Updates on the stories we’ve covered
December 9, 2010: FLASH: BREAKING NEWS:
(CNN) – Defying the President, House Democrats voted Thursday not to bring up the Obama-GOP big tax deal for a vote. The deal may unravel as the House voted to hold out for a better deal — one that doesn’t give away the store (and hopes of deficit reduction) to the wealthiest Americans. See summary at CNN. The article quotes a member of the House leadership team Rep. Chris Van Hollen (D-MD), “We will continue to try and work with the White House and our Republican colleagues to try and make sure we do something right for the economy and right for jobs, and a balanced package as we go forward.”
We see a repeat of a problem that has plagued the White House for the past two years; it makes the deal the “opposition” before it lines up support from its allies and its base. Because the President backed the compromise without support from the House, Republicans are in a position to say that the lame duck Democrats in the House are to blame. However, brilliant Mr. Obama is (and he is very), he or his advisors don’t know how to play chess. In a sense, the Dems in the House have been backed into a corner, and they have chosen to stand up for their dignity. Who other than the White House and Republicans can blame them.
Estate Tax Giveaway: According to figures generated by the Tax Policy Institute and reported in Common Dreams Post by Dan Froomkin, the GOP-Obama “deal” contains another huge giveaway to the wealthiest Americans — a measure to exempt an estimated 40,000 of the biggest estates in the country each year that would otherwise have been subject to the estate tax. The Deal would amount to a gift in 2011 averaging about $3.5 million for each of the thousand or so estates worth $20 million or more. The roughly 3,500 wealthiest estates that would pay at a much lower rate. The total cost to the taxpayers would be about $23 billion a year. So much for deficit reduction.
Buffett (not Jimmy): By the way our wealthiest truth teller, Warren Buffett is on record saying that the estate tax is essential to prevent America from becoming a nation where the command of resources is based on the luck of inheritance rather than on merit. See it here. Mr. Buffett also says the rich (he included) have no need for more tax cuts. See our previous post.
See additional observations below.
December 8, 2010
EXACTLY WHAT’S IN THE TAX DEAL: OK, we’ve heard a lot about the political machinations, but what exactly did the deal (compromise) hammered out by President Obama and Republican leaders actually include. We found a nice article in the NY Times by Tara Siegel Bernard that explains it simply, without political hype. However, as the article states, this deal has not been approved by the House or Senate and there’s lots that can happen. There’s a lot of wheeling and dealing going on.
Below, our December 1 Update reports on a bipartisan deal to let the subsidies for ethanol lapse when they expire at year’s end. However, the corn-monoculture-ethanol lobby is hard at work; and certain members of Congress from the corn belt states are attempting to get an extension of the subsidy as part of the deal and according to Iowa Senator Chuck Grassley, See the Grassley statement on ethanol here.
Ekos-Squared view on the tax deal? Given the current situation, Obama has little choice. We agree with his statement yesterday, that it would be horrible to lose the middle class tax cuts and unemployment compensation for millions of Americans in order to win a debate on the issue of tax breaks for the wealthy (which are part of the compromise). However, our problem is how three branches of government controlled by Democrats have managed to put themselves in so weak a bargaining position.
The problem is that the Administration and Congress keep playing the inside game without playing to their real strength — grassroots support (the base that swept the Dems to power in 2008) . To get grassroots support you need to do something exciting — win or lose — make it powerful and get lots of folks behind it. Example, a moratorium on foreclosures, or a tax holiday for businesses that meet quotas for job creation. Sure the President was for a public option for health care reform — but neither he nor the Dems as a solid force ever got behind it with any umph. They came out with a complicated, compromised bill before going to the public to build support. The first thing the President did was to sit down with the medical and insurance industries. Then Senators (like my Senator Ben Cardin) conducted town hall meetings where they bumbled though complexities and were sitting ducks for Tea Party activists.
The Republicans do it better; they tapped into their own grassroots base (Tea Party) around simple and exciting themes, cut taxes, cut government, deficit-hypermania; this helped bring them to power in the House and nearly take the Senate.
But the real question is what do we Progressives do. We share some of the blame here. We worked our butts off to get Obama elected and then waited around for deliverance. Doesn’t work. In a previous post we outlined what Progressives might learn from the Tea Party. The basic message — don’t wait, start organizing an alternative power base within the Democratic Party — one that yields some clout.
For another good cut at the issue see Robert Reich’s latest piece in the Huffington Post.
December 1, 2010
BIPARTISAN EFFORT TO ELIMINATE COSTLY SUBSIDIES FOR ETHANOL: Three cheers for a bipartisan effort to cut the deficit by eliminating an ecologically and economically unsound subsidy for ethanol. For a list of Senators supporting the measure see NY Times article by John Collins Rudolf (Nov. 30, 2010).
Corn-based ethanol is not only inefficient but is largely responsible for the massive load of nutrients washing down the Mississippi River into the Gulf. The over-fertilization is the reason for the large oxygen-depleted dead zone in the Gulf. See Previous Post. Moreover, the rising demand for corn-based ethanol may be one factor contributing to a global rise in food prices. (Other factors include droughts).
According to a Reuters article by Gerard Wynn (Nov. 22, 2010), U.S. blending tax breaks for ethanol make it profitable for refiners to use corn-based ethanol even when it is more expensive than gasoline. The credits are up for renewal on Dec. 31. Total U.S. ethanol subsidies reached $7.7 billion last year according to the International Energy Industry, which said biofuels worldwide received more subsidies than any other form of renewable energy.
Finally, we wish that some of the same Republicans and more Democrats (that’s you Sen. John Kerry) would join Senator Sander’s efforts to cut off tens of billions in tax breaks enjoyed by big oil companies. Fair is fair. Henry S. Cole, Ph.D. (See Previous Post).
SOLAR ENERGY: FIRST THE GOOD NEWS, THEN……
According to Today’s NY Times, the Long Island Power Authority on Thursday agreed to buy nearly 50 megawatts of solar power, which will come from panels on the roofs of carports at railroad stations and other public buildings in Suffolk County, and on 200 acres at the Brookhaven National Laboratory. The Long Island Power Authority said the new project will be the largest in New York State. Although some environmentalists protested clearing of Pine Barrens at Brookhaven, the project is a real plus for solar energy. Every such project paves the way for a renewable future. NY State has an ambitious goal — 30 % of its electric power from renewable sources by 2015.
Outsourced panels; outsourced jobs: Ironically the cells for the Brookhaven project are being supplied by BP, which manufactures photo-voltaic cells. So be it. However, the saddest part of the story is that the 164,000 panels at the Brookhaven site will be made in China, India, Mexico and Poland, and the 60,000 at the railroad parking areas will come from China. (See NY Times piece by Peter Applebome). Clearly the U.S. is losing its competitiveness in the renewable sector — a sector that could provide critically needed jobs in manufacturing and supply chains.
Recommendation: Require that add a requirement to state renewable quotas — that at least 70 percent of the panels or wind turbines, and other equipment be manufactured in the U.S.