Saturday, January 17, 2015

EDITORIAL Congress Heads for Trouble

In the first week of the 114th Congress, the new Republican overlords acted to undermine the Affordable Care Act; set up a Social Security funding crisis; require President Obama to accept the Keystone XL tar sands pipeline; enact new roadblocks to immigration reform; and undermine the Dodd-Frank financial reforms.

Republicans want to bull ahead with the Keystone pipeline regardless of the threat of potentially toxic leaks over the environmentally sensitive Ogallala Aquifer in the Midwest, in pursuit of 42,000 short-term jobs in building the pipeline and less than 50 long-term jobs to maintain it — all to carry Canadian oil to Texas to be refined for export overseas. Of course, the GOP also passed a bill to make it much more difficult to pass and enforce regulations to be enforced by federal and independent agencies.

The House got a quicker start at mischief than the Senate since House leaders don’t pretend to seek consensus. They adopted a rule to create a funding crisis for Social Security Disability Insurance by banning transfer of funds within the Social Security Trust. That wouldn’t be so bad if Congressional Republicans had any intention of fixing the shortfall that is expected in the Social Security Disability program next year, but they have no apparent intention to do so. If Congress does not fix the disability trust fund, it will result in a 20% benefit reduction for 11 million disabled Americans.

“Reallocation has never been controversial, but detractors working to privatize Social Security will do anything to manufacture a crisis out of a routine administrative function,” Sen. Sherrod Brown (D-Ohio) said. “Rather than solve the short-term problems facing the Social Security Disability program as we have in the past, Republicans want to set the stage to cut benefits for seniors and disabled Americans.”

Republicans adopted another House rule to require that the supposedly nonpartisan Congressional Budget Office use “dynamic scoring” on tax bills, so that tax cuts will result in forecasts of higher tax revenue, in accordance with Republican “supply-side” voodoo economics, regardless of what experience shows.

Wall Street lobbyists have been working overtime to repeal the Dodd-Frank reforms that were adopted in 2010 to regulate Wall Street speculators and prevent a repeat of the Bush Recession. If Republicans can’t do it in one big bill, they’ll try to repeal Dodd-Frank piecemeal in amendments to other bills..

The House also passed the Regulatory Accountability Act, which is ostensibly aimed at cutting costly regulations, but considers the costs to businesses of regulations, not the costs to the public of allowing businesses to pollute the air and water.

New Senate Majority Leader Mitch McConnell has suggested that he might be open to resurrecting talks with the White House over a “Grand Bargain” that would include Social Security and Medicare “reforms” and steps to achieve a balanced budget — presumably, by cutting Social Security and Medicare benefits.

Until now, McConnell and Obama have spoken mainly about fast-track trade legislation, some elements of corporate tax reform and a surge in spending for highways, bridges, and other infrastructure. McConnell appeared much more expansive in what he thought could be accomplished, but progressives should be concerned about any “Grand Bargain” that McConnell and House Speaker John Boehner could sign onto. President Obama had better make sure that House Minority Leader Nancy Pelosi and Bernie Sanders (I-Vt.), the new ranking member of the Budget Committee, are involved in any such negotiations.

Pelosi has endorsed a “Robin Hood” tax plan that would place a 0.1% fee on financial transactions that would be rolled in with reductions in tax breaks for the top 1% of earners. The new taxes would fund a “paycheck bonus credit” of $2,000 a year for couples earning less than $200,000. Sanders’ vision of a “progressive” budget includes ending tax breaks for the wealthy and large corporations, reducing defense spending and boosting entitlement programs, such as Social Security, the Veterans Administration and Medicare. He has introduced legislation that would raise the payroll tax cap on people making over $250,000 a year in order to keep Social Security solvent for another 75 years. If Republicans aren’t going to move in that direction, Obama and the Democrats should feel no need to knuckle under.

Make College Affordable Again

President Obama announced a commendable plan to make community college free for students who maintain their grades. The program would be available for students who maintain a 2.5 grade point average and apply to schools that offer occupational training or credit toward a four-year degree.

If President Obama truly wants to transform the cost of higher education, Bryce Covert noted at (Jan. 9), Obama could make college free for all students without having to lay out more money to pay for it. That’s because the federal government could take the $69 billion it currently spends to subsidize the cost of college through grants, tax breaks, and work-study funds and instead cover tuition at all public colleges, which came to $62.6 billion in 2012, the most recent data. (The government spends another $197.4 billion on student loans.) That would give all students who want to get a college degree a free option to do so. It could also put pressure on private universities to compete with the free option by reducing their costs, which have risen 13% over the last five years.

But states also should take more responsibility for lowing the costs to attend their universities. When Rick Perry attended Texas A&M in 1970, tuition and fees cost $208 a year as the state paid 85% of the cost of running the university. Forty years ago, Texas kept college costs low enough that a student from a working-class family could reasonably cover the costs of tuition and fees by working during the summer at minimum wage.

What happened since then? Ronald Reagan led a Republican effort to increase costs for college students. When he was governor of California, Reagan complained that college students had it too easy, since the state’s universities didn’t charge tuition. He ended that populist feature and, after he became president in 1981, Reagan targeted federal assistance for higher education. He cut Pell grants and excluded middle-class students from the program. He limited the grants to lower-income families, which made it easier for Congress to cut the program further. Reagan also cut low-interest student loans and restricted eligibility for them. He phased out Social Security survivors’ education benefits, which provided one-fifth of student aid in 1981.

Republicans at the state level also reduced their commitment to keeping higher education affordable for the working class. The Texas Legislature deregulated tuition in 2003 under Gov. Rick Perry. Now the state pays less than 15% of college costs. Texas universities now cost more than $25,000 a year for tuition, fees, room and board. In California, the state pays only 11% of the university budget and it costs undergraduates more than $31,000 annually for tuition, fees, room and board.

States also could reverse the prison-building program that was needed to house the hundreds of thousands of people who were caught possessing and distributing controlled substances, such as marijuana and cocaine, during the War on Drugs.

The number of drug offenders in state prisons nationwide has increased from 19,000 in 1980 to 225,200 today, the Sentencing Project reported. Another 181,700 drug offenders are held in local jails. Most of these people are not high-level actors in the drug trade and no record of violence, the Sentencing Project noted.

Of the roughly 170,000 inmates in Texas prisons, about 90,000 are classified as non-violent, the American Civil Liberties Union noted. But it costs about $20,000 a year to keep an inmate in a Texas prison. Every $20,000 spent to keep a pothead in prison is $20,000 that could be spent sending a budding scholar to college. And if lawmakers don’t want to make that shift in public spending priorities, they should at least increase the minimum wage so that college students can pay for their tuition with summer jobs. — JMC

From The Progressive Populist, February 1, 2015

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