- Corporate greed and profits over people priorities launched
nationwide OWS protests in hundreds of US cities for change.
- Mindless of growing public rage, political Washington
keeps cutting vital social benefits needing increases during hard times.
- With real unemployment approaching 23%, earlier cuts
- Pell Grants help for college tuitions;
- federal wages;
- the Low Income Home Energy Assistance Program (LIHEAP)
to help impoverished families have heat in winter;
- the Children's Health Insurance Program (CHIP);
- community healthcare centers;
- nonprofit health insurance cooperatives;
- HIV/AIDS, tuberculosis, and other disease prevention
- WIC (Women, Infants, and Children) grants to states for
supplemental foods, healthcare, and nutrition education for low-income
- Head Start, providing comprehensive education, health,
nutrition, and parent involvement services to low-income families with
- the Supplemental Nutrition Assistance Program (targeted
earlier with more coming), providing food stamps for poor households;
- community development block grants for housing, overall
reducing HUD's budget by $1.1 billion;
- Federal Emergency Management Agency (FEMA) first-responder
- energy efficiency and renewable energy programs;
- Environmental Protection Agency (EPA) clean/safe water
and other projects;
- National Institutes of Health (NIH) medical research;
- the National Park Service;
- vital infrastructure and transportation needs; and
- other non-defense discretionary spending.
- New cuts will sustain Wall Street, militarism, favoritism,
waste, fraud, and other rewards for Washington's usual special interests.
They'll benefit at the expense of ordinary people losing out.
- Increasingly on their own sink or swim, Obama calls it
"shared sacrifice." Ordinary people sacrifice to let business
and super-rich elites share.
- Washington's new FY 2012 budget agreement cuts billions
more from vital domestic programs. LIHEAP lost another $1.2 billion, a
25% reduction year over year. Labor, health and education allocations dropped
$1.4 billion, including $225 million by eliminating 22 programs, many related
to job training.
- In addition, Pell Grants will end for another 100,000
students, and those getting them will only receive $5,500 for another year.
Overall, $1.36 billion will be lost over several years.
- Last August's Budget Control Act of 2011 established
the Joint Select Committee on Deficit Reduction - aka Supercommittee.
- After failing to agree on cuts by its self-imposed November
23 deadline, automatic reductions of $1.2 - $1.5 trillion will occur over
the next 10 years, beginning in 2013.
- Supposedly to be equally divided between defense and
domestic programs, expect sustained military spending at the expense of
gutting America's social contract. Either way, lost purchasing power means
less spending, fewer jobs, and greater public anger than today's high levels.
- Wrangling Over Extending Unemployment Benefits and Payroll
- On December 31, both end unless congressionally extended
and Obama agrees. On December 17, the Senate enacted both benefits through
February 29, 2012. In addition, scheduled Medicare doctor reimbursement
cuts were postponed.
- Federally financed Fannie Mae, Freddie Mac and Ginnie
Mae home buyers will pay an extra $15 a month on a $200,000 mortgage to
cover the $33 billion cost.
- However, House Speaker John Boehner opposed the deal,
telling Meet the Press on December 18:
- It's "just kicking the can down the road. It's time
to just stop, do our work, resolve the differences and extend this for
one year. How can you have tax policy for two months?"
- At issue, of course, is Republicans wanting greater domestic
spending offsets in return for agreeing to these extensions. Still unresolved,
time ran out as Congress prepared to adjourn for Christmas break.
- On December 20, the House rejected the Senate bill. On
January 17, the Senate adjourned until January 23. Throughout the holiday
period into January, it'll hold nine pro forma sessions. Unfinished business
remains unresolved until it returns.
- Ahead of adjournment, Republicans extracted another major
Obama concession after refusing to go along earlier. At issue is constructing
a controversial 1,661-mile Alberta, Canada to Port Arthur, TX pipeline.
For weeks, hundreds of environmental activists protested in front of the
White House against it.
- If completed, it'll carry toxic tar sands oil from Western
Canada to refineries on America's Gulf coast. It'll pass through environmentally
sensitive areas in six states, including waterways and the Oballala Aquifer.
It's one of the world's largest. In America, it supplies about 30% of the
nation's irrigation ground water.
- Friends of the Earth says Keystone XL "will carry
one of the world's dirtiest fuels: tar sands oil." Moreover, its route
"could devastate ecosystems and pollute water sources, and would jeopardize
- If completed, it'll double America's dirty tar sands
oil supply, making its environment more toxic. No matter the stakes, Big
Oil wants it. So do Republicans and conservative Democrats. Obama once
- TransCanada Corporation will build it. It's spill-prone
construction record assures trouble. It promised its Keystone I pipeline
would leak once every seven years. In year one, it leaked 12 times or once
a month on average. It was unprecedented in US pipeline history.
- Washington's Destructive Payroll Tax Extension
- Leaving in place a 2% cut (perhaps indefinitely) is a
scheme to drain hundreds of billions of dollars from the Social Security
Trust Fund. Doing so will irreparably weaken its ability to pay future
benefits. The idea, of course, is destroying it altogether, perhaps first
- At issue is allegedly extending another one-year tax
holiday. It's easy to enact cuts, but hard ending them. Doing so results
in a substantial tax increase. It amounts to $2,000 on $100,000 a year
earners, $400 for those making $20,000.
- In other words, restoring it means a nearly 50% tax increase
for 94% of American workers. Imagine doing it any time, but consider the
harm in hard times.
- However, maintaining the cut indefinitely will cause
massive benefit reductions and eliminate any chance for improving them,
notably for society's poor and disadvantaged.
- In addition, middle America will be harmed, violating
Franklin Roosevelt's pledge that:
- "We put those pay roll contributions there so as
to give the contributors a legal, moral, and political right to collect
their pensions and their unemployment benefits. With those taxes in there,
no damn politician can ever scrap my social security program. Those taxes
aren't a matter of economics, they're straight politics."
- Key is that maintaining a payroll tax holiday of any
amount is another step toward privatization. It's also a sure way to kill
America's most important ever poverty reduction program.
- Doing so will replicate how 401(k)s destroyed private
pensions, leaving workers at the mercy of marketplace uncertainties that
can wipe out life savings during hard times.
- Key also are better ways to provide stimulus without
harming Social Security. According to the Center for Budget and Policy
Priorities (CBPP), one way is by reinstituting the 2009 Making Work Pay
Tax Credit. It expired at yearend 2010. Doing so would add much more stimulus
than a payroll tax holiday.
- It would give workers a refundable tax credit, increasing
the size of the paychecks. At 6.2% of earned income, it provides maximum
$400 for working individuals, $800 for married taxpayers filing joint returns.
- A payroll tax holiday is a bad idea any time, besides
doing little to stimulate economic growth. "The most efficient way
to boost consumer spending is to put money into the hands of people who
will spend it quickly rather than save it." It's most effective when
low and middle-income workers get it, not high-end ones who'll save, not
spend, their windfall.
- "A payroll tax holiday does not score well on this
front - too little of the benefit goes to lower-income households struggling
to make ends meet and too much goes to higher-income taxpayers, who are
likely to save a significant (portion) of any new resources they receive."
- The Making Work Pay Tax Credit doesn't harm Social Security.
Indefinite payroll tax holiday extensions may destroy it. Republicans have
long sought it, as well as ending Medicare since its 1965 enactment.
- With considerable help from Democrats and Obama, their
chance finally arrived. Only public anger may stop them.
- Stephen Lendman lives in Chicago and can be reached at
- Also visit his blog site at sjlendman.blogspot.com and
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