Paul Begala:What's Mitt Romney Hiding in His (ECONOMIC) Record as Governor 30APR12 & Economy added 115,000 jobs in April; unemployment rate fell to 8.1 percent 4MAI12

mitt romney will make much of the report from the Dept of Labor today, but he isn't going to discuss his economic record in Massachusetts because it was anything but a miracle. This from The Daily Beast.....

What’s Romney hiding in his record?

Jae C. Hong / AP Photos

In his speech on April 24 kicking off his general-election campaign, Romney began, sensibly enough, by promising to tell us a little bit about himself. He bragged about his picture-perfect family. He spoke with pride of how his father had lifted himself from struggling salesman to CEO and governor. Then he recounted his time as a businessman, helping build companies like Staples and Bright Horizons. Finally, he launched into how Barack Obama couldn’t organize a one-car parade and how he (Romney) would make a much better president.

Wait a minute, Mitt. You missed something. Family: check. Wealth: got it. Gonna be a keen president: right. Wasn’t there something else on the résumé? Oh, yeah: Mitt Romney served as governor of Massachusetts.

It’s weird. Most governors who seek the presidency can’t shut up about how great their states are. Right now, there’s an even-money chance that Bill Clinton is telling someone that Hope, Ark., produces the biggest, juiciest watermelons in the world. But not Mitt. In the most important speech of his presidential campaign thus far, he ignored the only time he has ever held public office.

That is a mistake. Romney should be defining his record in Massachusetts before his opponents can define it for him. Two days before Romney’s kickoff speech, appearing on NBC’s Meet the Press, Obama strategist David Axelrod began carpet-bombing the Massachusetts record, noting that Romney is touting his business acumen, but also that he did the same when he ran for governor. “He said, ‘I’m going to get the economy moving again. I’m a businessman. I know how to create jobs.’ [The state] went from 37th in the nation in job creation to 47th in the nation in job creation. So we’ve tested the Romney acumen when it comes to creating jobs, and he’s been found wanting.”

Perhaps that’s why Romney doesn’t dwell on his record as governor. His state really was 47th in job creation, behind only Ohio and Michigan, both of which were being ravaged in the manufacturing meltdown, and Louisiana, which had been devastated by Katrina. Romney even trailed Mississippi and Alabama in job growth, breaking the iron law that Mississippi and Alabama have to be last in pretty much everything except cockfights and kissin’ cousins. While the country as a whole enjoyed 5 percent growth, Romney’s Massachusetts grew at 0.9 percent.

It wasn’t supposed to be that way. Romney sold himself to the voters as a turnaround artist—a CEO who could lure jobs to the Bay State. He pledged to use his business skills to “encourage businesses to come grow and thrive in the most robust portion of the economy, Massachusetts.” Not so much.

Romney’s economic failure in Massachusetts is especially problematic because the central premise of his presidential campaign is the same as it was when he ran for governor: that he can apply his business skills to our economic problems. Massachusetts was the guinea pig for Romney economics. The results weren’t pretty. In addition to almost zero job growth, the state saw a modest decline in real median income, meaning that the folks who had jobs were bringing home less.

Romney did close the $3 billion budget gap he’d inherited (although he then left a projected shortfall of up to $1 billion). The methods he used are instructive. He slashed higher education, cut revenue to local governments, and raised fees on everything from college students to mortgages, from buying a boat to opening a bar.

Romney’s cuts to education and job training were especially severe. Fees for university students shot up 63 percent as Romney hammered college funding. Robert Karam, former chair of the UMass Board of Trustees, was a Romney backer. But no more. “I think higher education really stood still” under Romney, he has said. Romney even annoyed the business community—his core constituency—by cutting job training, workforce development, and trade assistance.

The Romney recipe of cutting education and job training, forcing higher fees on the middle class, and protecting the rich from tax hikes didn’t work in Massachusetts. But his approach to health care did. Paradoxically, the best thing Romney did as governor—and it was a great thing—is the one thing he dares not talk about as a presidential candidate. Too bad, because a solid 62 percent of the folks who actually live under Romneycare—and its dreaded individual mandate—say they like it.

The Romney record in Massachusetts suggests that Romney’s campaign has it backward: instead of talking up jobs and running away from health care, Mitt ought to be bragging about Romneycare and avoiding scrutiny of the one time his economic theories were actually put to the test.

Like The Daily Beast on Facebook and follow us on Twitter for updates all day long.
Paul Begala is a Newsweek/Daily Beast columnist, a CNN contributor, an affiliated professor of public policy at Georgetown, and a senior adviser to Priorities USA Action, a progressive PAC.
http://www.thedailybeast.com/newsweek/2012/04/29/paul-begala-what-s-mitt-romney-hiding-in-his-record-as-governor.html

Economy added 115,000 jobs in April; unemployment rate fell to 8.1 percent

By Peter Whoriskey

The unemployment rate dropped a notch to 8.1 percent in April, the Labor Department reported on Friday, but the pace of job growth has fallen off, amid other signs that the economic recovery may be losing momentum.
The economy added 115,000 payroll jobs last month, a meager showing compared with earlier this year when the jobs tally was rising at twice that rate and sowing optimism about the nation’s economic prospects.
Some of the most quoted figures from the jobs report suggested good news. The unemployment rate dropped to 8.1 percent in April from 8.2 percent the month before, and the number of unemployed people declined to 12.5 million from 12.7 million.
But at least part of the reason for the decline in the ranks of unemployed is that many people decided to stop looking for a job. People who have stopped looking for work are no longer counted as unemployed.
The labor force, defined as the number of people working or seeking work, declined by 342,000 in April, Labor Department said.
“The decline in the unemployment rate is principally because a lot of people gave up looking for a job in April,” said Paul Ashworth, chief U.S. economist for Capital Economics. “The economy has created so few jobs that people are disillusioned with trying to find a job and they’ve just given up.”
The number of long-term unemployed, those who’ve been out of work for 27 weeks or more, was little changed at 5.1 million in April. That group makes up more than 40 percent of the jobless rolls.
The unemployment numbers, which may be the most closely watched economics barometer to come to bear in the presidential election, were seized upon by presumptive Republican presidential nominee Mitt Romney, who called Friday’s report “terrible and very disappointing.”
Romney suggested that job growth in a recovery should be closer to 500,000 jobs a month.
“This is way, way, way off from what should happen in a normal recovery,” Romney said on Fox News. “It’s a terrible and very disappointing report this morning.... We seem to be slowing down, not speeding up. This is not progress.”
Yet an economy that is consistently adding 500,000 jobs a month has rarely been achieved in U.S. history, according to Labor Department figures. Over the last 20 years, there have been only two months - once in 1997 and 2010 - when the economy added nonfarm payroll jobs at that rate.
Over the last 20 years, the average annual monthly growth in those payroll jobs has been about 200,000.
“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression, but much more remains to be done to repair the damage caused by the financial crisis and the deep recession,” Alan B. Krueger, Chairman of the Council of Economic Advisers, said in a statement.
Stock prices dropped with the news of the jobs report. The Dow Jones industrial average was down 56.91 points, or 0.43 percent.
While the month of April falls well short of the trend that economists would like to see, Krueger and other analysts suggested that taking a broader view, the recovery seems healthy.
Over the last four months, the number of nonfarm payroll jobs has climbed 200,000 a month on average.
Economists attributed at least part of the recent fall-off in April to the good weather in January and February: Employers hired people then, boosting the numbers for January and February but depleting them in March and April, which have show relatively weak reports.
The 200,000 average monthly job gains “is actually not a bad jobs number,” Ashworth said. “There’s no reason to think the economy just fell of the rails.”
In April, employment rose in professional and business services, retail trade, and health care. Transportation and warehousing lost jobs over the month.
Staff Writers Philip Rucker, Amy Gardner and Ed O’Keefe contributed to this report.
http://www.washingtonpost.com/business/economy/economy-adds-115000-jobs-in-april-unemployment-rate-drops-to-81-percent/2012/05/04/gIQAjdq70T_story.html?hpid=z1

Defense procurement problems won’t go away 2MAI12

THIS system will never be fixed because the military-industrial complex doesn't want it to be fixed. The federal deficit be damned, fixing the Defense procurement problems will cut into their obscene corporate pay and compensation packages and profit margins. And don't forget the employment future of the politicians they they have bought and paid for, after all, they can't be expected to retire on their Congressional pensions, they want their cut of the fraud, waste, and cost overruns they directed to the these contractors. This entire system is corrupt, if it wasn't it wouldn't have survived intact after the Packard Commission report. 

By Walter Pincus
In June 1986, after a year-long investigation, then-President Ronald Reagan’s Blue Ribbon Commission on Defense Management — later known as the Packard Commission — filed a final report.
It was established to investigate Pentagon procurement after an enormous increase in defense spending and the discovery of the infamous $435 hammer and $600 toilet seat. The panel was chaired by David Packard, co-founder of Hewlett-Packard Co., and deputy defense secretary in the Nixon administration.
Its declaration: “The Department of Defense’s acquisition system continues to take longer, cost more and deliver fewer quantities and capabilities than originally planned.” Among causes listed were “stifling burdens of regulation, reporting and oversight.”
Last month, a Defense Business Board task force, established a year ago by the vice chairman of the Joint Chiefs of Staff, Adm. James A. Winnefeld Jr., reported exactly the same “unacceptable” finding. The task force conclusion came after a study that included 221 interviews and review of 300 past studies and commission findings.
Its declaration: The Defense Department “acquisition system continues to take longer, cost more, get less and oftentimes not what is needed.”
What can be more boring than reading about yet another set of recommendations for fixing a system that over the past decade has seen the Defense Department flooded with funds. It’s been so flush that it could walk away from $50 billion worth of “weapons that either did not work or were overtaken by new requirements given the average 15-to-18 year development cycle,” according to the Punaro task force report.
And — yawn — the overruns are hardly over. This is in spite of the need to reduce defense spending. More yawn-inducing reality: The Government Accountability Office recently reported current major weapons systems will show a cost growth of $135 billion before they are fully integrated into the system.
Boring and frustrating. It was time to do something 26 years ago. The only major lasting memorial to the Packard Commission is its recommendation for an undersecretary of defense for acquisition. The Pentagon has had one since that time, but the problems remain.
“Today there is no rational system whereby the Executive Branch and the Congress reach coherent and enduring agreement on national military strategy, the forces to carry it out, and the funding that should be provided — in light of the overall economy and competing claims on national resources.”
This was the Packard Commission more than two decades ago. The same idea is in the Punaro report. The task force was chaired by Arnold Punaro, a former long-time top staff member of the Senate Armed Services Committee, director of SAIC Inc., a defense contractor, and a retired Marine Corps Reserve major general.
But no one is going to read the report. Its title alone is a snoozer: “Linking and Streamlining the Defense Requirements, Acquisition, and Budget Processes.”
Of course, it should be read, but let’s face it: There’s nothing sexy about a subject that drains billions from the budget.
Of the fiscal 2013 Defense budget, some $400 billion is for procurement, research and development, goods and services, according to the Punaro study.
The Pentagon carries out some 1,200 contracting activities from building ships to cutting edge technologies to consumables, services, repair parts and day-to-day needs.
Some 152,000 military and civilian personnel work in acquisitions, including 30,000 contract officials and another 16,000 in program management.
Yawn. Yawn. Yawn.
No one could provide the task force the number of contractors supporting these people though the Defense Department’s “best guesstimate is roughly 766,000 contractors at a cost of about $155 billion,” according to the Punaro report. The handbook for acquisition officers is 962 pages, and federal acquisition regulations runs over 4,000 pages.
The Punaro task force’s first recommendation: “Zero base the entire system, including all directives and regulations.”
At the heart of that suggestion is the conclusion that procurement’s three processes are broken — the military set requirements, followed by an essentially civilian-directed acquisition, along with a hybrid budgeting system to pay for it.
The Punaro Task Force proposed that requirements, acquisition and budgeting be merged with a common documentation throughout. It also recommended requirements be frozen, after cost, schedule and technical tradeoffs have been made. Industry is to be brought early into the process, and the current wall between military requirements and civilian-controlled acquisition should be removed. Service chiefs should be involved throughout the process.
Still awake? We all should be — and particularly Congress.
“Congress should work to recodify all federal statutes governing procurement into a single government-wide procurement statute ... aim[ed] not only at consolidation, but more importantly at simplification and consistency.”
That’s the Packard Commission from 26 years ago.
It’s time to pay attention.
http://www.washingtonpost.com/world/national-security/defense-procurement-problems-wont-go-away/2012/05/02/gIQAyQNvxT_print.html

 

ALLEN, JOHNSON AT ODDS OVER EARMARKS 20APR12

george allen continues his propaganda campaign in an attempt to deceive, mislead and flat out lie about his fiscal record as governor of Virginia and as a US Senator from Virginia. He is against earmarks and proud of all the earmarks he got for Virginia. He says legislators should publicly claim their earmarks and then refuses to do so. He claims to have reigned in spending in Richmond while increasing it over 45%. And now he has famed earmark hunter Sen ron johnson r WI coming to campaign for him. We know allen is a liar, it is interesting Sen johnson is willing to put his reputation on the line with this endorsement. One can only conclude they are birds of a feather. This from Tim Kaine's campaign......
As Anti-Earmarker Ron Johnson Visits VA, Will George Allen Explain What Made Him So "Proud" Of "Every Single Earmark" He Sponsored As A Senator?

Richmond, VA - Just one week ahead of his first primary debate with Tea Party challengers Radtke, Jackson, and Marshall, George Allen is trotting out Tea Party darling Wisconsin Senator Ron Johnson.  As a Senator, Johnson co-sponsored the "Earmark Elimination Act of 2011" -- making his visit to Virginia today to campaign with 'proud' Senate earmarker George Allen even more awkward.  Johnson's endorsement is just the latest attempt by George Allen to disguise a career-long record of big spending.

"No amount of elbow-rubbing from the Tea Party will erase the $3 trillion George Allen added to our national debt or the tens of thousands of earmarks he supported as a Senator," said Kaine for Virginia Communications Director Brandi Hoffine.  "Time and again, George Allen has promised Virginians that he would govern as a 'fiscal conservative.' But instead, he grew spending by more than 45 percent as Governor and turned a record surplus into a record deficit as Senator.  Now, he's campaigning for reelection on the same hypocritical rhetoric of fiscal responsibility, but Virginians aren't buying it.  In fact, the harder George Allen tries to rewrite his fiscally reckless record, the more obvious it is that he helped create our economic problems during his last term in the Senate and has no solutions to fix them.

"There's only one candidate in this race with a proven record of balancing budgets and cutting spending, and that's Tim Kaine."

Johnson's rescue mission to Virginia to help excite conservatives who aren't buying Allen's claims of fiscal conservatism must be particularly embarrassing for Allen who likes to call himself the "original tea partier."

Background:

ALLEN'S EARMARK HYPOCRISY

March 2006: Allen Said, “Every Single Earmark I’ve Gotten, I’m Proud Of;” Allen Said Legislators Who Attach Earmarks Should Be Identified.PolitiFact reported, “Allen clearly sought pork for Virginia. ‘Every single earmark I’ve gotten, I’m proud of,’ he told a town hall meeting in Chesterfield County on March 20, 2006, according to a Richmond Times-Dispatch article. Allen said then that legislators who attach earmarks to appropriations bills should be identified.” [PolitiFact, 4/18/12]
• A Few Months Later, Allen Refused To Identify Earmarks He Requested In Fiscal Year 2006.  PolitiFact reported, “A few months later, Allen and other members of Virginia's congressional delegation refused cooperate with a Times-Dispatch reporter’s request to identify the earmarks they requested during fiscal 2006.” [PolitiFact, 4/18/12]
2012: Allen’s Current Position Is That There Should Not Be Earmarks Until The Budget Is Balanced. PolitiFact reported, “In this year’s campaign, Allen is calling for a ban on earmarks until the federal budget is balanced. Afterwards, earmarks would require a two-thirds majority.” [PolitiFact, 4/18/12]
• Allen Helped Turn A Surplus Into A Deficit In His Very First Full Fiscal Year In The Senate. [Office of Management And Budget, Historical Data]
April 2012: Allen Said Earmark Sponsors Should Be Identified, Acknowledged That “Surreptitious” Earmarking Was A Problem In The Past. On the Leland Conway Hour, Allen said, “I don’t think there ought to be any earmarks whatsoever until you get to a balanced budget and then there should be a 2/3rds vote for earmarks. And there ought to be the, obviously, the transparency. If there’s an earmark, a Member should put their name associated with it rather than making it surreptitious approach of earmarking, which was one of the problems previously.” [Leland Conway Hour, WRVA 1140AM, 4/19/12]

JOHNSON HAS WORKED TO END EARMARKS

Johnson Cosponsored The Earmark Elimination Act of 2011 On January 30, 2012. [S.1930, Cosponsored on 1/30/12]

Johnson Co-Sponsored DeMint’s Resolution On Earmarks, Saying "As I Promised During My Campaign, I'll Vote For The Elimination Of Earmarks Every Opportunity I Get.”On his campaign website, Ron Johnson said, "As I promised during my campaign, I'll vote for the elimination of earmarks every opportunity I get and am pleased to co-sponsor Senator DeMint's resolution. I'm looking forward to the orientation sessions next week as an opportunity to begin learning the rules of the institution so I can be effective for Wisconsin.” [Ron Johnson For Senate Blog Post, 11/12/10]
• Johnson On Helping To Stop Earmarks: "This Is An Important Signal To The American Public That We Are Serious About Restoring Fiscal Sanity To This Nation."[Wisconsin State Journal, 11/18/10]
ALLEN CALLS HIMSELF 'ORIGINAL TEA PARTIER'

Allen Claimed He Was “The Original Tea Partier” During A Radio Interview. According to WMAL, Allen claimed he was “the original Tea Partier” in an interview: “Former Virginia Senator George Allen wrapped up the first day of his campaign to regain the seat he lost to Democrat Jim Webb in 2006 with an extensive interview on the Mark Levin Show on 630 WMAL.  The interview covered a broad range, from Allen's contention that he is 'the original Tea Partier' to his legacy as the son of a Redskins football legend, to his analysis of the upcoming Super Bowl between the Steelers and Packers.”  [WMAL, 1/25/11]

ALLEN HAS LONG HISTORY OF FISCAL IRRESPONSIBILITY; HELPED CREATE OUR CURRENT ECONOMIC MESS
  PolitiFact: As Governor, Allen Increased Spending 45.6%; His Claim That He Reined In Spending Rated “False.” In September 2011, PolitiFact Virginia wrote, “The general fund was almost $6.8 billion when Allen took office. At the end of his term, he proposed a $9.9 billion general fund budget for the fiscal year beginning July 1, 1998. That means Allen endorsed $3.1 billion in additional general fund spending when he was governor -- a 45.6.percent rise. . . . Our ruling: Allen takes credit for ‘reining in state spending’ when he was governor. . . . We rate the statement False.” [PolitiFact Virginia, 9/12/11]

Allen Took America's Largest Budget Surplus And Turned It Into A Record Federal Deficit. When George Allen took office in the United States Senate in January 2001, “the federal budget surplus for fiscal year 2000 amounted to at least $230 billion, making it the largest in U.S. history,” according to CNN. By July 2003, after Allen was in office for only two years, the budget deficit had already hit a record $455 billion. [CNN, 9/27/2000; Chicago Tribune, 7/16/03]

As Senator, Allen Voted For Every Appropriations Bill That Came Up, Adding Over $3 Trillion To The National Debt. PolitiFact Virginia wrote, “Under the budgets approved during Allen’s term, debt climbed by $3.202 trillion. Congress sets budgets through a series of appropriations bills, and Allen supported all of the roughly four dozen bills to hit the Senate floor during his term. . . . Radtke said debt increased by $3 trillion during Allen’s Senate term, a figure equal to $16,000 per second. The actual figures were $3.202 trillion, or $16,896.68 per second.”  [Richmond Times-Dispatch, “PolitiFact Virginia,” 4/15/11]

Allen Voted for Every Deficit-Growing, Budget-Busting Bush Budget. [Vote 74, 3/16/06; Vote 363, 12/21/05; Vote 114, 4/28/05;  Vote 58, 3/12/04;  Vote 134, 4/11/03; Vote 98, 5/10/01; Vote 86, 4/6/01]
http://www.kaineforva.com/news/allen_johnson_at_odds_over_earmarks#When:17:04:23Z

 

Most Red States Take More Money From Washington Than They Put In 16FEB12

JUST like the article states, those who are complaining the most about government spending are getting the most in federal funding (click the link to the article at the bottom of this post to view the interactive maps). This from Mother Jones.......

Even as Republicans gripe about deficit spending, their states get 30 cents more federal spending per tax dollar than their Democratic neighbors.

—By Dave Gilson

States receiving the most federal funding per tax dollar paid:
1. New Mexico: $2.63
2. West Virginia: $2.57
3. Mississippi: $2.47
4. District of Colombia: $2.41
5. Hawaii: $2.38
6. Alabama: $2.03
7. Alaska: $1.93
8. Montana: $1.92
9. South Carolina: $1.92
10. Maine: $1.78

It's no secret: The federal budget is expanding faster than tax revenues, a trend that's been fueled by the rapid growth of entitlement programs and exacerbated by the recession. As a recent New York Times article documents, even as fiscally conservative lawmakers complain about deficit spending, their constituents don't want to give up the Social Security checks, Medicare benefits, and earned income tax credits that provide a safety net for the struggling middle class.
This gap between political perception and fiscal reality is also reflected in the distribution of tax dollars at the state level: Most politically "red" states are financially in the red when it comes to how much money they receive from Washington compared with what their residents pay in taxes.
A look at 2010 Census and IRS data reveals that the 50 states and the District of Columbia, on average, received $1.29 in federal spending for every federal tax dollar they paid. That means that some states are getting a lot more than they put in, and vice versa. The states that contributed more in taxes than they got back in spending were more likely to have voted for Obama in 2008 and were more likely to be largely urban. (There are some clear exceptions: For instance, New Mexico, a rural, Democratic state, gets more federal money per tax dollar than any other state.)
These three interactive maps break down the split between the spenders and lenders. Click on any state for more detailed data, including each state's per capita ratio of spending received versus taxes paid and where it ranked when the Tax Foundation ran the 2005 numbers.

 Red states were more likely to get a bigger cut of federal spending. Of the 22 states that went to McCain in 2008, 86 percent received more federal spending than they paid in taxes in 2010. In contrast, 55 percent of the states that went to Obama received more federal spending than they paid in taxes. Republican states, on average, received $1.46 in federal spending for every tax dollar paid; Democratic states, on average, received $1.16.

This red-blue split may be partly explained by the difference between urban and rural states. Red states are more likely to be rural, and rural states were more likely to receive more federal spending than they paid in taxes in 2010. Among predominantly rural states, 81 percent received more federal spending than they paid in taxes. In contrast, 44 percent of urban states received more federal spending than they paid in taxes. Rural states, on average, received $1.40 in federal spending for every tax dollar paid; urban states, on average, received $1.10. (Rural states are defined as states whose urban population rate is below the national average of 79 percent.)

Note: Data has been adjusted to be deficit neutral using the method described by the Tax Foundation in its earlier analysis of federal spending versus federal taxes paid.
Sources: IRS (state tax data), Tax Foundation (2005 rank of spending vs. taxes), US Census (federal spending, urban/rural)
Front page image: Wikimedia Commons

Dave Gilson

Senior Editor

Dave Gilson is a senior editor at Mother Jones. Read more of his stories, follow him on Twitter, or contact him at dgilson (at) motherjones (dot) com. RSS | Twitter

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KAINE RELEASES ECONOMIC AGENDA TO STRENGTHEN ECONOMY, CREATE JOBS AND EMBARKS ON TWO WEEK TOUR OF VA 4APR12

TIM KAINE has released his economic agenda which he will pursue when he is elected Senator from Virginia (we have to be positive about his election). Below is a brief outline, click the link for more information and detail.
Richmond, VA – Tim Kaine released his economic agenda today as he embarked on a two-week tour of Virginia. The roadmap includes strategic initiatives to grow businesses and encourage job creation, develop a talented workforce, and balance the budget by finding common ground on spending cuts as well as investments that will generate new revenue.

“As the global competition increases, we must act now to equip businesses with the tools they need to create jobs, develop a strong and talented workforce, and address our fiscal challenges by finding common ground,” said Governor Kaine. “We can no longer let politics get in the way of what’s best for our economy and this vision lays out a roadmap for our future economic success.”

U.S. Senator Mark Warner will join Kaine today to discuss: Infrastructure development strategies for increasing exports at the Port of Virginia in Norfolk, small business growth and access to capital at a business in Northern Virginia, and using a balanced approach to allow for strategic investment in education with teachers and parents at Richmond’s Maggie Walker Governor’s School.

Kaine's vision for our economic future includes three key initiatives:
Grow Business, Grow Jobs: Kaine believes targeted investments and policies can support our businesses and spur job creation by increasing access to capital, and leveling the playing field by addressing an unfair tax code that is over burdensome for small businesses. In addition, strategic investments in infrastructure are critical to ensuring our roads, airports, port, and railways are able to support Virginia in a global economy. During Kaine’s term as Governor, Virginia was named the Best State for Business four years in a row and through his work, Virginia attracted companies to the Commonwealth including Meadwestvaco, Hilton, CSC, SAIC, and VW of North America.

Build a Talent Economy: In order to develop the most talented workforce in the world, Kaine states we need a long-term policy that supports investments and smart reform in education, from early development like Pre-K to higher education and workforce development. Kaine supports policies that increase college affordability and elevate the importance of career and technical education. During Kaine’s term as Governor, he passed the largest higher education construction bond package in Virginia history and expanded pre-K enrollment by nearly 40 percent.

Balanced Budget, Balanced Politics: In order to close the federal deficit and pay down the national debt, Kaine recommends a balanced approach that would raise revenues by closing lobbyist-driven loopholes and allowing tax cuts for the wealthiest Americans to expire, while making strategic cuts. As Governor, Kaine cut more than $5 billion in state spending and reduced the size of the general fund, but left room for important investments in areas like education that were critical for future growth.

To view the full economic plan, click here.

Newt Gingrich Campaign Vendors Wonder If They'll Ever Get Paid 11APR12

newt gingrich(k) rails about excessive government spending, fiscal responsibility and the national debt and yet is leaving a trail of unpaid campaign bills in his wake. Shows what kind of president he would be.....

WASHINGTON -- For a long time, Larry Scheffler maintained a hard policy at his Nevada printing company: no credit for politicians. But when a friend called on behalf of GOP presidential hopeful Newt Gingrich In January, saying the candidate needed signs for the upcoming Nevada caucus, Scheffler made an exception.
"They said they were going to pay right away," Scheffler, 61, said in an interview.
Scheffler's company, Las Vegas Color Graphics, produced a trove of campaign materials for Gingrich: 5,000 rally signs, 5,000 bumper stickers, 5,000 lapel stickers, 5,000 cards targeting Hispanic voters, and nearly 100 yard signs. The tab came to $7,439.62.
But more than two months after the caucus, Scheffler is still waiting for the check. "We got burned," he said.
Like all the GOP presidential hopefuls, Gingrich has cast himself as a champion of small businesses, promising tax relief to American entrepreneurs and a deregulation plan that will spur job growth. But some small businesses are less than pleased with the former House speaker's presidential campaign -- in particular, some of the vendors who have performed work for it. Last month HuffPost reported how Gingrich was ramping up an expensive campaign even as he was running out of money and flagging in the polls. The loose spending should come as little surprise: Gingrich was trailed by 30 years' worth of debts, lawsuits and bankruptcies leading into the campaign.
In interviews with HuffPost, many vendors listed in Gingrich's Federal Election Commission debt disclosures said they're still waiting to be paid, weeks or months after finishing work. Several said they've been given the runaround by campaign officials as they've tried to collect. Gingrich has vowed to slog on with his debt-ridden campaign, despite having won a mere 136 delegates, leaving some vendors to wonder when they can expect their checks.
Gingrich campaign spokesman R.C. Hammond told HuffPost that Newt 2012 is doing its best to pay people. "Vendors have been contacted and we are paying bills as swiftly as we are able," Hammond said.

Gingrich said Sunday that his campaign is "slightly less" than $4.5 million in debt, adding that he dipped into "personal funds" to help keep Newt 2012 moving "on a shoestring."
"We owe much more than we wanted to," Gingrich said on Fox News Sunday. "Florida got to be a real brawl. And I think, unfortunately, our guys tried to match Romney and it turned out we didn't have anything like his capacity to raise money."
Though Gingrich has long held himself up as a paragon of fiscal responsibility, vendors that include Noiseworks Media have found that the former speaker's campaign is apparently spending money it doesn't have. Based in Coral Gables, Fla., Noiseworks produced a handful of television and radio spots for the campaign, in English as well as Spanish, that aired in Florida and Arizona leading up to those primaries. Disclosure forms peg Gingrich's debt to Noiseworks at $10,500, but the firm's director, Tere Gutierrez, said the tab is closer to $24,000. The firm fronted nearly half of that money to actors, makeup artists and other contractors that the firm needed for the production, Gutierrez said.
"It's unusual that we don't get paid -- politicians are usually very good at that, they pay immediately," said Gutierrez. But with the Gingrich campaign, "It's getting from bad to worse. ... It's a lot of running around, 'We're going to get to you, we're going to do a payment plan.' We're calling and emailing, calling and emailing, every day. And nothing."
According to Gutierrez, Noiseworks had the choice to work for either Gingrich or frontrunner Mitt Romney. But like Larry Scheffler's printing company, Noiseworks decided to do business with Gingrich because of a personal connection.
Nobody had to pull strings to get Gregory Fournier doing work for the Gingrich campaign. The president of Florida-based political consulting firm Insite Political, Fournier also happened to be a Gingrich campaign chairman for Volusia County, home to Daytona Beach. Fournier happily performed roughly $5,000 of work for Newt 2012, having signs made for a Florida event and obtaining voter data for the Sunshine State's primary. But getting paid was like "going to war," Fournier said.
"At first it was, 'Well, they sent out the check, it went out in today's mail.' Then, 'The check was pulled. You have to contact the campaign manager.' He never returned any emails," said Fournier. "Luckily, I saved every single document of the state committee people asking me for stuff."
Fournier was eventually paid in full about a month ago, but the experience left him with a bad taste. Adding further insult, he'd made a $2,500 donation to the campaign. He figured all of his support would maybe warrant a handshake, an autographed book or a thank-you, but he said he never got to meet the former speaker. Even so, he still supports Gingrich.
"It's not the speaker -- I believe in the speaker," Fournier said. "I think logistically his campaign was a mess."
Not all the vendors reached by HuffPost had bad experiences with Newt 2012. Daniel Coats, the president of Red Cyclone, a Georgia-based company that produces campaign materials for conservative candidates, said the campaign paid him promptly. "They made good on everything," Coats said, though he also noted, "Our policy is we don't ship until we receive payment."
Angel de la Portilla, an Orlando-based political consultant, didn't have such a policy. He said the Gingrich campaign owes him $6,000 for setting up events with Hispanic voters ahead of the Florida primary. (The campaign reported to the government that it owes de la Portilla $3,840.)
"I have not yet been paid," de la Portilla said. "I have been told numerous times by different people at the senior level of the campaign that I would be paid. I got an email telling me the check was in the mail."
It turned out the check wasn't in the mail. "It's just disappointing they way it's being handled," de la Portilla said.
Gingrich's campaign bounced a $500 check last month for the fee to qualify for the Utah ballot, reports the Salt Lake Tribune. The campaign has not responded to the state's calls and a certified letter, according to the report. The campaign has until April 20 to pay the fee or Gingrich won't be on Utah's June 26 ballot.
Some vendors may never get paid. Given that the campaign has little in the way of assets, Gingrich would likely need to either pay out of his own pocket or raise enough money from donors to settle the campaign's debts. Raising money becomes less likely as Gingrich's presidential hopes diminish. Vendors can wait years for a campaign to settle up. Former presidential candidate John Glenn famously took 23 years to pay off the roughly $3 million he ran up in campaign debt in 1984.
Gingrich on Tuesday vowed to continue his campaign in the wake of Rick Santorum's departure. "I am committed to staying in this race all the way to Tampa so that the conservative movement has a real choice," Gingrich said in a statement.
Scheffler, head of the Las Vegas printing company, said his firm has 150 employees and about $30 million in annual sales from printing and mailing political signs.
"It’s not gonna shove us down," he said of the Gingrich campaign debt. "It just really makes me mad they got the better of me when I knew better."
Scheffler said he'd been calling three different Gingrich campaign officials about the debt, but none have gotten back to him in weeks. On Tuesday morning he saw a clip of Gingrich on Fox News, insisting his campaign wasn't going to end. "I am not conceding to Gov. Romney," Gingrich said in the clip, taped the previous evening.
Scheffler was not impressed. "I can't believe he's talking like this with all the money he owes and he couldn't care less about the small businesses he's ripping off."
Tuesday afternoon, Scheffler said he reached Gingrich on the candidate's mobile phone and said he wanted to be paid. "He said, 'We really ran behind when we were in Florida. I'll try to scrape up some money to get you paid.'"
Scheffler said Gingrich hung up without taking down details of the debt.
http://www.huffingtonpost.com/2012/04/11/gingrich-campaign-vendors-paid_n_1416084.html 

$0 IN FEDERAL INCOME TAX 5APR12

LET your Representative and Senators know you expect them to pass the Buffett Rule. Democracy is not a spectator sport so all Americans should contact their Senators http://www.senate.gov/general/contact_information/senators_cfm.cfm 
and their Representative https://writerep.house.gov/writerep/welcome.shtml
and tell them you want the Buffett Rule passed, NOW.

$0 in Federal Income Tax In 2009, 1,470 millionaires paid $0 in federal income tax. Meanwhile, millions of middle class families paid their fair share in taxes—funding things like education, our military, and health care for seniors. That's why President Obama proposed the Buffett Rule, so that no household making more than $1 million each year pays a smaller share of their income in taxes than a middle class family pays. Find out more about the Buffett Rule:

Passing the Buffett Rule so that Everyone Pays Their Fair Share (CONTACT CONGRESS) 31MAR12

THE Pres is calling on Congress to pass the Buffett Rule, cutting the tax breaks of the wealthy 1% so they pay their fair share. Here is his weekly address, video and transcripts. And because democracy is not a spectator sport he is calling on all Americans to contact their Senators http://www.senate.gov/general/contact_information/senators_cfm.cfm 
and their Representative https://writerep.house.gov/writerep/welcome.shtml
and tell them you want the Buffett Rule passed, NOW.

The White House

Office of the Press Secretary

For Immediate Release

March 31, 2012

WEEKLY ADDRESS: Passing the Buffett Rule so that Everyone Pays Their Fair Share

WASHINGTON, DC— In this week’s address, President Obama calls on Congress to pass the Buffett Rule, a principle of fairness that ensures that millionaires and billionaires do not pay less in taxes as a share of their income than middle class families pay.  The President believes our system must ask the wealthiest to pay their fair share, while protecting 98 percent of Americans from seeing their taxes go up at all. That is why the President proposed the Buffett Rule, which will help make our system reflect our values so that all Americans get a fair shot, play by the same rules, and pay their fair share.

Remarks of President Barack Obama
Weekly Address
The White House
March 31, 2012

Hello.
Over the last few months, I’ve been talking about a choice we face as a country.  We can either settle for an economy where a few people do really well and everyone else struggles to get by, or we can build an economy where hard work pays off again – where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same rules.  That’s up to us.
Today, I want to talk to you about the idea that everyone in this country should do their fair share.
Now, if this were a perfect world, we’d have unlimited resources.  No one would ever have to pay any taxes, and we could spend as much as we wanted.  But we live in the real world.  We don’t have unlimited resources.  We have a deficit that needs to be paid down.  And we also have to pay for investments that will help our economy grow and keep our country safe: education, research and technology, a strong military, and retirement programs like Medicare and Social Security.
That means we have to make choices.  When it comes to paying down the deficit and investing in our future, should we ask middle-class Americans to pay even more at a time when their budgets are already stretched to the breaking point?  Or should we ask some of the wealthiest Americans to pay their fair share?
That’s the choice.  Over the last decade, we’ve spent hundreds of billions of dollars on what was supposed to be a temporary tax cut for the wealthiest two percent of Americans.  Now we’re scheduled to spend almost a trillion more. Today, the wealthiest Americans are paying taxes at one of the lowest rates in 50 years.  Warren Buffett is paying a lower rate than his secretary.  Meanwhile, over the last 30 years, the tax rates for middle class families have barely budged.
That’s not fair.  It doesn’t make any sense.  Do we want to keep giving tax breaks to the wealthiest Americans like me, or Warren Buffett, or Bill Gates – people who don’t need them and never asked for them?  Or do we want to keep investing in things that will grow our economy and keep us secure?  Because we can’t afford to do both.
Now, some people call this class warfare.  But I think asking a billionaire to pay at least the same tax rate as his secretary is just common sense.  We don’t envy success in this country.  We aspire to it.  But we also believe that anyone who does well for themselves should do their fair share in return, so that more people have the opportunity to get ahead – not just a few.
That’s the America I believe in.  And in the next few weeks, Members of Congress will get a chance to show you where they stand.  Congress is going to vote on what’s called the Buffett Rule: If you make more than $1 million a year, you should pay at least the same percentage of your income in taxes as middle class families do.  On the other hand, if you make under $250,000 a year – like 98 percent of American families do – your taxes shouldn’t go up.  You’re the ones struggling with the rising cost of everything from college tuition to groceries.  You’re the ones who deserve a break.
So every Member of Congress is going to go on record.  And if they vote to keep giving tax breaks to people like me – tax breaks our country can’t afford – then they’re going to have to explain to you where that money comes from.  Either it’s going to add to our deficit, or it’s going to come out of your pocket.  Seniors will have to pay more for their Medicare benefits.  Students will see their interest rates go up at a time when they can’t afford it.  Families who are scraping by will have to do more because the richest Americans are doing less.
That’s not right.  That’s not who we are.   In America, our story has never been about what we can do by ourselves – it’s about what we can do together.  It’s about believing in our future and the future of this country.  So tell your Members of Congress to do the right thing.  Call them up, write them a letter, pay them a visit, and tell them to stop giving tax breaks to people who don’t need them and start investing in the things that will help our economy grow and put people back to work.
That’s how we’ll make this country a little fairer, a little more just, and a whole lot stronger.  Thank you.

THE MATH OF PAUL RYAN'S BUDGET: YOU OWE THE 1% AND WILL PAY 22MAR12 & Three Hidden Time Bombs in the GOP's Medicare Budget 21MAR12

BIG surprise, not only does rep paul ryan's (r WI) proposed budget continue the repiglican / tea-bagger assault on the middle class, the poor, the disabled, the elderly and children, it also rewards the greed of the 1% (not all of them are greedy, remember the Patriotic Millionaires) with a minimum $150,000 tax cut. How will he pay for that? By destroying the social contract in America, by decimating Medicare, Medicaid and Social Security.

Every day, you and your family make choices about how you spend your money and what investments you make. Leaders in Congress do the same thing when they draw up their budgets for the country. And if you spend some time with their plans, you learn what they value, you see the type of country they want America to be. So when Congressman Paul Ryan put out a new budget for the House Republicans this week, we spent some time with it. We took a careful look and did the math. Here's what we learned. Republicans in Washington want to give millionaires and billionaires an average tax break of at least $150,000. They want to pay for those tax cuts by slashing programs that create jobs and protect our children, our seniors, and the veterans who have fought for the country. They want to end Medicare as we know it. And they want to undercut our economic strength by rolling back key investments in education, research, and our nation's roads and bridges. President Obama believes we need to live within our means and that's why he put forward a balanced plan that reduces the deficit by more than $4 trillion. But the plan put forward by the GOP fails that test of balance. To show you what we mean, we've put together an infographic that breaks out the kinds of priorities we'd have to give up for the $150,000 tax break that Republicans want to give to the nation's millionaires and billionaires. Check it out below and forward this message to your friends. The more people who share it, the more folks will understand what's at stake and how we can do better for the middle class. Thanks, David David Plouffe Senior Advisor to the President

Three Hidden Time Bombs in the GOP's Medicare Budget

By now most people have heard some of the worst things about the Republican budget proposal -- commonly called the "Ryan plan" and unironically described by the GOP as "the Path to Prosperity": That it decimates programs for middle class and lower-income Americans while giving even greater tax breaks to the rich -- $3 trillion worth, in fact. That it guts education, research, and transportation while preserving tax breaks for Big Oil. That it undercuts Medicare with a voucher system that will be worth less and less with each passing year.
And that, despite all that, it would actually increase the deficit.
You'd think that pretty much covers it -- but it doesn't. When it comes to Medicare, there are three more ugly facts about this plan that have yet to attract widespread attention -- mostly because the Republicans have done their best to keep them secret:
1. They're secretly planning to raise the Medicare age.
It's not in House Budget Chair Paul Ryan's Wall Street Journal editorial, the one where he sneered at "some who would distort for political gain our efforts to preserve programs like Medicare" and said "our plan provides guaranteed coverage options financed by a premium-support payment." It's not in the summary description of the GOP budget, which claims it "strengthens health and retirement security by taking power away from government bureaucrats and empowering patients instead with control over their own care." It's not even in the full budget document itself, which is 99 pages long and contains a section entitled "Strengthening Health and Retirement Security."
So how do we know that the GOP wants to raise the Medicare eligibility age from 65 to 67? Because that's what Ryan and his staff told the Congressional Budget Office when they asked the CBO to calculate the impact of their plan. It's right there in the CBO report on the budget.
Here's the key sentence: "In addition, the eligibility age for Medicare would increase by two months per year beginning in 2023 until reaching age 67 in 2034."
That's right: When Ryan and his staff instructed the CBO to calculate the impact of the Republican budget, they told its analysts that the GOP plan included an increase in the eligibility age for Medicare. Apparently they didn't have room to mention that fact anywhere in their 99-page document, and didn't see fit to bring it up while they were spouting all that rhetoric about "preserving entitlement programs for the future."
The Republican Party intends to raise the Medicare age for people as they approach the costliest years for receiving health insurance, and they're keeping it a secret from the public. This change alone would indirectly cut Social Security benefits by as much as 45 percent, by forcing seniors to spend that much of their benefit check on additional health care costs.
And remember, the GOP wants to raise the eligibility age for Social Security, too. The net effect of these two changes means that older Americans would be forced to keep working -- or looking for work -- at an age when their medical expenses would make hiring them prohibitively expensive for employers who offer health insurance. They would be forced to try purchasing health insurance on the open market.
Which gets us to our second dirty secret ...
2. Insurers will get to set their own rates.
The Ryan plan lets private, for-profit health insurers set their own rates -- rates which, according to the Ryan plan, will determine the Federal budget for senior health. It doesn't say that, of course, but that's how it would work.
According the the GOP's proposal, "All plans... would participate in an annual competitive bidding process ...The second least expensive approved plan... would establish the benchmark that determines the premium support amount... Program growth would be determined by the competitive bidding process..."
What does that mean in English? That Medicare goes away, to be replaced by a system of private health insurance companies who'll be paid to provide services that are supposed to (but won't) resemble the level of coverage seniors currently receive under Medicare. That health insurers would submit their bids to provide those services once a year.
And then comes the surprising part: The Federal government's expenditures for senior health care will be determined by the private insurers themselves, because the second-lowest bid establishes what the government is willing to pay for health insurance.
How crazy is that? Private health insurance rates have been climbing at three and four times the rate of today's Medicare. They've shown no ability to restrain costs -- and have no motive to do so, since they make money the old fashioned way: on the mark-up. And now they -- or the lowest bidder among them -- will dictate what the government must pay.
The plan says so, very clearly. "As opposed to pegging the growth rate to a predetermined formula," the GOP document say, "competitive bidding offers the ideal means of harnessing the power of choice and competition to control costs, while also securing guaranteed affordability for patients." In other words, the Republican Ryan plan places budgetary control for a major government program in the hands of the very insurance companies that profit from it.
At least that's what it would do, if they didn't contradict themselves in the very next paragraph.
3. The GOP plan radically cuts per-person spending for Medicare.
Remember that sentence we just quoted, the one about not pegging the growth rate to a predetermined formula? They totally lied about that. The plan does peg the growth rate to a predetermined formula, and Ryan's staff were very specific about it in their instructions to the CBO: "Total spending would grow in subsequent years," the CBO was told, "with nominal growth in per capita GDP plus 0.5 percentage points per year."
That's a "predetermined formula." And it's important to note that "nominal growth in per capita GDP" is not the same as the the growth in per capita health care costs, which have risen much more quickly than general inflation or GDP. That amounts to a major cut in benefits every year.
It gets even worse. The "per capita GDP" applies to everybody in the nation, not the ever-swelling ranks of Medicare-eligible seniors. This gets technical, but here's what it means: After this formula takes effect in 2023, there will be much faster growth in the Medicare-eligible age group than in the overall population. By structuring their formula this way the Republicans have ensured that there will be dramatic benefit cuts, especially as the "age wave" of Baby Boomers retires in the 2023-2030 period.
The "predetermined formula" is itself a secret, since they said there wasn't one. And the way it's structured will lead to dramatic cuts in Medicare.
Three-Pronged Attack
While the contradictions and evasions make exact forecasts difficult, it's clear that the net effect of these three changes would be to create a budget-busting giveaway to rich insurance corporations while at the same time slashing health coverage for seniors. And this isn't some radical ideologue's manifesto: it's the Republican Party's official Medicare proposal.
One terrible plan, three dreadful secrets. Presidential candidate Mitt Romney has said very, very nice things about this budget. In fact, all of the GOP's leaders have been bragging about it. Since they're so proud of it, why don't they tell more people what it really does?
http://www.huffingtonpost.com/rj-eskow/three-hidden-time-bombs-i_b_1371531.html?utm_source=Alert-blogger&utm_medium=email&utm_campaign=Email%2BNotifications

Freshman Republican Proposes Millionaires’ Tax 15MAR12

WOW!!!!! Rep Rick Crawford R AR is a brave man, and a honest man too! His constituents in Arkansas can be proud of him for bringing reality to the debate about the deficit, taxes, the 1% and federal government spending. From the Daily Agenda.....

 

Following the lead of the Patriotic Millionaires, Rep. Rick Crawford plans on introducing legislation next week that would impose a surtax on individuals making more than a million dollars per year. One Arkansas paper commentator noted that Crawford will surely get flack from the Grand Tax Poobah Grover Norquist, but Crawford seems to understand, unlike his conservative cohorts, that we currently have a tax crisis, not a spending problem.

The invisible welfare state of the top one percent 2MAR12

CLASS warfare in the U.S. is real, the 1% does benefit at the expense of the 99%.....

By Ezra Klein

Pop quiz: What is a government program? And are you on one right now?
Those are the questions Cornell University political scientist Suzanne Mettler has been posing. For her book “The Submerged State,” she asked a scientifically selected sample of 1,400 Americans whether they had ever used a government social program. Only 43 percent copped to having done so. Then she read off 21 social programs, such as Medicare and the home-mortgage interest deduction, and asked the same question again: Have you ever used a government social program? This time, 96 percent said yes, in fact, they had.

Alamy
Most of the welfare state for rich and upper-middle class Americans is, in Suzanne Mettler’s words, “submerged.”
According to Mettler’s survey, 60 percent of those who benefit from the home-mortgage interest deduction didn’t think they had ever used a government social program. Fifty-three percent of those with student loans didn’t think they had used one. Among Social Security beneficiaries, 44 percent thought themselves unsullied by the touch of government, and among Medicare beneficiaries, 39 percent said the same. Twenty-seven percent of those in public housing answered in the negative, as did 25 percent of those on food stamps.The implication seemed to be that Americans are hypocrites, or at least woefully uninformed. But in forthcoming research, Mettler and co-author Julianna Koch dig deeper, and find the reality is more complicated.
Their new paper argues that “policy design” is an important determinant of whether people recognize they’re using a government program or not. Some programs, like food stamps and Medicaid, force recipients to go to a government office and apply for them. Those are the programs that beneficiaries are most likely to recognize as government social programs.
Other programs, like Medicare, are provided by the government, but eligibility is mostly automatic, and recipients have paid into them. Beneficiaries of such programs are somewhat less likely to realize they’re on a government dole than beneficiaries of means-tested programs.
Then there’s what Mettler calls “the submerged state.” These policies are mostly, though not exclusively, tax breaks. They include the much-beloved home-mortgage interest deduction and the tax exclusion for employer-provided health care. Recipients of these policies — and there are tens of millions of them — are rarely cognizant that they’re benefiting from a government program.
But they are. “Indirect social policies offer benefits that are comparable to direct social benefits both in their purposes and in their costs,” Mettler and Koch write. “Both are targeted to specific groups of people, aimed to reward some kind of activity or some class of persons whom policymakers deem worthy of public support. From an accounting perspective, as well, both types have the same effect: They impose costs on the federal budget, whether incurred through fiscal obligations or lost revenues.”
The costs are significant. Huge, in fact. Tax expenditures now cost the federal government $1 trillion annually — more than Medicare and Medicaid combined. And they’re regressive.
There is also a pattern to these programs: The more a government social program benefits wealthier Americans, the less obtrusive it is. We design policies for the poor in ways that make it hard to escape the knowledge that the government is providing help. But richer Americans rely on programs that are “submerged.”
The Tax Policy Center estimates that eliminating all individual income tax expenditures would raise levies on the bottom 20 percent by $931. For the top 1 percent, the tax increase would be almost $280,000. (Notably, both President Barack Obama and Mitt Romney have talked about cutting back on tax expenditures for the wealthy, but neither has provided details.) Even so, many middle class and wealthy beneficiaries have no idea that they’re receiving any government assistance at all.
Not surprisingly, this influences Americans’ attitudes toward government. Mettler and Koch find that the more likely you are to know you have used a government program, the more likely you are to have a positive opinion of them. “These results point to an important but previously overlooked form of stratification in American politics,” they write, “in which some citizens are made cognizant of governments’ role, but others — although they too benefit from it — are not.”
Other factors influence whether people think they’ve used a government social program. All else being equal, a 75-year-old is 28 percent more likely than a 30-year-old to say he has never used a government program; a conservative is 50 percent more likely than a liberal to say the same.
Mettler hypothesizes that such differences could play a role in the nation’s growing political divide. “I think one of the drivers of the kind of polarization we have today is policy design and delivery, because we have these policies where people can benefit a lot from the government but become more anti- government because they’re paying higher taxes and don’t think they’re getting benefits.”
I’m more worried about the role submerged policies play in the budget and in good policy. We’re funneling an enormous amount of money to people who, in many cases, don’t need it and don’t even know they’re receiving it. We’re designing programs to be hidden in the annual budget — tax expenditures don’t show up as spending, even though that’s what they are — and invisible to taxpayers. That’s economically inefficient and politically problematic.
If Americans who either rent or own their homes outright were asked to accept a tax increase of $150 billion in order to subsidize the mortgage payments of their indebted friends, it seems unlikely they would find that appealing. The same goes for asking Americans who don’t get health insurance through their work to spend $100 billion or so annually subsidizing the benefits for those who do. Of course, that’s exactly what’s happening right now, but it’s hidden in the tax code, so most Americans don’t know it and can’t protest it.
It is in part because these policies aren’t visible that they’re so difficult to change. That’s the thing about submerging a large part of your welfare state. Sink it deep enough, and it becomes almost impossible to dredge up.

Big Oil’s Misbegotten Tax Gusher 5MAI2011 & Q&A: What's Going on With Gasoline Prices? 2MAR12

FOR all of us who get pissed off about the tax breaks big oil companies get while we are paying high gas prices (though not as high as they were at the start of the recession during the bush administration) here is an article from American Progress with explanations and figures followed by a Q&A from Mother Jones on gas prices.....

Why They Don’t Need $70 Billion from Taxpayers Amid Record Profits

SOURCE: AP/Robert F. Bukaty

Route 1 traffic bisects Exxon and Mobil gas stations Thursday, April 27, 2006, in Scarborough, Maine. Exxon Mobil Corp. reported first-quarter earnings of $11 billion, nearly 70 percent higher than a year ago.

By Seth Hanlon

The five largest oil companies last week announced first-quarter profits of $32 billion, up 30 percent from the first quarter of 2010. Exxon Mobil Corp. alone reported quarterly earnings of $11 billion, nearly 70 percent higher than a year ago, while BP p.l.c., Chevron Corp., ConocoPhillips, and Royal Dutch Shell p.l.c. reaped the remaining $21 billion.
At a time when gas prices exceed $4 a gallon, these profits are coming out of ordinary people’s pockets, and not just at the pump. American families are also padding the oil companies’ enormous profits with their tax dollars. In effect, U.S. taxpayers wrote a collective $7 billion bonus check to the oil industry when they filed their taxes last month.
That’s because the tax code is stuffed with a host of subsidies for oil and gas. These subsidies are delivered through the tax code but they are essentially no different from government spending programs that provide money directly.
Some of these tax earmarks have been around for nearly a century, and the deep-pocketed industry has successfully challenged previous repeal attempts. But today’s high gas prices and inflated profits have undermined the industry’s argument that their tax breaks benefit consumers. Meanwhile, federal budget deficits have sharpened Congress’s focus on eliminating wasteful government spending—of which oil subsidies are one of the worst examples.
Even congressional Republicans—who voted unanimously to retain oil tax breaks in March—now seem to be backing off their defense of the indefensible. Both House Speaker John Boehner (R-OH) and Budget Committee Chairman Paul Ryan (R-WI) have said, albeit in vague terms, that they now support rolling back oil and gas tax subsidies. A growing number of rank-and-file Republicans have echoed these comments.
It’s time to turn these sentiments into action, and momentum is building on Capitol Hill.
Senate Majority Leader Harry Reid (D-NV) said he intends to hold a vote as early as next week on ending the oil and gas earmarks.
In the House, all 15 Democrats on the tax-writing Ways and Means Committee this week urged Chairman Dave Camp (R-MI) to schedule a session to move a tax subsidy repeal. Thirty other members of Congress, led by House Democrat Earl Blumenauer of Oregon, recently wrote Boehner urging him to allow an up-or-down vote on the “Ending Big Oil Tax Subsidies Act.” Democrats may offer amendments repealing oil subsidies to legislation on the House floor this week.
The Center for American Progress has repeatedly in the last year scrutinized the hidden world of oil and gas tax subsidies, emphasizing that they represent wasteful government spending. Here’s a summary of the major oil and gas tax breaks and their cost to taxpayers:[1]

Percentage depletion ($11.2 billion over 10 years)

Companies are generally allowed to deduct the costs of an investment over the term of that investment’s useful life. But oil companies get to use a special method for calculating their deductions called “percentage depletion.” Instead of deducting the costs of an oil or gas well as its value declines, oil companies are allowed to deduct a flat percentage of the income they derive from it. Because the deductions are based on revenues, not costs, the subsidy actually increases at times when prices are high, which of course is when oil companies enjoy their greatest profits.[2]
The oil and gas industry maintains that this is not a special tax break because other companies receive similar deductions. But the percentage depletion method permitted for oil and gas is fundamentally different and more favorable. In some cases, it can eliminate all federal taxes for these companies. Moreover, percentage depletion is a poorly designed subsidy because it “doesn’t specifically target hard-to-find or difficult-to-extract oil,” as CAP’s Richard Caperton and Sima Gandhi have written.

Domestic manufacturing deduction for oil production ($18.2 billion over 10 years)[3]

Oil producers successfully lobbied for inclusion in a 2004 bill that gave the beleaguered manufacturing sector a special tax break designed to discourage outsourcing of jobs. For a number of reasons—including the capital-intensive nature of oil production, the relative mobility of investments, and of course the level of profitability—there are vast differences between the oil industry and traditional U.S. manufacturing. As Sen. Bob Corker, a Tennessee Republican, has explained: “Congress was trying to solve a manufacturing issue in this country” by enacting the deduction and included oil producers “almost inadvertently.”[4]
Whatever rationale there was for allowing oil producers to claim the manufacturing deduction has evaporated in the intervening time, as oil prices have nearly tripled. Eliminating oil producers from a benefit never intended for them “will have no effect on consumer prices for gasoline and natural gas in the immediate future,” and is unlikely to have any effect over the long run, according to a recent report by Congress’s Joint Economic Committee.

Expensing of intangible drilling costs ($12.5 billion over 10 years)

Another special tax rule dating back to 1916 permits independent oil companies (and major integrated oil companies to a lesser but still significant extent) to “expense” certain costs associated with drilling oil wells. This means they can take immediate deductions for these costs rather than spreading the deductions out over the useful life of the wells, which is the normal tax code rule for other types of investments. Taking deductions immediately means the companies lower their tax bill in the first year, in effect getting an interest-free loan from the government.

“Dual capacity taxpayer” rules for claiming foreign tax credits ($10.8 billion over 10 years)

Our tax system allows companies that do business abroad to reduce from their tax bill any income taxes paid to other governments. The rules are supposed to prevent oil companies from claiming credit for royalty payments to foreign governments. Royalties are not taxes; they are fees for the privilege of extracting natural resources.
Notwithstanding these rules, so-called “dual capacity taxpayers,” which are overwhelmingly oil companies, have been permitted to claim credits for certain payments to foreign governments, even in countries that generally impose low or no business tax (suggesting that these payments, or levies, are in fact a form of royalty).[5] Dual capacity taxpayer rules, therefore, are a subsidy for foreign production by U.S. oil companies. President Obama and others have proposed limiting the tax credit for these companies to what it would be if they did not have the special “dual capacity taxpayer” status.

Amortization of geological and geophysical expenditures ($1.4 billion over 10 years)

Another way many oil producers get to postpone their tax liability is by writing off the costs of searching for oil over an accelerated time period of two years. The president has proposed that all oil companies write off these costs over seven years, a relatively minor tax change that would have a negligible impact on investment decisions. According to the Congressional Research Service: “If the industry were experiencing a time of stagnant oil prices that were near the cost of production, relatively small changes in tax expenses might affect investment and production activities. However, in a time of high and volatile oil prices, small changes in tax expense are overshadowed by price variations.”[6]

“Last-in, first-out” accounting for oil companies (as much as $22.5 billion over 10 years)[7]

A tax accounting method known as “last in, first out,” or LIFO, provides a significant tax benefit for oil companies, especially when prices are rising. LIFO allows oil companies to calculate profits based on the cost of the oil they most recently added to their inventory. Since the most recently acquired inventory costs the most when prices are rising, this method can minimize a company’s taxable income. LIFO is available to businesses in other industries but large oil companies are perhaps the biggest beneficiaries.[8]
Taken together, these oil and gas tax subsidies represent a colossal waste of taxpayer resources since they pay companies, in the form of tax breaks, to do what they do anyway—especially at a time of price-fueled record profits.
American consumers have for years been waiting for the benefits of these tax subsidies to trickle down to them in the form of lower gas prices. It hasn’t happened. In fact, these subsidies existed during the 2008 oil shock when prices hit a record $147 per barrel, yet did nothing to lower oil prices or increase production. And repealing them won’t increase prices at the pump. “Gasoline prices are a function of world oil prices and refining margins,” explains Severin Borenstein, co-director of UC-Berkeley’s Center for the Study of Energy Markets. Any incremental impact on production “will have no impact on world oil prices, and therefore no impact on gasoline prices.”
Oil tax subsidies are simply a waste of taxpayer dollars. Oil and gas companies, like all companies, make investment decisions based on the profit potential. Those decisions are driven primarily by market conditions, including the price of oil on world markets, not marginal tax incentives.
“With $55 oil we don’t need incentives to the oil and gas companies to explore,” said President George W. Bush in 2005. “There are plenty of incentives.”
Oil prices today are double what they were then. It’s time to stop giving away tax dollars to some of the world’s most profitable companies.
Seth Hanlon is Director of Fiscal Reform for CAP's Doing What Works project.

Endnotes

[1]. There are also several other special tax provisions with a smaller cost to taxpayers (or no estimated cost due to current circumstances). These include the enhanced oil recovery credit, the credit for oil and gas produced from marginal wells, the deduction for tertiary injectants, and the exception from the passive loss rules for working interests in oil and natural gas properties.
[2]. Alan B. Krueger, Testimony before the Senate Committee on Finance Subcommittee on Energy, Natural Resources, and Infrastructure, September 10, 2009.
[3]. All revenue estimates are, unless otherwise noted, from: General Explanations of the Administration’s Fiscal Year 2012 Revenue Proposals (Department of the Treasury, 2011).
[4]. Chuck O’Toole, “‘Gang of 10’ Energy Compromise Would Strip Oil and Gas Deduction,” Tax Notes, August 4, 2008).
[5]. Joint Committee on Taxation, Description of Revenue Provisions Contained in the President’s Fiscal Year 2011 Budget Proposal (Government Printing Office, 2010), p. 318.
[6]. Robert Pirog, “Oil and Natural Gas Industry Tax Issues in the FY2012 Budget Proposal” (Washington: Congressional Research Service, 2011).
[7]. This is the industry estimate of the effect on oil companies of President Obama’s proposal to eliminate LIFO as a whole. See: American Petroleum Institute, “Significant Industry Tax Issues Contained in President Obama’s FY 2012 Budget” (2011), available at http://www.api.org/policy/tax/upload/FY2012_Budget-Short_Tax_Issues_Paper.pdf.
[8]. In 2005 the use of LIFO inflated the cost of goods for the five biggest oil companies by a combined $12 billion, thereby reducing their taxable income. See: David Reilly, “Big Oil’s Accounting Methods Fuel Criticism,” The Wall Street Journal, August 8, 2006.

Q&A: What's Going on With Gasoline Prices?

—By Kevin Drum

Chris_J/Flickr

Gasoline prices are on the rise! How come? And what does it mean? Let's do a Q&A.
Q: How much has the price of gasoline increased recently?
A: Since the beginning of the year, the average price of gasoline has increased by 42 cents, from $3.36 to $3.78 per gallon. That's from the US Energy Information Administration, and it's an average of all grades, all formulations, across all regions of the country. The price has gone up more in some regions (like California) and less in others (like the Rocky Mountain states). You can see the regional variations here.
Q: How come it's gone up so much?
A: Gasoline prices are linked very tightly to crude oil prices. Stuart Staniford has the wonky graph here and the wonky explanation: "Technically, 97% of the variance of the price of gas is explained by the price of oil."
Q: So what's the relationship?
A: UC San Diego's James Hamilton, your go-to guy for the effect of oil prices on the economy, says his rule of thumb is that a $1 increase in the price of crude produces a 2½-cent increase in the price of gasoline. Lately, gasoline prices have been linked most closely to the price of Brent crude, and since the beginning of the year Brent has gone up from $107 to $123, a $16 increase. By Hamilton's rule, this should have produced an increase of 40 cents in the price of gasoline.
Q: Hey, that's almost exactly right! So there's nothing more to it than oil prices?
A: Pretty much. There are a few miscellaneous other factors, like refinery shutdowns and the change from winter to summer formulations, but they don't amount to much.
Q: Fine. But why have oil prices gone up?
A: In the long run, the answer is just supply and demand. Oil production has plateaued over the past few years because everyone in the world is pumping full out, and there's very little spare production capacity left. Meanwhile, because the global economy is recovering, demand has increased. Americans may be using less oil these days, but that doesn't make up for rising consumption in Asia, particularly China and India. So the basic reason for climbing oil prices is Econ 101: When global supply is stagnant and global demand goes up, prices increase.
In addition, there are other theories about why prices have specifically gone up just in the past couple of months. Bernie Sanders thinks it's because of oil speculators on Wall Street. Sanctions on Iran may be hurting their ability to ship crude. Additionally, some analysts think that some of the price increase is driven by fear that Iran might cut off oil shipments entirely, or else slow or close the Strait of Hormuz. In other words, some of it might be driven by panic.
But here's the main takeaway: Demand for oil is pushing up against supply limits, and that's a permanent condition. From now on, demand is always going to be bumping up against supply limits because even if supply rises a bit in the future, demand is rising even faster. And when supply and demand are that tightly constrained, every small bump in demand or disruption in supply causes a big swing in prices. Last year it was the war in Libya that caused a price spike. This year it's Iran. But it's always going to be something. It doesn't take much anymore to produce a $30 swing in oil prices.
Q: Is this bad news for President Obama? Aren't presidential elections heavily influenced by gasoline prices?
A: Nate Silver crunched the numbers on this and concluded that the effect was actually pretty small. High prices at the pump probably have a negative effect on an incumbent president, but not much of one.
Q: Whew!
A: Not so fast. You also need to factor in the fact that higher oil prices are likely to slow down the economy. Jared Bernstein provides the nickel summary: "In terms of the overall economy, what you worry about here is a) oil is an important production input to everything we do, and b) higher gas prices mean less disposable incomes for people. Those are the dynamics behind the rules of thumb—the ones that say a $10 increase in a barrel of oil translates into about a quarter more per gallon at the pump, and, if it sticks, could shave 0.2% off of GDP growth. Not good, and why oil is #2 on my list of threats to the recovery (right after fiscal drag and before Europe)."
James Hamilton has done a lot of academic work on the effect of oil prices on the economy, and the effect is very real. If prices stay high, it could put a damper on economic performance later this year, and that in turn could hurt Obama's reelection chances.
Q: Do you have any good news to share?
A: Not really. New shale oil finds in North Dakota might increase global supplies a bit, but probably not enough to make up for increasing demand from China and other emerging economies. Basically, prices are going to stay high for the foreseeable future; even small supply disruptions are likely to cause big price gyrations; and big supply disruptions are likely to cause full-blown recessions. Like it or not, this is our future. I recommend you buy a motorcycle.

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Kevin Drum

Political Blogger

Kevin Drum is a political blogger for Mother Jones. For more of his stories, click here. RSS | Twitter