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To the displeasure of House Republicans, Speaker Nancy Pelosi called the House back into session yesterday. Interrupting their August Recess, Pelosi brought them back to vote on the Education Jobs and Medicaid Assistance Act, which was passed earlier by the House and by the Senate last Thursday. The legislation designed to provide relief to cash-strapped states was approved by a vote of 247-161, almost entirely along party lines.
Voting with Democrats were two Republicans, Rep. Anh Cao (R-LA) and Rep. Michael Castle (R-DE), and joining the Republican opposition were the Blue Dog Southern Democrat coalition, Rep. Bobby Bright (D-AL), Rep. Jim Cooper (D-TN) and Rep. Gene Taylor (D-MS). There were 25 representatives who didn’t return from recess, amongst them were 7 Democrats, including Bay Area Congresswoman, Jackie Speier.
The legislation will send $26.1 billion in relief to the states, of which California is expected to receive $3.1 billion. The bill includes $10 billion in education funding, that according to Department of Education estimates, will save 161,000 teacher jobs nationwide and 16,500 in the Golden State. Also included in the bill is $16.1 billion to go to Medicaid. The Economic Policy Institute estimates that the funding “will save 158,000 jobs, including police officers, firefighters, and health care workers.” The Institute also stresses that over half of these jobs will be in the private sector.
This is without doubt a positive development, right? Well, it should be unless your objective is something other than strengthening the recovery. The jobs that will be saved all belong to people who are likely to spend the money, causing a stimulating effect as the funds are returned into the economy. And saving the jobs prevents additional people from further burdening the economy through unemployment or demand for other social services. So, why are Republicans so set against the bill?
Beyond the annoyance expressed by California Republican, David Dreier, “This special emergency session…is in fact Washington, DC, at its absolute worst,” there are two “substantive” issues raised by Republicans. One, brought to the podium by House Minority Leader Rep. John Boehner (R-OH) is the characterization of the bill as a “bailout.” Of course to put this in perspective, you have to understand that he’s not referring to Wall Street banks, or oil companies or auto makers — John Boehner is talking about the 50 states that form our nation.
Voicing his concern over the expenditure, Boehner asks, “Are we going to bail out states next year and the year after that too?” This deep distress from the same man who supports permanently extending the Bush tax cuts for the rich, at a cost of $678 billion, and then moves around like he’s on Dancing with Stars when asked how the cuts would be offset. It’s not about the deficit for Boehner and the Republicans — it never has been. It’s all about who foots the bill.
The Republicans have fought against this Jobs Bill, even though it’s completely paid for and was actually found, by the Congressional Budget Office (CBO), to save $1.4 billion over 10 years. So, if the issue isn’t really deficits, what is it?
As sad as the commentary may be, the reason lies in the other “substantive” objective voiced by Republicans. They have some serious issues with how the bill is financed. Where Democrats see the $9.8 billion offset from closing loopholes that encourage corporations to ship jobs overseas as a positive, Republicans, like John Boehner, call it a “job-killing tax hike.” Of course, to Boehner, anything that reduces corporate profits is a negative, and anything that goes to what he calls “special interests” — teachers, police, firefighters — is just not affordable.
Also caught in the efforts to pay for the bill is an $11.9 billion cut to food stamps, which fortunately won’t go into effect until 2014. The plan is to just allow the increases provided under the ARRA to expire on schedule. It may be a lot to ask for, but with a little Republican help in place of obstruction, the funding could be restored by the time it’s needed or perhaps a real recovery could occur thereby obviating the need. At any rate, it seems a fair political trade-off in order to get the support to pass the bill.
The only real negative surrounding this bill is the fact that the help it provides is unsustainable. This legislation will not create many new jobs, nor will it address any inefficiency inherent in state and local government or their education systems. But these issues are structural and beyond the scope of stop-gap aid legislation. The bill does, however, provide temporary relief to help ease the burden on states and provide additional time to establish more long term solutions.
If there’s actually any real interest amongst Republicans to create good paying jobs for Americans, then they will drop their single-minded focus on preventing economic recovery — even if it weakens their chance in the November election. Should that be the case, they can start when they return in September, by dropping their two-month long filibuster against the Small Business Jobs and Credit Act and allowing it to provide money and incentives to those businesses they claim to support.

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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.







