Blog Posts of Craig Jennings

Deal Made with Bunning, UI Benefits Resume

 

Sen. Jim Bunning (R-KY) accepted an offer from Senate Majority Leader Harry Reid (D-NV) to drop his hold on a bill that will allow unemployed workers to see their Unemployment Insurance benefits and health insurance subsidies continue for 30 more days and to return some 2,000 federal highway safety employees to work today. The Senate quickly passed (78-19) the $10.3 billion bill, HR 4691, and cleared it for President Obama's signature

CQ ($):

The 78-19 vote to clear the bill (HR 4691) for President Obama’s signature came after Democrats lambasted Bunning for preventing the Senate from extending the popular programs.

The bill would provide a short-term renewal of economic safety-net programs for the jobless and laws governing satellite television transmission. It also would prevent a cut in Medicare physician payments and would extend small-business, flood insurance and highway programs.

Bunning had blocked the measure since last week, arguing that the $10.3 billion cost should be offset. But he relented Tuesday, accepting an offer from Democratic leadership to have a vote on his proposal to pay for the bill’s cost by preventing “black liquor,” a wood byproduct, from being eligible for the cellulosic biofuels producer tax credit.

Democrats had offered Bunning the same deal last week and ripped him Tuesday for not taking it sooner.

(Craig Jennings 03/03/10; 1 comment)

Sign the Petition to Restore Unemployment, Health Benefits

 

Updated below.

Our friends at the Coalition on Human Needs are passing around a petition to "put aside partisan games, to put aside rhetoric and enact legislation that has broad bi-partisan support – an extension of unemployment benefits and the COBRA health care subsidy through the end of 2010."

Tell the Senate: Shameful Obstruction has Cut Unemployment Benefits for 200,000 People!

Action needed NOW!

One Senator, Jim Bunning (R-KY), was able to stall Senate action so that the federal extended Unemployment Insurance program expired on February 28. More than 200,000 long-term unemployed people this week alone are losing benefits they should be getting - if Congress delays further, up to 1.2 million will lose desperately needed benefits by the end of March. (See how many have lost UI this week in your state*: http://www.nelp.org/page/-/UI/march.PR.chart.pdf?nocdn=1)

Please sign this petition to let the Senate know you think this is absolutely shameful. http://salsa.democracyinaction.org/o/125/p/dia/action/public/?action_KEY=2445

And please forward this request to everyone you know.

For background on the issue, see Gary's post from yesterday.

UPDATE: Zaid Jilani at Think Progress found this gem from 2003:

...Bunning not only voted for an unemployment extension but also put out a glowing press release lauding the extension of unemployment benefits as “hopeful news for our most needy families in Kentucky“

UPDATE II: Bunning relents, bill sent to Obama's desk

(Craig Jennings 03/02/10; 3 comments)

Sticking It to the Unemployed

 

Over a million families are hanging on by thread, and all Sen. Jon Kyl (R-$$) wants to do is cut taxes for heirs of multimillion dollar estates. In fact, he wants to give scions of the rich tax cuts so badly that he's blocking health insurance assistance and a badly needed Unemployment Insurance extension from getting through the Senate.

Unbelievable.

Senate Democrats have found Republican support elusive for a bill that would combine year-long extensions of expired tax provisions with similar continuations of expanded unemployment coverage and health insurance subsidies for jobless workers.

[...]

Still, Minority Whip Jon Kyl , R-Ariz., said Republicans will block consideration of the new bill unless they get “a path forward fairly soon” on the estate tax.

Kyl has, in the past, proposed estate tax amendments that would give over $340 billion in tax cuts to heirs of multi-million dollar estates, and he would likely offer something similar given the oppurtunity.

Judy Conti of the National Employment Law Project (NELP) tells us what's a stake:

"The official statement coming out of Kyl's office is that the are holding up unemployment insurance to use as leverage for the estate tax," Conti told HuffPot. "They are jeopardizing the only lifeline that 1.2 million workers and their families have so that dead multimillionaires won't have to pay taxes."

According to NELP's analysis, 1.2 million people will prematurely lose unemployment benefits next month unless Congress acts.

United for a Fair Economy's Lee Farris calls this sort of hostage taking an "outrage":

'Why are Senators Kyl and Grassley more worried about enriching the heirs of multimillionaires than about helping Americans hit hardest by the recession?' asks Lee Farris, Estate Tax Policy Coordinator at United for a Fair Economy (UFE). 'It is an outrage that they are willing to hold struggling Americans hostage in their efforts to secure another huge tax cut for the wealthy Wall Street crowd that crashed our economy in the first place!'

Call Jon Kyl's office at (202) 224-4521, (602) 840-1891, or (520) 575-8633 and politely state your abhorrence to this move. You can e-mail his office using this form.

(Craig Jennings 02/25/10; 11 comments)

Financial Industry on the Mend, Decline

 

That these two headlines appear on the Wall Street Journal's homepage on the same day has me scratching my head.

(Craig Jennings 02/23/10; 0 comments)

The Free Markets in Banking and Baseball

 

Tom the Dancing Bug on how the free markets work in two American institutions: banking and baseball.


(click on image for full comic)

Well played, sir.

(Craig Jennings 02/22/10; 0 comments)

What If?

 

Today marks the one-year anniversary of the signing of the American Recovery and Reinvestment Act of 2009 (ARRA or Recovery Act). We're going to put up some more substantive posts later, but I thought these graphs in the New York Times really get to the heart of the "did it work" question.

Imagine if, one year ago, Congress had passed a stimulus bill that really worked.

Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now.

If that had happened, what would the economy look like today?

Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill.

Despite the nearly 2 million jobs that wouldn't have existed without the act or the additional 2 to 3 percentage points in additional GDP growth, only 6 percent of the public thinks the Recovery Act has already created a substantial number of new jobs, while only 41 percent think it eventually will.

This is probably driven by the current awful unemployment rate, but the enormity of the gulf between ARRA (and economy watchers) and the general public is striking. And this is all despite the fact that Recovery Act spending is the most transparent in history.

Image by Flickr user smcgee used under a Creative Commons license.

(Craig Jennings 02/17/10; 3 comments)

Sound and Fury or a Tell?

 

The Budget Brigade never finds itself short of words when it comes to commenting on the president's budget proposal. But it is, after all, just a proposal. What is the practical effect of the president's budget? Bruce Bartlett writing at Capital Gains and Games in a great post on of the history of federal budget making says "not much."

Given all these changes in the budget process, the president's budget has been greatly diminished in importance. Whereas it was once the necessary starting point for all budget discussion, since that was the only place the numbers even existed, now it is just one proposal among many. Congress tends to rely exclusively on the CBO for all its budget numbers and analysis. Although departments and agencies are supposed to adhere to the president's priorities, they do so only half heartedly.

Nevertheless, the media still maintain the fiction that the president's budget is something meaningful. Journalists dutifully report that the president is slashing such and such program, freezing spending or giving the go ahead to some headline-catching initiative. But at the end of the day the final budget has little if anything to do with the president's priorities. Congress mostly decides how the money will be spent and lobbyists probably have more to say about it than OMB does.

All true, I think, except about the bit about the president's priorities. The reason we talk so much about the president's budget is because it's an insight into how the president intends deploy available resources. True, Congress (and lobbyists) has a lot say about which programs get what funds, but that's not the final word by any means in how federal funds are spent. If OSHA gets a ton of money to enforce worker safety rules, the head of OSHA (hired by the president because she is friendly to his governing philosophy) could opt to give across-the-board pay raises to her staff rather than hire more people to inspect workplaces. The president's budget is a bit more than just a deck of jokers; it's a tip of the president's hand.

Image by Flickr user Kalense Kid used under a Creative Commons license.

(Craig Jennings 02/05/10; 1 comment)

Tax Expenditures: The Spending that Dare Not Speak Its Name

 

In our statement on the president's FY 2011 budget request to Congress, we mentioned a column in Tuesday's WaPo by Len Burman in which he called for a freeze in tax expenditures. The column, however, deserves more attention than just the one liner we added in the OMB Watch statement.

Here's the paragraphs from which we drew our reference:

At the same time the president promised restraint on a sliver of the federal budget, he proposed new tax breaks for child care, retirement savings and small-business capital gains. This is a perverse kind of gift: Many of the goodies the political Santas leave under our trees will be paid for, with interest, by our kids.

But suppose Obama's "freeze" were also applied to tax expenditures. Say we postponed its effect until fiscal 2013 so that the effects do not threaten a nascent economic recovery. Capping tax expenditures at 2012 levels for three years and indexing the cap for inflation after that, as proposed for non-security discretionary spending, would reduce the deficit by about $3.5 trillion. That's right -- 14 times as much as what the president's spending freeze would save.

What is not commonly mentioned in budget discussions are the hundred of tax breaks for businesses and individuals designed to subsidize certain activities. These tax breaks cost the federal government over $1 trillion per year. Some object to calling these breaks "tax expenditures" because the money was never in the hands of the government so it could never spend it. It's an alluring philosophical argument, but totally blinkered economically and budgetarily. Not collecting $X in taxes form an oil company because it drills for oil in a certain location is the same thing as the government collecting $X dollars in taxes and then turning around and writing a check to that oil company because it drilled in a certain location.

Chapter 16 of the Analytical Perspectives of the President's Budget is a good place to begin looking at tax expenditures (click on Federal Receipts). It's quite a read.

The Joint Committee on Taxation also enumerates tax expenditures. See here.

(Craig Jennings 02/03/10; 0 comments)

President's Budget Far from Change

 

OMB Watch has released its statement on President Obama's FY 2011 budget request.

There is a time and place for deficit reduction, but many economists do not recognize Oct. 1 of this year as an auspicious date to begin that process. Indeed, the president’s budget anticipates unemployment will remain above normal until 2015, not falling below 8 percent until 2013 (9.2 percent in 2011 and 8.2 percent in 2012). But reducing the deficit and fully funding the nation’s priorities are not mutually exclusive goals.

Read the whole statement here.

See Obama's budget here.

(Craig Jennings 02/02/10; 0 comments)

Emptying the Sea with a Teaspoon

 

We here in the Budget Brigade have been trying to get our heads around President Obama's announcement that his FY 2011 budget will propose freezing non-security discretionary spending at 2010 levels. Here's what has us beating our heads against our desks:

As a policy, trimming $250 billion over 10 years from a $6 trillion budget deficit (over the same time period) is like, well, it's like saving $250 to buy a $6,000 car. And while Obama makes no real headway in reducing the deficit he will succeed in cutting off funds for programs that millions of Americans depend on, especially in an economy with 10 percent unemployment.

As a political gimmick move, I don't really see the benefit here. This will likely dampen support from the left, and after Obama refused to stick his neck out for key progressive elements in health care, support in Obama's base is rapidly thinning. The right, meanwhile, will bash pretty much anything proposed by Obama, so he definitely won't pick up support there. Remaining are the center-right and center-left so-called independent voters who, at the end of day, just want to have jobs no matter the size of the deficit.

And that Obama is merely putting a cap -- and not an across-the-board freeze - on domestic discretionary spending is especially troubling, because when congressional appropriators working within this framework get down to business this summer, it will be they who decide which programs get cuts and which programs get bumps. And in Washington, those with the loudest political voice (i.e moneyed) will see their favored programs thrive, while marginalized populations who can't afford big time lobbyists will see their programs cut.

So, we could end up with is a budget that 1) has negligible impact on the deficit; 2) shortchanges vital human needs programs and institutions that protect the public; 3) keeps many progressives home in November; and 4) does nothing to generate political capital to help Obama advance his legislative agenda.

(Craig Jennings 01/26/10; 1 comment)