Senate filibuster, Boehner and pics

Here are some reflections on two significant events in Washington last week concerning Senate productivity and Obamacare.

The Senate voted to return some degree of democracy to that chamber.   Senate Majority Leader Harry Reid allowed a simple majority of the Senate to approve allowing Presidential nominations (other than for the Supreme Court) to be approved by a simple majority of Senators.  The response to this feared “nuclear option” was, well, just more of the same passive filibustering by the minority opposition refusing to allow the Defense authorization bill to advance.   Requiring a “talking filibuster” to hold up any legislation in the Senate should be the next rule change.

Last week also saw a major step forward for Obamacare.  House Speaker John Boehner enrolled in a health insurance plan through an online healthcare marketplace.  The world didn’t end.  No one lost their job.  And the government did not get between Speaker Boehner and his doctor.  Take notice Obamacare-haters.  Your leader willingly and successfully enrolled in Obamacare. 

Below are some pics from my meeting last week with Deputy Secretary of the U.S. Department of Energy Daniel Poneman in Charleston.  The bottom pic includes Sandy Bridges, owner of Palmetto Hammock (49 S Market St, Charleston) and big supporter of our sea level rise education project (SCBARS.org) for small businesses.

 

 

God made them do it

Please call South Carolina Congressmen Jeff Duncan, Tim Scott and Mick Mulvaney and tell them that God did not tell them to oppose Speaker Boehner’s deficit reduction plan, Senator Reid’s plan or anything dealing with the fiscal integrity of our country. These gentlemen need to quit hiding behind God for their partisan decisions. I am quite confident that She doesn’t like it.

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Politico
July 29, 2011
South Carolina vs. the world in House

By: Marin Cogan and Jonathan Allen

The delegation that prays together stays together — just ask South Carolina’s House Republicans, a bloc of five lawmakers that have proved some of the toughest votes to crack as GOP leaders push to flip votes for their deficit reduction package.

Early Thursday evening, three of the South Carolina freshmen — Jeff Duncan, Tim Scott and Mick Mulvaney — convened in a small chapel adjacent to the Capitol Rotunda to talk and pray about the vote.

Rep. Joe Wilson, the only senior colleague in the group, entered the speakers office around 6 p.m., around the same time Republicans were supposed to bring their bill to the House floor. The South Carolina freshmen were in and out of Majority Whip Kevin McCarthy’s office throughout much of the night, as leaders tried to determine what, if anything, could be done to change their minds.

Scott emerged briefly before 10 p.m. to tell reporters he was still a no. Not long after, leadership canceled the vote for the night.

As freshmen members of Congress, the close ties among the South Carolina freshmen stand out. They regularly pray together and are in near constant communication with one another about their votes. They dine together on Capitol Hill and play basketball in the House gym. Two of them, Duncan and Scott, share an apartment.

Their bonds developed before they came to Washington. Duncan, Scott and Mulvaney served together in the state legislature and both Scott and Gowdy belonged to the South Carolina-based Liberty Fellowship before their election to Congress.

The freshmen are some of the most conservative members of their class—Mulvaney proposed an amendment to the Defense Appropriations bill two weeks ago to freeze defense spending at FY 2011 levels and was soundly defeated by members of his own party. Last month, he opened up to POLITICO about his delegation’s “South Carolina versus the world” mentality.

“I know it’s been frustrating to our leadership sometimes, because they look at South Carolina and say, ‘What are these crazy guys going to do now?’ But all we’re doing is being true to our state,” Mulvaney said.

Duncan said at that time that their leadership had “gotten the message very clearly early on from us. They know we’re going to talk; we’re going to try to be like-minded when it comes to representing South Carolina.”

The positions taken by Sen. Jim DeMint — a conservative powerhouse nationally and especially in the state — undoubtedly loom large over the House delegation. The House freshmen periodically put DeMint on conference call to seek his advice on votes. DeMint was a strong opponent of the Boehner plan, appearing at a Tea Party rally Wednesday to urge members of Congress to “hold the line” against any vote but the Cut, Cap, and Balance plan passed in the House. The four freshmen insisted they were “no” or “lean no” votes throughout the week.

Asked whether divine intervention might hit during prayer Thursday night, Scott said: “Divine inspiration already happened. I was a lean no, and now I’m a no.”

Balanced deficit reduction

As the debt ceiling debate rages on, it appears that Congress and the President are looking at a plan to simply raise the debt ceiling enough to allow the federal government not to default for a short period of time and do some budget cuts along with it. What a tremendous waste of an opportunity to address the issue of multinational corporations using tax loopholes and offshore tax havens to avoid paying their fair share of taxes.

There is an estimated $1 trillion dollars of taxes over the next decade that these multinationals should be paying but won’t if we don’t change our corporate tax laws. That equals 1/4th of the debt reduction goal President Obama said he wanted. It’s low hanging fruit that these corporate giants and their advocates like the U.S. Chamber won’t let us pick because of all the campaign contributions and lobbyists at their command.

Fortunately there are other business organizations that understand the need for a balanced approach to deficit reduction that includes both budget cuts and responsible, common sense revenue increases.

Below is a letter from the American Sustainable Business Council being delivered today to House Speaker John Boehner and Majority Leader Erick Cantor. Copies are being given to the President and other Congressional leaders.
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July 19, 2011

RE: Debt Ceiling, Taxes and Deficit Reduction Approaches

Dear Speaker Boehner and Majority Leader Cantor,

The American Sustainable Business Council is a network of business associations and companies representing over 100,000 businesses across the nation. Our members are part of a growing force within the U.S. economy that understands that financial success requires balancing economic, social and environmental needs.

We see an enormous opportunity in the public debate over the budget and debt, for fundamental reforms to grow our economy and strengthen our country. However, we do not believe the conversation is heading in the right direction. We are concerned that offshore tax havens, growing income inequality, rollback of environmental and safety regulations, and divestment from infrastructure and workforce development, present serious challenges to our global competitiveness. The continued practice of discounting externalities, subsidizing highly profitable mature industries, and rewarding off-shoring of U.S. jobs has contributed substantially to the national debt and undermined the health of the U.S. economy.

As businesspeople, we also believe that the tax code needs to be significantly modified so that small and mid-sized companies and middle class families, are not asked to pay a disproportionate amount of taxes. We are quite willing to pay our fair share, but find it troubling that many of the nation’s largest companies pay an effective marginal rate far, far less than we do.

We write to ask you to re-examine your basic assumptions of what is required to stabilize the U.S. economy and address the budget deficit. Please understand that not all business leaders agree with many of the points you make daily in the name of defending the private sector. It is inaccurate to lump together large and small business—and businesses in every sector of the U.S. economy--as if all of our interests were exactly the same. Some might see this as a strategy to use the halo of small business to camouflage the excesses of big business.

We do agree with the U.S. Chamber of Commerce and the Business Roundtable that we must raise the debt ceiling, and soon. However, we find that a diversity of business voices is not being heard on the specifics of the current budget debate. Many business leaders believe that raising revenues through tax code modifications, and supporting federal government services, is critical for economic health. Cuts to programs for the young, old, disabled and unemployed will hurt not only our customer base, limiting their capacity to buy our products, but our nation as a whole.

Further, we disagree with the perspective that any tax increase destroys jobs. We believe that there are important distinctions to be made between good taxes and bad taxes, between incentives that create jobs and real value for the economy and those that don’t. There are expenditures that are critical to improving productivity and the nation’s infrastructure and those that are a waste of money. Removal of certain subsidies for mature industries, in our view, does not constitute a tax increase but rather a smart business decision. This is how we run our companies – moving resources towards areas of greatest need in a constantly changing marketplace.

We would point out that during the 1980’s, President Reagan raised taxes many times and unemployment continued to fall. And, when President Clinton raised taxes in 1993, unemployment fell and investment expanded. We would like to see the discussion of job creation using proven methods re-elevated in the national debate, including government investment in areas of significant national interest, such as renewable energy development, manufacturing, education, high speed rail and basic R&D. The private sector and federal government must work together to ensure that America not only remains an economic powerhouse, but also a nation built on principles of fairness.

We have two other important concerns: (a) the largest companies rarely pay the statutory rate, instead often paying half that in practice while small businesses, who account for most of the net job growth, consistently pay higher tax rates; (b) job creation in America is our top priority. To that end, we need to ensure that reduced tax rates actually result in jobs being created here at home, rather than being shipped overseas.

As this crisis is turning on fixing the Federal budget, we would highlight that the tax burden is being described as if the prosperous—whether individuals or corporations—are paying taxes at the highest marginal rate. A few of the nation’s wealthiest citizens claim that they are paying 50% of their income in federal or federal and state taxes. They are not.

In fact, the effective rates of taxation—the real rates that wealthy individuals and corporations pay—are half the highest marginal rate or less. Corporate taxes as a share of federal government receipts are at their lowest level since the 1950’s. Fixing these distortions and closing huge tax loopholes and subsidies in our Federal budget to generate revenue should be at the heart of resolving the current crisis.

With this as background, we offer a set of principles and solutions that our members see as essential to getting our country back on track:

Principles

• Taxes have a critical role to play in funding research to generate innovation and growth, providing for our national defense, and creating an equitable economy.

• Raising revenue to fulfill essential obligations, such as maintaining/improving infrastructure is smart policy, as are taxes that fund workforce investments.

• The national burden for debt reduction should not fall on small companies.

• Small and mid-sized businesses use their assets to reinvest in their communities and workforce. They are the backbone of the U.S. economy, creating most of the net new jobs over the past decade.

• Regulations are needed, as the marketplace isn’t perfect. We find that carefully crafted regulations can save more money than they cost, as evidenced by the inadequacy of banking regulations that cost our nation over one trillion dollars in lost assets.

Solutions

• Reducing the budget deficit should not be achieved exclusively by reducing public expenditures, many of which improve the nation’s competitiveness. Drastically cutting expenditures will also likely increase the unemployment rate. Revenue enhancements should be a key part of proposals for deficit reduction.

• Taxes that assure a stable middle class and maintain consumer demand—key to our economic future—are welcome.

• An effective and graduated Corporate Alternative Minimum Tax could assure that companies pay their fair share of taxes. Small businesses pay on average far higher effective rates than most Fortune 100 multinationals because of widespread use of tax havens. The Stop Tax Havens Abuse Act of 2011 would go far to close these loopholes. We must stop subsidizing the largest and wealthiest corporations at the expense of our domestic businesses and the national economy.

• Corporate subsidies should be limited to spurring innovation, preserving the environment and public health, hiring veterans and minorities, and other job creating initiatives. Initiatives such as the Small Business Jobs Act are relatively inexpensive ways to continue to spur growth.

• America’s wars should either be paid for by surtax or by adjusting the defense budget. The defense budget should not be immune from cuts. Due to deficiencies in the federal contracting process, which appear to favor a few large corporations, we believe there is room for substantial savings.

We have not endorsed any comprehensive deficit reduction package, however select policy solutions in line with these principles have been proposed by groups as diverse as the Congressional Progressive Caucus, the Cato Institute, and the Bowles-Simpson Commission. Estimates suggest that enacting policies in line with these principles could easily save upwards of $2.75 trillion dollars over a decade, without cutting into essential federal programs on which this nation was built.

A ‘sustainable’ economy focuses on building long-term value and assets. It invests in next generation ideas and technologies while contributing to the well-being of our communities. We believe these ideas and policies to be consistent with a fair marketplace, represent the views of thousands of small businesses across the country, and will foster long-term economic prosperity.

Thank you for your consideration and interest.

Sincerely,

David Levine, Executive Director
American Sustainable Business Council

For the sake of small business "Repealers" should repent

As my friend Sue Berkowitz, Director of the S.C. Appleseed Legal Justice Center, said in an email, “What took them so long?”

Sue was reacting to the news yesterday that the House Republicans will begin a floor debate on repealing the Affordable Care Act (the ACA is healthcare reform for those still looking for a more catchy title) this Friday with a final vote set for January 12th.

But while Speaker John Boehner and House Majority Leader Eric Cantor feed their base with a doomed repeal effort, the Small Business Majority released an eye-opening survey today of small business owners. The Affordable Care Act’s health insurance tax credits and insurance exchanges for small businesses will do exactly what was intended—encourage small businesses to offer employer-based health insurance because it will be more affordable.

Key findings of the survey:

• One-third (33%) of employers who don’t offer health insurance said they would be more likely to do so because of the small business tax credits.

• 31% of respondents—including 40% of businesses with 3-9 employees—who currently offer insurance said the tax credits will make them more likely to continue providing insurance.

• One-third (33%) of respondents who currently do not offer insurance said the exchange would make them more likely to do so.

• The same is true for those who already offer insurance, with 31% responding that the exchange would make them more likely to do so.

And just for the record, 41% of the small business owners randomly surveyed identified themselves as Republicans with 27% and 21% saying that they were independents and democrats respectively.

This positive impact of the ACA has also shown up in insurance companies reporting increased numbers of small businesses now offering health insurance due to the health insurance tax credits that went into effect this year.

However, the most distressing result of the survey was that “most respondents are not familiar with the exchange or the tax credits; only 31% of respondents are familiar with the exchange and 43% are familiar with the tax credits.”

Had the critics of the ACA put as much effort into educating the public about the benefits of the ACA for small business and the public as they have in demonizing it with misinformation largely for political purposes, we would have far fewer uninsured Americans today. But that is the price the country is paying due to the partisanship of politicians.

Common Ground???

In his recent “60 Minutes” interview, incoming House Speaker John Boehner stated that he will refuse to “compromise” on his principles but is willing to find “common ground” on issues. So according to Speaker –in-waiting Boehner the $858 tax-cut package the Senate will pass shortly is “common ground” between Congressional Republicans, Democrats and President Obama.

How long the rank and file Tea Party folks are willing to swallow this “chicken crap” I don’t know. Their silence has been deafening on this GOP-caused deficit spending less than two months after the Tea Party apparently gave the Republicans the power to dictate all legislation in Washington.

I’m not saying that there aren’t some “common ground” parts of the Senate bill. But the biggest piece of the bill that was definitely “common ground” was extending the Bush-era tax cuts to all income under $200,000 for an individual and $250,000 for a joint return. Both the Republicans and Democrats said they wanted that. Had they just passed that, we could have limited our deficit spending to about 1/4th of what we will be borrowing from the Chinese under this bill.

But the GOP would have none of this unless income over those limits also got the tax cuts. So off to the deficit spending game we went.

Are there some business benefits in the Obama-GOP deal (oops, is “deal” too close to the word “compromise” for Mr. Boehner’s vocabulary)? Sure there are. But there are plenty of goodies in there that will help the economy (like extending unemployment benefits) and that won’t particularly help the economy (tax cuts for the wealthy and estate tax give-aways for multi-million dollar properties). Most of this was “compromise” regardless of Mr. Boehner’s objection to the term.

From the small business perspective, one truly “common ground” item not making it into the tax-cut package was the universally disliked 1099 IRS reporting requirement included the Affordable Care Act. This provision was estimated to bring in about $19 billion over 10 years to help cover the cost of the ACA. But all the business community and both parties agree that it will be a terrible hardship to comply with because it would require 1099’s for all business purchases of over $600.

According to yesterday's story in POLITICO, Republicans rejected this “common ground”. Just look at the total cost of the package and you know that a mere $19 billion more couldn’t have been the reason.

As my friend John Arensmeyer, CEO of the Small Business Majority, points out in a press release below—this “common ground” was grounded by partisan politics.

Political Gridlock Shouldn’t Hold Up 1099 Fix

Statement by John Arensmeyer, CEO, Small Business Majority

Dec. 13, 2010
Reports of partisan gamesmanship blocking the Senate from fixing the 1099 reporting requirement as part of the recent tax cut deal are not only discouraging but also infuriating. We’re disappointed there are those in Congress who would turn small businesses’ success into a partisan issue. There are millions of small business owners who need relief from this provision, which would place an onerous and unnecessary paperwork burden on them if it goes into effect in 2012.

The Patient Protection and Affordable Care Act has tremendous benefits for small businesses. The 1099 provision, which was included only as a revenue-generating measure, isn’t one of them. Lawmakers on both sides of the aisle agree this provision needs to be fixed, and more than 90 senators have voted to amend this part of the law. Yet it still exists.

It’s time for those preventing the 1099 provision from being corrected to end the political posturing. We urge all senators to look past their partisan differences and support small businesses by fixing this issue immediately.