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Wednesday, October 30, 2013

Chris Hayes goes off: ‘American capitalism is not producing’ for 47 million poor Americans

Top Reasons to Oppose the Republican Budget

Committee on the Budget – Democrats
U.S. House of Representatives

Top Reasons to Oppose the Republican Budget


Reduces Jobs and Harms Economic Growth. 

Putting Americans back to work is the fastest and most effective way to reduce the short-term deficit – but the Republican budget turns its back on American workers.

·      Hurts Jobs This Year – The Republican budget does nothing to replace the sequester with a more thoughtful deficit-reduction plan. Consequently, the budget will do nothing to prevent the loss of 750,000 jobs that the Congressional Budget Office estimates will result from allowing this year’s sequester to move forward.

·      Hurts Jobs Next Year – According to estimates by the Economic Policy Institute, the House Republican budget would cost 2 million jobs in 2014.

Gives Windfall Tax Breaks to the Wealthy.

·      Tax Breaks for the Wealthy, Tax Increases for Everyone Else – The budget aims to lower the top individual and corporate tax rates to 25 percent, at a cost of nearly $6 trillion, which Republicans say they will pay for by closing unspecified loopholes.  Republicans would use all savings from closing tax loopholes to lower tax rates, particularly for businesses and higher-income individuals – at the expense of middle-income taxpayers, who will pay an average of $3,000 more per family.

·      Not a Dime of Loophole Closures for Deficit Reduction – The budget fails to reduce the deficit by one dime by closing even one special interest tax break, like those for big oil companies, corporate jets, and overseas tax havens.

Slashes Critical Investments in Our Future.  The budget’s cuts to investments in areas such as education, transportation, research and development, and energy will weaken the middle class and U.S. economic competitiveness. These cuts will force our businesses to work with a less skilled workforce, an outdated transportation network, and reduced technological innovation.

·      Slashes Education Funding – The Republican budget eliminates the entire mandatory Pell Grant program, a cut of $98 billion over the next ten years.  It also lets student loan rates double in July, from 3.4 percent to 6.8 percent, and cuts student loan funding by a total of $70 billion over ten years.

·      Erodes Transportation Funding – The budget cuts key transportation investments by more than 20 percent.

·      Eviscerates Broad Array of Important Investments – Non-defense discretionary spending – the part of the budget that goes to fund the National Institutes of Health, air traffic controllers, food safety inspectors, Head Start, national parks – is cut by more than twice as much as it would be cut if the sequester went into effect and stayed in effect for ten years. In 2014, that means $55 billion in additional cuts below the sequester level.

·      Neglects R&D and Clean Energy – The Republican budget cuts investments in research and development and clean energy.  It guts investments in clean energy while ignoring the tax breaks big oil companies have benefited from for decades, even as their profits pushed $1 trillion over the last ten years.  Federal funding for research and development strengthens American manufacturing, supports clean energy technologies that lack private sector investment, and bolsters our nation’s international competitiveness.

Breaks Promises to Seniors and Puts Vulnerable Populations At Risk. 

The GOP budget makes major cuts affecting health care and nutrition assistance for seniors, individuals with disabilities, and children and families struggling to get by.

·      Slashes Medicaid – The budget jeopardizes the health and financial security of the 62 million seniors, disabled individuals, and working families who rely on Medicaid.  The budget’s Medicaid “block-grant” plan simply means slashing $810 billion from federal Medicaid spending over ten years, and by nearly one-third in 2023 alone, and leaving it to states to decide what to do next.  Block-granting Medicaid will strain state budgets and lead many states to end care to millions of seniors and disabled individuals, who account for about two-thirds of program spending.

·      Ends the Medicare Guarantee – Over the long term, this budget ends the Medicare guarantee on which seniors depend and replaces it with a voucher for the purchase of insurance that is not guaranteed to keep pace with health care costs over time, thereby shifting the risk of rising costs onto seniors and disabled individuals.  The policy in the budget affects everyone who qualifies for Medicare in 2024 or later.

·      Increases Costs for Today’s Seniors – The budget eliminates all of the benefits of the Affordable Care Act for seniors: it reopens the Medicare prescription drug coverage gap, or “donut-hole,” and it increases costs to seniors for preventive care services.  Reopening the donut hole alone will increase costs for Medicare beneficiaries with high prescription drug costs by an average of over $13,000 from now through 2022.

·      Drastically Cuts Nutrition Assistance – The Republican budget drastically reduces the Supplemental Nutrition Assistance Program (SNAP, formerly called “food stamps”).  SNAP currently serves 48 million people, nearly three-quarters of whom are in families with children.  The only ways to reduce SNAP costs significantly are to throw people off the rolls or reduce the allotment per person, making it virtually impossible for economically struggling families to afford a nutritionally sound diet.

·      Puts Insurance Companies Back in Charge – The budget again assumes repeal of the Affordable Care Act’s coverage expansions and patient protections.  This means 27 million Americans will lose access to affordable health insurance, and insurers can once again do things like deny coverage for pre-existing conditions.

Monday, October 28, 2013

CHART: Welfare Reform Is Leaving More In Deep Poverty


| Wed Oct. 23, 2013 3:00 AM PDT

The economy is picking up in some parts of the country, but that hasn't translated into any new serious efforts to help those suffering the most hardship. In fact, for those on the lowest rung of the economic ladder, life may be getting even harder. A new report from the Center on Budget and Policy Priorities (CBPP) looks at cash benefits provided under the Temporary Assistance for Needy Families (TANF) program, commonly known as "welfare." It finds that the value of monthly cash benefits that make up the fragile safety net for the poorest families with children has continued to decline steadily since the program was "reformed" in 1996.

Back then, benefits weren't exactly generous, but they did manage to keep a whole lot of kids out of really deep poverty. Today, those benefits are almost nonexistent. The lucky few who are able to get cash assistance aren't getting enough to pay rent or keep the lights on in most states, and the value of the benefits has declined precipitously since 1996—even more so since the recession started. According to CBPP, there is not a state in the country whose welfare benefits are enough to lift a poor single mother with two kids above 50 percent of the poverty line, or about $9700 a year. In many southern states, TANF doesn't provide enough money to get a poor family much above 10 percent of the poverty line. What's especially troubling about these figures is that, as CBPP reports, TANF benefits are often the only form of cash assistance poor families receive. They may be getting food stamps, which definitely help their situations, but you can't buy diapers or pay the rent with food stamps.

People like President Bill Clinton and then-Speaker of the House Newt Gingrich claimed they'd be doing welfare recipients a favor in the 1990s when they reformed the welfare program to impose work requirements and make it more difficult for people to get benefits. The idea was that welfare recipients were just lazy and that their government checks were keeping them from working, making them dependent on the government. When the reform legislation passed, with Clinton's signature, some people in the administration quit in protest, arguing that cutting off cash assistance for poor families would push millions of children into poverty. That didn't happen, at least not right away. But funding for the TANF block grant hasn't increased since 1996, meaning that in real terms, what the country spends to help poor families in the program has fallen 30 percent overall since welfare was "reformed," and benefit levels have fallen even more in some states that cut benefits after the financial crisis started in 2007. Not surprisingly, since 1996, the number of families with children living in extreme poverty—that is, on $2 a day or less—has gone up nearly 130 percent.

The US Census Bureau reports that the number of Americans suffering significant hardships, such as having utilities cut off, getting evicted, or suffering food shortages, has escalated sharply during the recession. Between 2005 and 2011, nearly 7 million additional people were unable to make a mortgage or rent payment, suggesting that as the nation's last-ditch safety net for people in really dire straits, TANF, is not working. Given that science is now showing just how damaging the stress of poverty is to children and their health and intellectual development, maybe it's finally time for welfare reform to be reformed in a way that gives poor kids a fair shot at a decent future.

Front page image: Dorothea Lange/Library of Congress

Saturday, October 26, 2013

Billionaires Are Dangerous to Humanity, Dangerous to the Earth

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Billionaires Are Dangerous to Humanity, Dangerous to the Earth


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It's been a while since I wrote an article on billionaires. I think about them almost every day, as I watch the news, as I go through cities like NY, Philly, DC and Chicago, so it's time for another article that brings some of my thoughts about them. 

-There are over 1400 billionaires identified on the planet, over 300 in the US. There are probably more who are purposely under the radar. 

-Billionaires are dangerous. There may be a small percentage who are good people with good intentions. That is not enough a reason to hold back from the calls by me, Thom Hartmann and others to make it illegal and impossible to be a billionaire. 

-billionaires are freaks of nature. In nature, giants are bizarre, freakish anomalies, and they don't survive long. Billionaires should be treated the same way. They are malignant symptoms of civilization. Before civilization, indigenous cultures would treat billionaires as hoarders who were insane. They'd even through them out of the tribe or force them to behave and share. For most of the millions of years humans and our predecessors have walked the earth, sharing-- what libertarians and right wingers call socialism-- was the way all living people lived. 

-No-one needs a forty or one hundred million dollar home. No private person needs to own a piece of art work that costs over one hundred million dollars. No-one needs a one or five hundred million dollar yacht, and there  is no business reason for owning one either.  When I see such displays of wealth, I am disgusted. We need to change our culture so that people who engage in such spending are treated the way people who wear fur are treated. We need to have street theater and messaging that tells the filthy rich that their spending is pornographic and despicable. Of course, we really need to change the unsustainable consumer culture that we have now. That's a bigger project, but part of what really needs to be done. 

From http://www.flickr.com/photos/23941628@N02/10463498423/: That's a private yacht, not a cruise ship, at Charleston marina!
That's a private yacht, not a cruise ship, at Charleston marina! by sailn1

-Even the good billionaires have so much wealth and power they are dangerous. Some people think that it will take billionaires to save us. Ralph Nader wrote a novel based on that idea. I was excited about  Ebay Billionaire Pierre Omidyar's plans to develop a new news business with Glenn Greenwald, Laura Poitras and Jeremy Scahill. I still am. They are brilliant, courageous, heroic people. But we can't get into thinking that billionaires will save us. We must embrace the ideas of Paulo Freire-- that we need to wake up the oppressed and help them to help themselves. Billionaires won't do it for us-- not George Soros, not Pierre Omidyar or anyone else. 

The likelihood that a billionaire is a sociopath is higher than in the general population. But even if a billionaire is not a sociopath, the power a billionaire wields to affect other people is far too great. In addition, billionaires share their power with a lot of people. Those people are also dangerous. Neutering billionaires, by taking away their money, will also de-fang their hench-people. 

-A lot of billionaires are criminals who believe they are above the law. Glenn Greenwald wrote about in his book, Liberty and Justice for Some. When I interviewed him, he told me,
"... we've created this kind of  shield of immunity for elites, we have built up the world's largest prison system and one of the harshest and most merciless systems of punishment for ordinary Americans and this kind of two-tiered justice system where you receive total immunity if you are an elite and commit crimes but extremely harsh and merciless punishment If you are an ordinary American, is really the antithesis of what the rule law was intended to be."
That interview was in October 2011. Things have gotten worse. The billionaire trolls have crawled out from under their platinum plated rocks and, with the freeing effects of Citizens United, throwing around their money to influence elections. Some of them do it in highly visible ways, like casino billionaire, Sheldon Adelson (the guy is a despicable idiot, but his worth, over $27 billion, makes him even more dangerous.) Others, like the Koch brothers, build multi-layered organizations and shell operations to cast a veil over their predations and mechanations. 

Someone should develop an on-line database on every billionaire-- a database that looks at how they attempt to influence and that looks at their commercial and political interests. Since much of the billionaires operations are done THROUGH their many corporations, databases like  opencorporates.com are valuable. if you know of others, please share them in the comments. 

Forget about the two corporate parties-- Democrats or Republicans-- doing anything to get rid of billionaires. A head on clash is not going to work. 

We need to develop strategies that undermine and erode he ability of billionaires to become billionaires and to stay billionaires. Here are a few:

No More Dynasties: One early step should be a campaign to end American dynasties--- by putting very high taxes on inheritances, so the children of billionaires are not allowed to inherit any more than a fraction, say $25 or $50 million, no matter how big the estate. The details and loopholes would have to be very carefully attended to. This would have to include stock in companies founded by the parents. We don't want or need more Waltons or Pritzkers. 

Discourage Bigger Companies: One way companies get bigger is they acquire other companies-- to get access to technologies or markets, for example.

The US must invest in developing business models that provide alternate approaches, so smaller companies stay independent, so bigger companies don't swallow smaller companies. Jobs are lost when companies merge. Why not pass laws that recognize this and encourage other ways to enable big companies to work with smaller ones?

Track Billionaire's Money Better: If a company has more than 50 or 100 employees it is subject to different regulations than smaller companies. Why not apply the same approach to the most wealthy people, who are far  more likely to attempt to hide their money, their income and their assets to avoid taxes.  If you have more than $10 or $50 or $100 million in assets, you are required to declare and make transparent what you have and where you put it. 

Publicize broadly any lawsuits billionaires are involved in: Elites and plutocrats usually use their powerful connections to get out of trouble. They get judges to silence critics and seal cases. Make it a law that the wealthiest people do not get special treatment, and, on the contrary their cases cannot be sealed. 

Tax Corporations for paying outrageous sums to execs: Tax corporations for amounts equivalent to executive pay for any salary or other forms of remuneration, including tax options, etc., over the pay rate the president of the US gets-- $400,000 a year.   So, if a CEO earns ten million a year, the company must pay taxes of $9.5 million. There are too many big corporations that are giving huge salaries to execs and paying no taxes. If they can afford to pay big pay, they can afford to pay taxes.

The Kochs' Brazen Buyout of Our Democracy Is Right Up There with the Worst Oligarchs in American History


Spending hundreds of millions to buy as much political power as they can for a project that could earn them over $100 billion. 

To understand the present, you have to understand the past, which brings us to the story of William A. Clark.

Clark was one of the so-called Montana “Copper Kings” of the 1800’s.

After making millions in the booming mining industry, and trying his hand in the electric, newspaper, banking, and railroad industries, Clark set his sights on political office.

Clark had always had a lifelong ambition of becoming an elected official, and of achieving the fame and power that came with it.

In 1899, Clark made a serious push to become a U.S. senator from Montana.
Back then, U.S. senators were chosen by their respective state legislators.
So one afternoon Clark walked into the Montana State Legislature, and announced that he would be standing in the back of the room, holding envelopes filled with thousand-dollar bills.

He said he’d give those envelopes to anyone who voted for him.
Enough legislators voted for him and took his money that Montana sent him to Washington, D.C. as their senator for the 1900 legislative session.

But Clark’s bribery scheme was so public and brazen that even the largely corrupt U.S. Senate was horrified. They refused to seat him after reading newspaper stories about his passing out thousand-dollar bills to get elected.
And it was the notoriety of Clark’s naked bribery attempt in Montana, well reported in newspapers across the country, that helped lead to the passage of the 17th Amendment, which says that U.S. senators are elected by the people instead of by state legislatures.

With all this notoriety, Clark quickly became public enemy number one in the early 1900’s.

Speaking about Clark, Mark Twain once wrote that, “He is as rotten a human being as can be found anywhere under the flag; he is a shame to the American nation, and no one has helped to send him to the Senate who did not know that his proper place was the penitentiary, with a chain and ball on his legs.”

While William A. Clark may have died back in 1925, his willingness to corrupt the American democracy and political process is alive and well today.

Just ask the Koch Brothers.

Charles and David Koch, worth a combined estimated $68 billion in net worth, are among the driving forces behind the corruption of our democracy.
Between 1998 and 2008, Koch brother-controlled foundations gave more than $196 million to organizations that favor polices that would further pad the wallets of the two brothers.

In that same time period, Koch Industries, owned by the two brothers, spent $50 million on lobbying and handed out $8 million in PAC contributions.
The Kochs are also behind groups like Americans for Prosperity and FreedomWorks, which both gave and continue to give major financial support for the Tea Party movement.

And FreedomPartners, a Koch-affiliated organization, has doled out grants worth over $230 million to a variety of conservative organizations, Tea Party groups, and front-groups that oppose Obamacare.

This all brings us to the Keystone XL pipeline.

Recently, the Koch Brothers have been throwing their billions at lobbyists, front-groups, and lawmakers that support the fossil fuel industry and the construction of the Keystone XL pipeline.

The Koch Brothers are the fossil fuel industry’s largest donors to congressmen and women who sit on the committee that oversees the Keystone XL pipeline.
In 2010 alone, the Kochs and their employees gave over $300,000 to members of the House Energy and Commerce Committee.

At the same time, the Kochs have given more than $60 million to climate denial groups over the past 15 years.

So why are the Kochs handing out so much money to groups and lawmakers that support the Keystone XL pipeline and America’s toxic addiction to fossil fuels?

Money. And lots of it.

According to a new report released by the International Forum on Globalization, the brothers stand to make up to $100 billion in profits with the approval of the pipeline.

Keep in mind they’re only worth $68 billion. This could double their net-worth.
The report found that the Kochs and Koch Industries hold up to 2 million acres of land in Alberta, Canada, which is the proposed starting point of the Keystone XL pipeline.

And many Koch Industries subsidiaries stand to make millions from the pipeline's construction, including Koch Exploration Canada, which would profit from oil exploration on its land, and Koch Supply and Trading, which would benefit from the trading of oil derivatives.

With a possible $100 billion windfall down the road, more than double their combined total fortune today, it’s no surprise that the Koch Brothers are doing everything possible to make the Keystone XL pipeline a reality.

Their Republican allies in Congress even tried to use the Keystone XL pipeline as leverage in the government shutdown, demanding that it be approved before they would end the government shutdown and raise the debt ceiling.

Meanwhile, you and I are stuck with the byproducts of the Koch’s relentless pursuit of money and power.

Koch Industries is already one of the top ten polluters in the United States, pumping millions of tons of CO2 into the atmosphere each year, driving global warming and climate change.

And if the Keystone XL pipeline is finished, it will make things even worse.
Synthetic crude oil from tar sands generates three times the pollution of regular crude oil production, and is extremely poisonous. If there were ever a leak from the pipeline, the environmental and human damages would be horrific.

The ghost of William A. Clark is alive and well in the form of billionaires like the Koch Brothers, who are corrupting our political process, while destroying the environment and poisoning us.

We can’t continue to let the likes of modern-day William A. Clarks continue to buy off the American political process.

Thom Hartmann is an author and nationally syndicated daily talk show host. His newest book is The Last Hours of Humanity.

Friday, October 25, 2013

Billionaires’ Row and Welfare Lines

Op-Ed Columnist

Billionaires’ Row and Welfare Lines

Damon Winter/The New York Times
Charles M. Blow

The stock market is hitting record highs.


Bank profits have reached their highest levels in years.
The market for luxury goods is rebounding.
Bloomberg News reported in August, “Sales of homes priced at more than $1 million jumped an average 37 percent in 2013’s first half from a year earlier to the highest level since 2007, according to DataQuick.”
A report last week in The New York Times says that developers are turning 57th Street in Manhattan into “Billionaires’ Row,” with apartments selling for north of $90 million each.
And there’s no shortage of billionaires. Forbes’s list of the world’s billionaires has added more than 200 names since 2012 and is now at 1,426. The United States once again leads the list, with 442 billionaires.
It’s a great time to be a rich person in America. The rich are raking it in during this recovery.
But in the shadow of their towering wealth exists a much less rosy recovery, where people are hurting and the pain grows.
This is the slowest post-recession jobs recovery since World War II. The unemployment rate is falling, but for the wrong reason: an increasing number of people may simply be giving up on finding a job. The labor force participation rate — the percentage of people over 16 who either have a job or are actively searching for one — fell in August to its lowest rate in 35 years.
This disconnecting is particularly acute among young people. Measure of America, a project of the Social Science Research Council, recently released a study finding that a staggering 5.8 million young people nationwide — one in seven of those ages 16 to 24 — are disconnected, meaning not employed or in school, “adrift at society’s margins,” as the group put it.
Median household income continues to fall, according to recent data from the Census Bureau. The data showed, “In 2012, real median household income was 8.3 percent lower than in 2007, the year before the most recent recession.”
And according to an April Pew Research Center report, “During the first two years of the nation’s economic recovery, the mean net worth of households in the upper 7 percent of the wealth distribution rose by an estimated 28 percent, while the mean net worth of households in the lower 93 percent dropped by 4 percent.”
The dire statistics take on even more urgency when we consider what they mean for America’s most vulnerable: our children.
According to First Focus, a bipartisan advocacy organization focusing on child and family issues: “The 1,168,354 homeless students enrolled by U.S. preschools and K-12 schools in the 2011-2012 school year is the highest number on record, and a 10 percent increase over the previous school year. The number of homeless children in public schools has increased 72 percent since the beginning of the recession.”
A report last month by the Carsey Institute at the University of New Hampshire bemoaned the stagnation of the child poverty rate in this country, saying, “These new poverty estimates released on Sept. 19, 2013, suggest that child poverty plateaued in the aftermath of the Great Recession, but there is no evidence of any reduction in child poverty even as we enter the fourth year of ‘recovery.’ ”
Nearly one in four American children live in poverty.
A report last year from the National Poverty Center estimated “that the number of households living on $2 or less in income per person per day in a given month increased from about 636,000 in 1996 to about 1.46 million households in early 2011, a percentage growth of 130 percent.”
And yet, the value of aid for those families is shrinking and under threat.
A report this week by the Center on Budget and Policy Priorities found, “Cash assistance benefits for the nation’s poorest families with children fell again in purchasing power in 2013 and are now at least 20 percent below their 1996 levels in 37 states, after adjusting for inflation.”
The number of Americans now enrolled in the Supplemental Nutrition Assistance Program (SNAP) is near record highs, and yet both houses of Congress have passed bills to cut funding to the program. The Senate measure would cut about $4 billion, while the House measure would cut roughly ten times as much, dropping millions of Americans from the program.
Next week, lawmakers will start trying to find a middle ground between the two versions of the farm bills that include these cuts.
There is an inherent tension — and obscenity — in the wildly divergent fortunes of the rich and the poor in this country, especially among our children. The growing imbalance of both wealth and opportunity cannot be sustained. Something has to give.


Sell-Out Alert: 9 Democrats Already Caving to GOP On Social Security Cuts



Why aren’t key Democrats defending needed retirement programs?

Photo Credit: Gerry Boughan / Shutterstock.com

The next drama shaping up in Washington is one almost all Americans don’t want—cutting retirement benefits earned over a lifetime. At least nine Democratic senators are lining up with Republicans looking for big spending and tax cuts.

“It’s a horrible negotiating position,” said Warren Gunnels, senior policy advisor to Sen. Bernard Sanders, I-VT, who has been appointed to the 2013 federal budget conference committee, where the debate is taking shape.

“You hear these people saying, ‘We have to be the adults at the table and the Republicans don’t negotiate. Aren’t we reasonable?’” he continued. “A more reasonable position is a majority of Americans don’t want Social Security, Medicare and Medicare cut at all. Why don’t we have one political party represent what a majority of people want?”

October’s government shutdown and threatened debt default was disruptive and hurt the economy. But what is emerging is an entirely different drama, one that could shape the quality of tens of millions of people’s final decades. Most Americans do not have much in retirement savings and will live on Social Security now averaging $1,200 a month, and receive their healthcare under Medicare. Similarly, nearly two-thirds of Medicaid recipients are children from poor homes or adults with disabilities.  

TheNational Journal, a leading conservative publication, did a nationwide poll in the first week of the shutdown and tilted its questions to try to show public support for the GOP’s intransigence and for cutting entitlements. What it didn’t put on its website but was buried in its results (see page 4) was that 76 percent said Social Security should be cut “not at all,” as opposed to cut “a lot” or “some.” Eighty-one percent said Medicare should be cut “not at all.” And 60 percent replied "not at all" to cutting Medicaid. These results tracked two other National Journal polls done in 2012 and other national surveys.

But, as Sen. Sanders’ policy aide noted, the mindset in too many Washington circles is taking a completely opposite view. You would expect corporate defenders among the GOP to do what they have been doing since the government reopened—clamoring for cuts to social programs, as their rich benefactors don’t need them, and cutting tax rates, which makes wealthy people and businesses even wealthier. That’s what GOP leaders said; they’ll end the across-the-board federal cuts known as the sequester if Democrats agree to future cuts in Social Security and Medicare.

Senate Majority Leader Harry Reid firmly said no to that. But a day after the government reopened, the nation’s top Democrat, President Obama, spoke about the need to address “long-term obligations that we have around things like Medicare and Social Security.” The Senate Budget Committee chairwoman, Washington’s Patty Murray, said “all issues are on the [negotiating] table.”

The Senate’s number-two top Democrat, Illinois’ Dick Durban, later in the week told Fox News Sunday that “Social Security is going to run out of money in 20 years…Medicare may run out of money in 10 years. Let’s fix it now.” Virginia Democratic Sen. Mark Warner told the same program, “We all know at the end of the day, Republicans are going to have to give on revenues, Democrats are going to have to give on entitlement reform.”

The list of Democrats who are entering these negotiations enbracing the GOP’s terms continues. There are at least nine in the Senate. California’s Dianne Feinstein, Montana’s Max Baucus, West Virginia’s Joe Manchin, Delaware’s Chris Coons and Tom Carper, and Colorado’s Michael Bennett have all said they support cuts to entitlements in letters to constituents, proposed bills or statements made after the President’s fiscal reform commission led by Eskine Bowles and Alan Simpson issued its 2010 report proposing capping or cutting entitlements while lowering or eliminating corporate taxes.

No wonder George Will, arguably the nation’s leading right-wing commentator, also boasted on Fox News Sunday about the upcoming budget negotiation, saying, “We are now talking entirely in Republican terms, in Republican vocabulary after this so-called defeat… No taxes, how much is spending goung to be cut? The federal workforce is being cut, discretionary domestic spending is being cut…” And theWall Street Journal quickly capitalized on the division among Democrats with its own report, titled, “Budget Discord Simmers Among Democrats.”
Who Will Defend Ordinary Americans?

The starting line or framing of political debates is critical in shaping the outcome. If Will is correct that the Democrats, led by Murray’s acquiescent “all issues are on the table” posture, is entirely on Republican terms, then there is little likelihood any outcome would bode well for current and soon-to-be retirees. There are 18 senators on the budget conference committee, including Sanders and Wisconsin’s Tammy Baldwin, who fervently oppose Social Security cuts. But Simpson-Bowles supporters Coons and Warner are also on the panel’s Democratic side.

If anything, Sanders has said the current level of benefits is too small and needs to be increased. He’s noted, as his policy aide Gunnels points out, that this debate has not included asking the wealthy to pay more toward fortifying society’s safety nets.

Some pundits suggested that Durbin’s comments on Fox Sunday were a trial balloon, testing the political waters. He provoked the AFL-CIO to lay down a hard line, with its policy director Damon Silvers telling the Washington Post that there “will be no cover for members of either party who vote for such a thing.” Progressives, such as Credo Action, launched an e-mail campaign telling Durbin, “Don’t sell us out.” It pointed out that Social Security’s finances are sound for at least two decades, saying, “As Senator Durbin knows, the Social Security trust fund was pre-funded by the Baby Boomers, to the tune of $2.7 trillion dollars, in order to pay for their retirement. But Social Security can never ‘run out of money’ because it has a constrant of dedicated tax revenue.”

But the biggest Democrat of all—and the one not drawing a line in the sand but possibly leading a historic sellout—is President Obama. In September 2008, when the senator from Illinois appeared before the AARP, Obama attacked Republican nominee John McCain for suggested cuts to Social Security. As President, he has embraced those kind of cuts.

The Simpson-Bowles commission proposes freezing Medicare payments to providers, taking long-term care out of the Affordable Care Act, and limiting lawsuits against doctors and hospitals. On Social Security, it would change the way benefits are calculated—lowering the average today of $1,200 a month for a $50,000-a-year income by about 10 percent (see page 49)—and then changing how cost-of-living increases are calculated by a less-generous formula (called the chained CPI).

Last year, Sanders found 28 senators who signed a “Dear Colleagues” letter that opposed putting any Social Security cut into a deficit reduction deal. Murray, the Senate Budget Committee chairwomen who recently said that everything was on the table, signed it. So did Manchin, who held an event in his state with Simpson and Bowles to tout the panel’s proposals. Earlier this year, Sanders pushed the Senate to vote on revising the Social Security cost-of-living formula. His aide, Warren Gunnels, said some Democratics were relieved it was a voice vote, where each senator did not have to go on the record.

The emerging big picture is not encouraging. More Americans today need federal safety net programs than ever. It’s not their fault the economy has shifted. Productivity is up but wages have stagnated for decades. Less than a third of jobs offer pensions, and healthcare and housing costs keep rising. The implications of cutting retirement safety nets—by freezing what Medicare covers and cutting Social Security checks—clearly means that older Americans will face shorter and poorer final years.
It’s a bizarre spectacle to see the political leaders of the world’s wealthiest country buy into the premise that well-off Americans have run out of money and cannot do more to pay their fair share of taxes to help retirees and the poor. Worse, at least nine Democratic senators and a Democratic president aren’t drawing a line and saying no to future entitlement cuts. As former Secretary of Labor Robert Reich wrote this week, this is a “triumph of the right.”

“Conservative Republicans have lost their fight over the shutdown and debt ceiling,” he said. “But they’re winning the big one: How the nation understands our biggest domestic problem. They say the biggest problem is the size of government and the budget deficit. In fact our biggest problem is the decline of the middle class and increasing ranks of the poor, while almost all the economic gains go to the top.”

For more information on entitlement reform and campaigns to stop cuts, visit Social Security Works and the blog at OurFuture.org.

Steven Rosenfeld covers democracy issues for AlterNet and is the author of "Count My Vote: A Citizen's Guide to Voting" (AlterNet Books, 2008).

Thursday, October 24, 2013

Who Buys the Spies? The Hidden Corporate Cash Behind America’s Out-of-Control National Surveillance State


Democratic leaders are full-fledged players in the national surveillance state, right along with Republicans.


Photo Credit: Shutterstock.com

Editor's note: This is the first in a new series from AlterNet's New Economic Dialogue Project, edited by Lynn Parramore. 

Long before President Obama kicked off his 2008 campaign, many Americans took it for granted that George W. Bush’s vast, sprawling national security apparatus needed to be reined in. For Democrats, many independents, and constitutional experts of various persuasions, Vice President Dick Cheney’s notorious doctrine of the "unitary executive" (which holds that the President controls the entire executive branch), was the ultimate statement of the imperial presidency. It was the royal road to easy (or no) warrants for wiretaps, sweeping assertions of the government’s right to classify information secret, and arbitrary presidential power. When Mitt Romney embraced the neoconservatives in the 2012 primaries, supporters of the President often cited the need to avoid a return to the bad old days of the Bush-Cheney-Rumsfeld National Security State as a compelling reason for favoring his reelection. Reelect President Obama, they argued, or Big Brother might be back.

But that’s not how this movie turned out: The 2012 election proved to be a post-modern thriller, in which the main characters everyone thought they knew abruptly turned into their opposites and the plot thickened just when you thought it was over.

In early June 2013, Glenn Greenwald, then of the Guardian, with an assist from journalists at The Washington Post, electrified the world with stories drawn from documents and testimony from Edward Snowden, an employee of Booz Allen Hamilton working under contract with the National Security Agency, who had fled the country. They broke the news that the U.S. government had been collecting vast amounts of information on not only foreigners, but also American citizens. And the U.S. had been doing this for years with the cooperation of virtually all the leading firms in telecommunications, software, and high tech electronics, including Google, Apple, Microsoft, Verizon, and Facebook. Sometimes the government even defrays their costs.

For most election analysts, the revelations came like a bolt from the blue, despite a whole series of warning signs. These included Obama’s rapid fire decision to step up the war in Afghanistan right after he took office, the alacrity and severity with which his administration prosecuted national security whistleblowers after promising greater transparency and the administration’s sweeping claims about the government’s right to hold citizens without trial for indefinite periods. Not to mention the Justice Department’s insistence that killing American citizens without any kind of court hearing is lawful, the efforts to prosecute journalists for simply posting links to leaked documents, the overkill that attended official responses to the Occupy movement and protests at the national party conventions, or the White House claims that press freedoms enshrined in the Bill of Rights do not cover bloggers in an era in which everyone, including the New York Times, uses blogs.

Even now, the suggestion that the Obama administration embodies a distinctively new form of extensively privatized National Security State organically linked with the famously contentious Bush-Cheney structures takes some getting used to.  In particular, many readers are likely to wonder what a bitter, partisan stalemate such as the U.S. just witnessed over raising the debt ceiling can possibly mean in a situation where Big Brother and Big Money are working hand in hand through it all.
As the storm over surveillance broke, we were completing a statistical analysis of campaign contributions in 2012, using an entirely new dataset that we constructed from the raw material provided by the Federal Election Commission and the Internal Revenues Service (which compiles contributions from so-called “527”s).  In light of what has transpired, our quantitative analysis of presidential election funding invites closer scrutiny, particularly of the finding that we had already settled upon as perhaps most important:  In sharp contrast to endlessly repeated claims that big business was deeply suspicious of the President, our statistical results show that a large and powerful bloc of  “industries of the future” – telecommunications, high tech, computers, and software – showed essentially equal or higher percentages of support for the President in 2012 than they did for Romney.

Though documenting the claim would take us far beyond this post, we believe that the emergence of these new industries is a key factor in transforming the old National Security State into its new, even more sinister twenty-first century model. They are not the only important influence in that transformation, of course. These would include not only 9/11, but the rapid growth of the rest of the homeland security “industry,” including private prison companies and many other non-obvious players focused on data collection in particular domains, such as the vast infrastructure built out to service and support U.S. interventions in Iraq and Afghanistan. The policy of macroeconomic austerity, which made privatization of the old National Security State so seductively attractive to policymakers under pressure to cut government expenditures, has also played a significant role.
But the point that our findings document is perhaps most instructive of all. Many of the firms and industries at the heart of this Orwellian creation have strong ties to the Democrats. Bush and Cheney may have invented it, but national Democratic leaders are full-fledged players in this 21st century National Surveillance State and the interest group pressures that now help to sustain its defenders in Washington work just as powerfully on Democrats as on Republicans.

Over the next few weeks on AlterNet, we will explore what our data show about the 2012 election. But for now, we want to focus on the telecommunications, high tech, computers, and software industries, which contain many firms deeply involved in the surveillance programs.

We built two datasets for our research. One covers big business, meaning firms big enough to rank among the 350 largest on Fortune's lists plus members of the Forbes 400 richest Americans. The second is a much larger sample containing every firm of every size, from the smallest to the largest.
We assess support by firms and their executives (our dataset is the first to integrate contributions from both, including “independent” expenditures and, of course, Super Pacs) in two ways: We count the percentage of firms that make any contribution at all to each candidates’ campaigns (and their party’s national committee) and we track the money split between the two candidates. For more details, see the preliminary version of our full length study, available here.

In our big sample, which pretty well approximates “business as a whole,” Obama trailed far behind Romney. 41 percent of all the firms (or, thanks to the Supreme Court, their executives) contributed to Romney; only 24 percent donated to Obama. But rates of contributions from big businesses were much higher for both candidates: Just over half (56 percent) contributed to Obama, while fully 76 percent donated to Romney. Our conclusion is straightforward: the traditional view that the Republicans are the party of business finds some support, but our results suggest much stronger backing for the President within big business than any account of the election suggests.

But the really significant findings emerge when you look at particular industries. Six industries where the President ran especially strongly attracted our attention: telecoms, software, web manufacturing, electronics, and computers, plus the defense industry. His support in these industries ran far above his average levels of support either for business as a whole or the rest of big business. In fact, it equaled or exceeded the backing these firms afforded Romney.

In subsequent posts we will look at other industries in which Romney showed particularly strongly and consider the now red hot question of support by business groups for Tea Party and “main line” Republican congressional candidates. But we think this finding is the most significant of all: Firms in many of the industries directly involved in the surveillance programs were relative bastions of support for the President.

It is a sobering conclusion. At the time President Obama took office, many of his supporters expected a radical change in course on national security policy. This did not happen. For sure, limitations on some of the worst excesses were put in place, but there was no broad reversal. The secret programs of surveillance expanded and the other policies discussed above, on indefinite detention, treatment of whistleblowers, and executive prerogatives relative to Congress stayed in place or broke even more radically with tradition.

Our analysis of political money in the 2012 election shines a powerful new light on the sources of this policy continuity. We do not believe that it would be impossible to strike a reasonable balance between the demands of security and freedom that accords with traditional Fourth Amendment principles and checks abuses of government surveillance rapidly and effectively. But a system dominated by firms that want to sell all your data working with a government that seems to want to collect nearly all of it through them is unlikely to produce that.

*The authors gratefully acknowledge support from the Working Group on the Political Economy of Redistribution of the Institute for New Economic Thinking for preparation of the database, but the paper represents the views of the authors, not the institutions with which they are affiliated. The entire Political Money Project database for this essay is to be freely available to the public when work o

Thomas Ferguson is professor of political science at the University of Massachusetts, Boston, senior fellow at the Roosevelt Institute, and contributing editor of AlterNet. His books include "Golden Rule: The Investment Theory of Party Competition and the Logic of Money-Driven Political Systems" and "Right Turn: The Decline of Democrats and the Future of American Politics."

Paul Jorgensen is assistant professor of political science at University of Texas, Pan American and non-resident fellow at the Edmond J. Safra Center at Harvard.

Jie Chen is university statistician at the University of Massachusetts, Boston.

Tuesday, October 22, 2013

How Greedy Out-of-Control Private Contractors Botched the Obamacare Rollout

  Personal Health  


The Obama team outsourced Healthcare.gov to big corporations that rang up large bills without delivering what they promised.

Whatever the ultimate benefits of Obamacare, it's clear that the rollout of its $400m registration system and website has been a disaster. Healthcare.gov was unusable for millions who visited the site on launch day earlier this month, and the glitches reportedly continue. What went wrong?

Of course, the Obama administration is to blame for the botched rollout, but there are other culprits getting less attention – namely, global tech conglomerate CGI, which was responsible for the bulk of the execution, and in general the ability of big corporations to get massive taxpayer-funded contracts without enough accountability.

Government outsourcing to private contractors has exploded in the past few decades. Taxpayers funnel hundreds of billions of dollars a year into the chosen companies' pockets, about $80bn of which goes to tech companies. We've reached a stage of knee-jerk outsourcing of everything from intelligence and military work to burger flipping in federal building cafeterias, and it's damaging in multiple levels.

For one thing, farming work out often rips off taxpayers. While the stereotype is that government workers are incompetent, time-wastersdrooling over their Texas Instruments keyboards as they amass outsized pensions, studies show that keeping government services in housesaves money. In fact, contractor billing rates average an astonishing 83% more than what it would cost to do the work in-house. Hiring workers directly also keeps jobs here in the US, while contractors, especially in the IT space, can ship taxpayer-funded work overseas.

Fortunately, then, there are alternatives to outsourcing public functions to big corporations padding their profits at taxpayers' collective expense, and it is time we used them.

To this end the Healthcare.gov experience should serve as a wake-up call to President Obama, who, after all, said early in his first term he wanted to rein in the contractor-industrial complex, and to the state governments doling out multi-million dollar contracts. The revelation here is that an overdependence on outsourcing isn't just risky in terms of national security, extortionate at wartime, or harmful because it expands the ranks of low-wage workers; it's also messing with our ability to carry out basic government functions at a reasonable cost.

Like many contractors, CGI got an open-ended deal from the government, and costs have ballooned even as performance has been abysmal. The company – the largest tech company in Canada with subsidiaries around the world – was initially awarded a $93.7m contract, but now the potential total value for CGI's work has reportedly tripled, reaching nearly $292m.

Sadly, Healthcare.gov is but one high-profile example of the sweet deals corporations get to do government work—even as they fail to deliver. For other recent examples, one need only look at the botched, taxpayer-funded overhauls of the MassachusettsFlorida and Californiaunemployment systems, courtesy of Deloitte.
In Massachusetts alone, professional services giant Deloitte got $46m to roll out a new electronic system for unemployment claims. The company, whose private-sector whippersnappers were expected to lap the crusty bureaucrats the state employs directly, delivered the project two years late and $6m over budget. On top of that, the system has forced jobless residents to wait weeks to months to collect benefits. One unemployed man who filed a claim for benefits instead received anerroneous bill charging him $45,339. A slap in the face of absurd proportions.

Similarly, the rollouts in Florida and California, which each cost about $63m, can only be described as train wrecks: late, over budget and riddled with glitches that delayed payments to the jobless.
It doesn't have to be this way. We can save money, create good jobs, and get more for each taxpayer dollar by simply by in-sourcing government work. Doing so would mean actually having faith that the government can employ top talent instead of making unfounded assumptions that anyone receiving a government check is a waste of space who can't possibly innovate. Think about it: Why couldn't we, the taxpayers, have just directly hired the finest minds in tech to build Healthcare.gov?

Unfortunately, while Obama promised to focus on insourcing at the start of his presidency, federal workers have instead received multiple kicks in the teeth. There are now 20%, or 676,000, fewer federal workers since the size of that workforce peaked in mid-2010. Recall, too, that Obamafroze federal worker pay for two years following the 2010 congressional elections. Now the sequester – a fancy word for the government cuts that started this year – is causing further damage, and could cost 100,000 more federal jobs within a year. Deep cuts to state and local governments continue at the same time.
If we're not going to insource work – presumably because anti-government types successfully peddle the useless bureaucrat stereotype – we should at least have a better process for picking contractors that benefit from taxpayer largesse to carry out public projects. It may be hard to believe in light of the Healthcare.gov experience, but there are examples of successful government outsourcing arrangements in IT. One key to their success, aGovernment Accountability Office study pointed out, is consistent communication with, and monitoring of, contractors. Penalties for cost overruns, failing to deliver by agreed-upon deadlines and other forms of mismanagement would help, too.

Of course, we also need a more competitive bidding process, and a more thorough examination of the track record of any company up for a giant government contract.
Putting all of these systems in place takes time and money, which is one reason why direct government hiring is preferable. But regardless of whether we start insourcing or improving oversight or both, one thing is clear: we need to stop blindly throwing taxpayer money at corporations while not holding them accountable.

Moira Herbst is a strategist for BerlinRosen, a New York-based progressive communications firm. She has worked as a journalist for BusinessWeek, Bloomberg News and Reuters. Previously, Moira was a labor activist.