conclude that the degree of concern for the deficit depends less on any real fiscal sensibility and more on who the deficit spending will actually benefit.

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Jul 272010
Howard Dean speaking at DNC event
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Howard Dean, former governor of Vermont and DNC chairman, wrote an op-ed piece on Monday where he decried conservative publicity tactics and urged Democrats to stand up for their convictions. Dean cited several recent ploys where “the Fox News Network [had] failed to report the full story or relevant facts.” With regard to instances like the new Black Panthers, Van Jones and the entire Shirley Sherrod fiasco, Dean suggests that, Fox indulged “in race baiting in order to exploit people’s fears and crank up the fringe of their audience.” But Dean’s message isn’t about the evil of these practices; it’s about the appropriate response by Democrats.

According to Dean, Democrats “are not tough enough.” Dean’s prescription for resurgence by the Democrats is to “stand up for what we believe in and stop trying to make deals with people who cannot be trusted to make deals for the good of our country.” Republicans have clearly defined themselves and taken a stand as the party of big business. If the Democrats are to avoid a one-sided loss in November, they’ll be well served to follow Dean’s advice and leave compromise at the altar of progress.

Those who think that supporting incremental change somehow moves the issues forward are sadly mistaken. All that the spirit of compromise does is move the center further to the right. Those Democrats who support this approach are responsible for the pathetic reality we now have where what the Republicans themselves would have passed 30 years ago is now celebrated as a Democratic victory.

Voters need to wake up! So long as they support this dynamic, the line will keep moving to the right. And so long as it moves right, the Republicans will retain power. What’s needed is for the Democrats to truly differentiate themselves — that’s the only way the line will ever be moved left again. Democrats need to fight on principle, EVEN WHEN THEY WILL LIKELY LOSE! This is how a platform is defined, how Democrats can communicate who they are and what they stand for.

The American middle class wasn’t created through compromise; it is being destroyed through it. Obama is compiling a great legislation record, but a brief look at the history will show that Jimmy Carter was responsible for a significant body of legislation too, yet he created the climate where Reaganomics was able to take root. By contrast, FDR took a bold stand and created the middle class.

The climate of our time begs for a little more FDR and a little less Jimmy Carter. FDR has no problem taking a stand as evidenced by the words he shared on election eve 1936:

“We had to struggle with the old enemies of peace–business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob.”

It’s time the Democrats help take government back from “organized money.” And until and unless they take a real stand, they’ll just remain a bunch of Republican supporters who are helping to move all legislation to the right.

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