Weekly Audit: Government Shutdown Averted, But At What Cost?

By Lindsay Beyerstein, Media Consortium blogger

Congressional leaders and President Barack Obama reached an eleventh hour budget deal on Friday night, to fund the government for the rest of the 2011 fiscal year and avert a government shutdown for the time being.

The deal would cut about $38 billion, Amy Goodman reports for Democracy Now!, including $13 billion in cuts to the Department of Health, Labor, and Human Services.

John Nichols describes the nuts and bolts of the stopgap plan in The Nation:

The arrangement worked out Friday night averted the threatened shutdown with a two-step process. First, the House and Senate passed a one-week spending bill that addressed the immediate threat. That should give Congress and the White House time to finalize a fiscal 2011 spending deal—on which they have agreed in principle—before an April 15 deadline.

The Republicans will not be allowed to zero out Planned Parenthood. Instead they were allowed a separate, largely symbolic vote, which passed the House, but which is expected to die in the Senate.

Planned Parenthood and ACORN

Nick Baumann of Mother Jones argues that the deal is a case study in the priorities of the Democratic Party. At the last minute, congressional Democrats rallied to save Planned Parenthood. The venerable family planning organization was under fire because of an undercover video sting by Lila Rose, a onetime protegee of conservative propagandist James O’Keefe, who himself pulled a similar stunt against the anti-poverty, pro-voter registration group ACORN in 2009.

O’Keefe’s videos created a media firestorm and Congress rushed to de-fund ACORN with little protest from Democrats. Subsequent independent investigations revealed that the tapes had been deceptively edited. Vindication came too late for ACORN, which was forced to close its doors.

Baumann argues that Democrats spared Planned Parenthood and sacrificed ACORN because ACORN didn’t have friends in the right places:

Abortion rights affect everyone. But to put it bluntly, big Dem donors care a lot more about abortion rights than they do about community organizers in inner cities.

Specious “victory”

In the days leading up to the deal, the media created the expectation that the budget was a game that one party would “win.” Paul Waldman of The American Prospect argues that in his eagerness to declare “victory” in the budget showdown, President Obama is undermining his own political agenda.

It would have been nice if when announcing the budget deal, President Obama had set aside the politician’s natural inclination to declare victory and his own preference for casting himself as the adult who settles things between the squabbling children. He could have said something like this: “The deal we just made is preferable to a government shutdown, which would have been truly disastrous. But nobody should mistake it for anything but the tragedy it is. As a result of the cuts Republicans have forced, people who rely on government services will suffer, and the economy will lose jobs. The Republicans held the government hostage, and we had no choice but to pay the ransom.”

By rushing to champion the spending cuts, Obama may be saving face, but he’s also setting a precedent that will make the next round of cuts even easier. The truth is that Democrats conceded under duress, they didn’t volunteer to cut spending because they thought it would help the country.

Indeed, Democrats agreed to far more cuts than the Republicans initially asked for. Cenk Uygur of the Young Turks argues that the Tea Party and the ostensibly more mainstream Republicans set up a very effective good cop/bad cop negotiating strategy in which the Democrats would offer cuts and the mainstream Republicans would say, “I’d like to help you, really I would, but you know my partner isn’t going to like that.”

Corporate taxes

Joshua Holland of AlterNet explains how corporate American has successfully lobbied to shift an ever-increasing share of its tax burden onto the backs of individual citizens:

Well, consider this: in the 1940s, corporations paid 43 percent of all the federal income taxes collected in this country. In the 1950s, they picked up the tab for 39 percent. But by the time the 1990s rolled around, corporations were paying just 18.9 percent of federal income taxes, and they forked over the same figure in the first decade of this century. We – working people – paid the difference.

Something to think about as we prepare to file our income tax returns.

This post features links to the best independent, progressive reporting about the economy bymembers of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The MulchThe Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.



Hand Over Your Medicare, or the Government Gets It

As both parties have fingers in the wind for a sign of who might own a potential shutdown, I can't think of anything more tone deaf than releasing, simultaneously, a budget proposal phasing out Medicare, and shifting the marginal tax rate burden further onto the middle class. 

But that's just what Republicans have done.  Ed Kilgore:

So TV viewers tonight are going to see Republicans ecstatic about Ryan's radical budget and Tea Partiers--despite the tips-from-the-coach offered by Bachmann--chanting for a government shutdown. Sure, most rank-and-file Republicans will see nothing wrong with this scenario, but elsewhere, the public is likely to deduce that the "savings" congressional GOPers are demanding are about something more fundamental than subsidies for Big Bird or the exact level of cuts.

Ryan's proposal got the go ahead from leadership because it was red meat for the teabaggers.  I'd bet they thought, just like in Ryan's first whack at screwing the middle class via "serious proposal" a year ago, they could stir up the Randian base, and wave it off in front of saner voters as just a discussion of ideas, a pondering of options, a party searching for it's identity. 

But by wasting their first few months as a governing majority with a predictable attack on NPR funding, anti-choice posturing, and training the freshmen not to sound like secessionists on CNN, they've staved off any real discussion around policy withing their own ranks.  And when they finally have it, they ensure that the "budget" showdown and Rep. Paul Ryan's "budget" proposal get simultaneous headlines, and connection in the public mind as one "budget" fight. 

As in: We'll shut this whole thing down -- closing your parks, furloughing public workers, and delaying tax return checks -- unless you hand over your Medicare!

This genius strategy had every Democrat within sprinting distance of a microphone or camera rushing to comment in a rare display of messaging control.

Considering the buyers' remorse already hanging over Republican governors settling in in the midwest, and most of the freshmen Republicans campaigning in 2010 on defending Medicare against Obama's health care reform, I don't see how they reel this albatross back in.

Welcome to the 2012 campaign, folks.  Entertainment provided by John Boehner's House.


Our National Values- Reflected In Our Spending Priorities:NOT

A few years ago, somebody handed me a pen at a community event that had a little handle on the side that you could pull out, revealing two charts that unfurled to around 5 x 7, large enough to make their points. (current versions below)


Total Outlays (Federal Funds): $2,650 billion
MILITARY: 54% and $1,449 billion
NON-MILITARY: 46% and $1,210 billion

Thinking about the current debate over the utility of bank bailouts  vs. universal healthcare I was reminded of them. - I keep wondering, IF 60-70% of Americans want universal healthcare, WHY are our (bad?) political actors saying that its off the table?
What is tying their hands? Perhaps the charts help explain one of the many reasons why. We are spendng more money on our military than the whole rest of the world, combined, is spending on theirs!

(US on left, rest of world on right)

Source for 2009 pie chart figures:"The pie chart figures are from an analysis of detailed tables in the "Analytical Perspectives" book of the Budget of the United States Government, Fiscal Year 2009. The figures are federal funds, which do not include trust funds -- such as Social Security -- that are raised and spent separately from income taxes. What you pay (or don't pay) by April 15, 2008, goes to the federal funds portion of the budget. The government practice of combining trust and federal funds began during the Vietnam War, thus making the human needs portion of the budget seem larger and the military portion smaller. "
Thats it.  The above quoted text and images come from this site.

There's more...

Republican hypocrisy watch: Tom Latham edition (IA-04)

The Democratic Congressional Campaign Committee has been tracking  House Republicans who try to take credit for provisions in the economic stimulus or 2009 omnibus spending bill, even after voting against both measures.

The latest addition to the "House Republicans' Hypocrisy Hall of Fame" is Representative Tom Latham of Iowa's fourth district. He has been sending out press releases touting earmarks he inserted in the 2009 omnibus spending bill, without mentioning that he didn't support the bill on the House floor. This is from the DCCC's press release of March 12:

In a striking example of hypocrisy, after voting against the recently enacted FY 2009 Omnibus Appropriations, Congressman Tom Latham is taking credit for millions of dollars included in the legislation that will help local community colleges, health care clinics, and renewable energy producers in  Iowa 's 4th Congressional District.

"Congressman Latham keeps telling people he `secured' millions of dollars in funding for Iowa, but the truth is he voted against these investments," said Gabby Adler, the Midwestern Regional Press Secretary for the Democratic Congressional Campaign Committee.  "Congressman Latham can't hide from his voting record, no matter how hard he tries.  Counter to what Congressman Latham would have you believe, these millions of dollars aren't coming to Iowa because of his hard work, these investments are being made in spite of Congressman Latham's efforts to defeat this bill and the funding for Iowa."

In every single press release sent out by Congressman Latham announcing investments for Iowa included in the FY 2009 Appropriations, he not only hid the fact he voted against the legislation but he led people to believe he championed its passage.  One release read Congressman Latham "once again this past week demonstrated his commitment to community colleges," another one discussed his role as a "long-time supporter" of new health care technologies.  In a third release, Congressman Latham even referred to his support of Iowa's renewable energy industry as "steadfast" despite his vote against $1.4 million for a cutting edge wind energy project in Iowa.

After the jump I've posted the rest of the DCCC's release, which contains further details about the earmarks Latham voted against but is now taking credit for.

The two-faced Republican position on earmarks is truly sickening.

Latham may feel secure in IA-04 for 2010 after receiving more than 60 percent of the vote last November. However, in 2012 he will probably have to run in a redrawn third district, which may not be as friendly as his current turf. For that reason, I have wondered whether voting for some of President Barack Obama's policies would be in Latham's political interest, or whether he would be better off rejecting every significant White House proposal, like most House Republicans.

Apparently Latham plans to have it both ways and hope Iowans don't notice.

There's more...

Slow Motion Recession Catching Up With the States

The NY Times ran a story last week on the unique circumstances of the current recession, particularly in unemployment:

Joblessness has accelerated, and employers have slashed working hours even for those on their payrolls, shrinking the size of paychecks just as workers need them the most.

That's not the unique part, but still a stark reminder of how much trouble the everyday citizen is in. What's got economists scratching their heads is the timeline:

"It's a slow-motion recession," said Ethan Harris, chief United States economist for Lehman Brothers. “In a normal recession, things kind of collapse and get so weak that you have nowhere to go but up. But we’re not getting the classic two or three negative quarters. Instead, we’re expecting two years of sub-par growth. Growth that’s not enough to generate jobs. It’s kind of a chronic rather than an acute pain.”

Great, so the US economy has arthritis, not a minor sprain or pull. Even worse is what this will mean in the future:

Goldman Sachs forecasts that the unemployment rate will peak at 6.4 percent late in 2009 before the picture improves, meaning that the painful process of shedding jobs may be only half-way complete.

Yet the President threw a temper tantrum when the idea of extending unemployment insurance was brought up. While that ended up getting passed and approved by the President, it seems as though Congress is lagging a bit in addressing the larger issues associated with the recession.

According to Congressional Daily (subscription only), Congressional leaders love the idea of a second stimulus package, they just don't have the same sense of urgency that many other folks have.

The Senate agreed to the deal on the war package after House and Senate Democratic leaders said publicly that a second supplemental was needed to take care of items that were not included in the war spending bill.

Reid reiterated those sentiments in his comments Tuesday and mentioned increasing food stamp benefits, as well as funding to improve the nation’s crumbling infrastructure as two worthy areas of investment.

“There are all kinds of problems dealing with infrastructure, food stamps, just many, many different things,” Reid said. “We have a lot of suffering going on in America today.”

Senator Reid's got it right, there is a lot of suffering going on in America today. So if we're going to take our time with a second stimulus package, let's make sure we do it right.

A great place to begin would be to listen to the National Governors Association when they meet later this week for their centennial meeting. Among other things, they will be discussing the effects of the recession on state economies.

29 of these Governors will be dealing with a combined $48 billion budget shortfall. The ones who chose to raid their rainy day funds may face even worse problems in FY 2010, and according to the previous New York Times piece, unemployment will almost certainly be a staple of the new fiscal year as well. They need help in the form of federal aid to states. Something that Senator Schumer cited as a must for the next stimulus package back in June:

"I'm speaking for myself, but I think I mirror the leadership here, to just do rebate checks again, without some more serious structural issues, to do it without, say, unemployment insurance, without infrastructure, without some help for the states, would not have the kind of punch it needs," Schumer said.

If its not included the following story will becoming all to familiar to families across the country.

With job losses growing and working hours shrinking, many paychecks are eroding, prompting millions of families to cut their spending. Soaring prices for food and gasoline are overwhelming modest wage gains for most workers, leaving households with even less money to spend. All of which deprives struggling businesses of sales, prompting them to shed more workers, sending the cycle down another turn.

The clock keeps ticking Senator Reid, we need to make sure we get this one right.

There's more...


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