Tag Archives: Ben Nelson

Ruled By Neo-Hooverists

What leaped out of last Friday’s pathetic jobs report for a lot of people was the significant drop in employment for government workers, particularly at the state and local level:

The latest jobs numbers from the Labor Department are out. In the past, we’ve noted the protected status of government workers. While private sector payrolls were falling like a stone, government employment at every level was growing. In recent months it had been falling slightly, but still remained above its pre-recession levels.

No more. In September, state and local government payrolls fell below the levels of December 2007, when the recession began. The declines indicate the pain that state and local governments are feeling from severe budget shortfalls, despite the $787 billion stimulus package last winter.

There’s a very good reason that the stimulus package failed to avert this drop in state and local government payrolls.  During the stimulus debate, Presidents Ben Nelson and Susan Collins decided to drop $40 billion dollars in state-based aid that would have gone directly to saving these jobs.  Presumably faced with no choice to clear the 60-vote cloture hurdle, Democrats and the Administration went along, and that state aid vanished.  So unsurprisingly, as a result, state worker jobs have vanished right along with it.  That translates to hundreds of thousands of jobs all over the country that would have meant hundreds of thousands more consumers with spending money, hundreds of thousands more people off the unemployment insurance rolls and contributing to state budgets rather than taking from them, hundreds of thousands more people providing help and aid to others who have trouble getting it due to scaled-back state workforces.  

It was a terrible, terrible idea.  Especially because the woes for state budgets are only beginning, and what aid did come with the stimulus will probably run out before state economies recover.

History suggests it could take six or more years for sales and income taxes – which make up roughly two-thirds of states’ revenue – to return to pre-recession levels. That augurs deeper cuts to state jobs and services in order to maintain funding for core programs such as public schools and Medicaid.

What’s different from the three previous recessions, which took states three to five years to recover from, is that employment and consumer spending aren’t expected to bounce back as quickly.

To balance their budgets in the meantime, states are likely to further raise taxes on the money people earn and spend; increase college tuition; reduce funding for the arts and other cultural programs; and push costs into the future by delaying pay raises for employees and repairs of government buildings. Some states, including Massachusetts, Missouri and Arizona, already are making or considering fresh cuts just months after lawmakers agreed on new budgets.

I would say that $40 billion dollars in direct aid could have gone a long way right now and in the future.  But instead, we are ruled by neo-Hooverists.

Allow Me to Make A Pre-Emptive Strike

The talk of the nation yesterday was, of course, Arlen Specter’s switch from Republican to Democrat in the U.S. Senate, effectively delivering a filibuster-proof majority to the Demcorats upon the seating of Al Franken.  Specter’s move was precipitated by a poll showing Specter trailing Club for Feudalism Growth candidate Pat Toomey by over 20 points.  

Most of the commentary since has correctly focused since on the rightward shift of the Republican Party as a whole, and the regressive Neanderthal nature of its base, which drags the party backward and away from the mainstream even as the progressive base pulls the Democratic Party forward, mostly into positions supported by a majority of the electorate.

But there’s a danger in interpreting the Specter decision as simply a function of extremists vs. moderates, playing into a Broderite concern for a loss of “bipartisanship”.  Let us ignore for a moment the argument that “moderate” should be defined on a national rather than individual Party scale, as those supporting the majority of American opinion: national healthcare, an immediate end to the occupation of Iraq, etc.  That would be too easy.  

No, the problem is that I can already hear the mewling of Democratic consultants in California, tying any moves toward accountability by progressives, including but not limited to primaries against the likes of Jane Harman or Dianne Feinstein, to the shortsighted actions of Pat Toomey and his merry band of fools.

There’s a big difference–so, in the spirit of Jane Harman, allow me to make a pre-emptive strike in an effort to nip any such whining in the bud.  The difference isn’t whether to take action against squishes and “moderates” in one’s party, but where to do so.

The fact is that Pennsylvania’s Republicans are a bunch of morans.  There’s a simple decision function that decides whether to primary a so-called “moderate” within one’s own party.  It goes something like this:

If your “moderate” is in hostile territory, defend them.  If your “moderate” is in friendly territory, primary them and get a “purer” candidate.

That’s a pretty simple equation.  In Pennsylvania, where Democrats hold a voter registration edge of over 1 million votes and where Obama racked up a huge margin of victory, a Republican challenge to their own incumbent is political suicide.  Whether Specter had switched or fallen in the Primary is irrelevant: derailing him is the functional equivalent of handing the Senate seat over to the Democratic Party.  In fact, given Pat Toomey inevitable spanking at the polls in 2010, Specter’s switch is about as good an outcome as Republicans could possibly hope for.

On the other hand, had Arlen Specter been from, say, Oklahoma, it would be a very different picture.  In that case, the republican Party would be smart to punish Specter for his many betrayals of their fundamentalist “principles”.  Of course, the GOP’s problem is that they’ve pretty much already purged every moderate in solidly conservative districts–and many like Specter and Chafee in liberal areas.

Ultimately, what this shows is the disparity not only in moral clarity but more importantly in political acumen between the progressive and the conservative base:  the progressive base isn’t stupid enough to primary, say, Ben Nelson in Nebraska or Mary Landrieu in Louisiana.  We know that we’ll take what we can get there.

But there’s no reason we should have to put up with the shenanigans of Dianne Feinstein and Jane Harman here in deep blue California and Venice Beach.  No reason at all.

And any Broderite who even starts to equate moves in California (or elsewhere in blue areas across the nation) to hold our squishes accountable, to the efforts of the Club for Growth in Pennsylvania, will only display a profound lack of political acumen.  But then, that’s entirely expected.  Hence the pre-emptive strike.

Senate Proud To Sink California And The States

Both the Washington Post and the LA Times have stories today about the budget crises facing the states, where governors and legislatures have exhausted every gimmick and now must enact painful cuts that will work against the federal program to bring us out of the economic downturn.  The personal stories are significant:

Nevada resident Margaret Frye-Jackman, 71, was diagnosed in August with ovarian cancer. She had two rounds of chemotherapy at University Medical Center, the only public hospital in the Las Vegas area.

Soon after, she and her daughter heard the news on TV: The hospital’s outpatient oncology services were closing because of state Medicaid cuts. Treatment for Frye-Jackman and hundreds of other cancer patients was eliminated […]

“If this is what it’s like in Nevada, with cancer stuff closing, is it like that everywhere?” said Frye-Jackman’s daughter, Margaret Bakes, accompanying her mother to the doctor’s recently. “Are all the other states closing stuff too?”

The answer, in at least 39 states, is “yes” — or “soon.” With personal, sales and corporate income tax revenue plummeting, state governments — which recently trimmed their budgets to cover a cumulative $40.3-billion shortfall for the current fiscal year — are now watching in horror as a $47.4-billion gap opens for 2009.

And for fiscal year 2010, they will face a $84.3-billion hole, according to the National Conference of State Legislatures. The total shortfall through fiscal 2011 is estimated at $350 billion, according to the Center on Budget and Policy Priorities, a nonpartisan think tank in Washington.

This article frames it as there being “no choice” but tough budget cuts or tax increases for states facing shortfalls, states that cannot print money or run budget deficits.  But that’s not entirely true.  There was a good deal of help being offered by the federal government in the House stimulus bill, which included $79 billion in state fiscal stabilization aid.  But among their other cuts, the Axis of Centrism cut that aid in half, by $40 billion dollars, and in so doing guaranteed additional layoffs to teachers and firefighters and cops and nurses and all sorts of other professions which rely on a state paycheck.

California law mandates that layoff notices to teachers be given out by March 15 for the next school year. Arnold Schwarzenegger is proposing $10 billion in education cuts. Republicans, which use our state’s rule requiring a 2/3 vote of the legislature to pass a budget, are demanding these cuts as the price of a tax increase to close the remaining $40 billion and ensure that the cuts aren’t bigger.

But all of us were hoping and expecting that the US Congress would come through with aid to stabilize state budgets, to help ameliorate the problem and save teacher jobs by providing stimulus money. It must be in the stimulus because, as I just noted, the layoff notices will go out within 5 weeks – there is no time to include it in another bill.

Now we are told that Ben Nelson and Susan Collins, two Republican Senators, have reached a deal to cut that education assistance and that the Senate is likely to accept it.

In short, what they have done is guarantee to my sister and to thousands like her that they will receive a pink slip within five weeks.

To call this fearmongering, as John Ensign did on Meet the Press today, just denies reality, par for the course for both Republicans and bipartisan fetishists like Claire McCaskill, who was at first giddy about cutting 600,000-700,000 jobs in the stimulus, and then passive-aggressively “defended” it by saying the alternative was no bill.

Claire McCaskill is now defending herself against Krugman on Twitter:

Just saw Krugman’s comments on reduction in recov act. Question for him. Would no stimulus act be better than one thats 800 B instead of 900.

She follows that up with

Compromise had to happen or we would NOT have 60 votes. Period.

And for further evidence of how much the bill is the same, she claims:

Original Senate bill was 60% appropriationss, 40%tax cuts. Compromise was 58, 42.Senate bill is 90% the same as House bill.

I’m glad that’s she expressing herself here, and that we’re able to somewhat have a dialogue. But I’m not sure how much in good faith it is. McCaskill began by stating how glad she was that they got a $100 billion cut out of the bill, that the “silly stuff” that Republicans didn’t like is now out. She then switches to a passive aggressive mode in defending the cuts – it’s basically the same bill and it wouldn’t have made it through the Senate – but glosses her own role in making the cuts. From the way she talks about the bill, wouldn’t she have been among those voting against the bill if the cuts hadn’t been made and new non-stimulative tax cuts hadn’t been added in?

McCaskill doesn’t want to admit her role in putting 600,000 Americans out of work on Friday, which will harm public safety and increase class sizes and shut down bus and rail lines and send the sick and uninsured looking in vain for treatment and a host of other inadvisable outcomes.  And there’s no rational economic reason for it, just that the Axis of Centrism choked on the price tag and had to compensate for the non-stimulative tax cuts the Senate tossed into the bill.  Massive job loss or increased property tax rates (as states compensate for the loss to education funds) is on McCaskill and Nelson and Collins and Spector’s hands.

The big question is what will come out of the House-Senate conference next week, whether the cuts, especially the state government relief, will be restored at the expense of things like the $70 billion dollar patch to the alternative minimum tax.  Larry Summers left that an open question on ABC this morning.

One of President Barack Obama’s top economic advisers forecast Sunday a difficult struggle with Congress over Senate cuts of $40 billion for state and local governments from the administration’s massive spending and tax cut package to stimulate the failing economy.

The $827 billion Senate version of the plan — designed to bring the economy out of the worst downward spiral since the Great Depression — was expected to pass the Senate on Tuesday. The House had already passed its $819 billion version of the measure.

And in the opening moments of This Week, an exchange between George Stephanopoulos and Larry Summers went like this:

STEPHANOPOULOS: …does that mean the President prefers the Senate version to the House version?

SUMMERS: No, the President feels that above all, we need a major program enacted very quickly that would create 3 to 4 million jobs. He believes we need to perfect it in every way we can.

If the cuts are restored, suddenly the sense of urgency works back in the direction of passing a bill more like the House version.  The Republican business lobby is urging passage.  I don’t think the moderates signed on to the bill could break ranks on the final vote if the changes in conference are limited to, say, swapping the state cuts for the AMT patch, combined with an assurance from the President that they will make that fix down the road.

The action needs to be entirely directed at the Speaker, who has spoken out against these cuts and ought to appoint conferees that will get the House version at least partially restored.  Being from California, she knows exactly how hard-hit the states are and what the consequences will be.  

California Getting Screwed In Stimulus Trim-Down

If Republicans in Washington are offering a united front for neo-Hooverism and against any real effort to save the economy and prevent a Depression, Republicans out in the state who actually have to govern are doing anything but.  Arnold Schwarzenegger and 18 other Democratic and Republican governors have come out in support of the recovery package, leading Dan Walters to call him Keynesian.  Actually Arnold is just slightly less than insane, recognizing that without massive investment from the public sector, California will never be able to cover its budget deficit and revitalize its economy.

We support the objectives of ARRA and welcome the partnership it offers us as governors. The support for a temporary increase in the federal commitment for public education, health care (including cost control through initiatives such as health records IT), and for rebuilding our public infrastructure will create and preserve jobs today, and represents a sound investment in our long-term economic interests as well. We look forward to working with Congress and your Administration to advance an economic recovery package that puts federal dollars to work in our states in the quickest and most efficient manner as possible.

But this is being threatened in a big way.  Yesterday we learned that enough moderates were blanching at the cost of the package to threaten its passage.  President Obama met with the ringleaders of this neo-Hooverist movement, Sens. Ben Nelson and Susan Collins, and talked them part of the way off the ledge.  They were planning up to $200 billion in cuts, but now have pared that down to closer to $100 billion.  And in exchange for meaningless tax cuts and stupid initiatives like tax breaks for home and auto buyers (reinflating the bubble at great danger to the economy), they want to screw the states:

Sens. Ben Nelson (D-NE) and Susan Collins (R-ME) have come up with a list of about $100 billion in programs they want slashed from the stimulus package, according to a working draft of a staff paper outlining the cuts.

Among the biggest cuts under discussion: $24.8 billion in state stabilization money for education, which was intended to plug existing budget holes; $15 billion in state incentive grants for education; and $1.4 billion for the National Science Foundation, which is wracked by a porn-viewership flap. Pell Grants were the biggest program to survive the debate over cuts, with $13.9 billion staying intact.

Senate Democratic leaders are likely to bring this package up for a floor vote today, aiming to achieve a filibuster-proof margin in support of these cuts before pushing to pass the entire stimulus by day’s end. Hang onto your hats.

Ben Nelson is now backing away from this draft, and it’s no wonder.  This would cripple states like California facing bug budget deficits.  They didn’t want to release these cuts until now because states having to fire cops and firefighters and teachers is deeply unpopular.  But that’s what slashing the stabilization fund would do.  Given that budget money is fungible, that wouldn’t just affect education but practically everything that states do.

This is typical of an anti-democratic body like the Senate, where the relative power of a state with 400,000 residents like Wyoming and one with 38 million like California is the same.  California has a budget deficit bigger than the expenditures of 39 states and has all sorts of needs that could be filled by this package, creating hundreds of thousands of jobs and acting as a backbone for economic recovery.  But you have small-state neo-Hooverist idiots like Charles Grassley who think their job is to sink the economy, apparently:

The House bill, written by the committee chaired by Rep. Henry A. Waxman (D-Beverly Hills), gives considerably more money to states whose unemployment rates have increased significantly. That would put California, with a 9.3% jobless rate in December, in the top tier of recipients — along with New York, Florida and others.

The House “took an approach that recognizes that in the current recession, all states need some help, but some need more help than others,” Waxman said. “It is only fair that the hardest-hit states with high unemployment receive more assistance than those with low unemployment.”

But senators in some smaller states say the House provision would shortchange their constituents. “The legislation is biased to big states,” Sen. Charles E. Grassley (R-Iowa) argued.

That’s like saying the legislation is biased to people.

None of these people are explaining WHY the price tag has to shrink; it just does.  And if it needs to go down, there are useless, not-multiplier tax cuts for businesses and people that can afford new cars and homes that have little to no stimulative value.  They didn’t have to insert them in the first place.

It would be absolutely absurd to cut off states – who are not to blame for the financial meltdown, and who cannot deficit spend – in exchange for giving away more tax cuts, with the same failed philosophy that got us into this mess.  Now that these cuts are out in the open, there should be outrage.