Obama Trying Too Hard For 'Cool' Vote?

George Stephanopoulos asks this question on this week’s The Bottom Line video, addressing the political reaction to President Obama’s visit to Late Night with Jimmy Fallon earlier this week. The segment under particular scrutiny is the “slow jam” session President Obama did in response to the vote before Congress preventing student loan interest rates from increasing this summer. The GOP has become particularly defensive about this issue.

I wasn’t going to even watch the video of Obama slow jamming. It just didn’t seem that interesting. Sure, it’s funny, but it’s not like Obama hasn’t done late night shows before. Then I saw something about Fox and Friends host Gretchen Carlson calling his appearance on Fallon, “nutso.” Being Fox and Friends, I didn’t think much of it. The backlash continued. A Missouri GOP House Member was reported to say in apparent response to the video that student loans gave America “stage three cancer of socialism.” Even that was not reason for me to watch. Republicans in the House have said much worse. But now we have George Stephanopoulos, of all people, reducing the issue to, “Campaigning for the ‘Cool’ Vote.” I drew the line. No, George. The President is just trying to do what is right.

The bill has stalled in Congress over a political tug-of-war of how to pay for the student loan stabilization. Keeping interest rates at their current level of 3.4% will cost about $5.9 billion over the next year (this is only for a one-year extension). The Democrats’ bill asks that the $5.9 billion be paid for by boosting the payroll taxes on the owners of some privately held firms. Republicans are in agreement. They do not want the interest rates to go up (though it should be noted the Paul Ryan budget passed by the House accounts for the rates to do just that, ostensibly a ‘yes’ vote for rate increases). However, the Republican proposal looks to offset the costs of the student loans with cuts from health care funds reserved for low and middle income families. Essentially, the Republicans would save money for middle class families by taking money from middle class families.

Stephanopoulos questioning whether the President is simply using this as a wedge device between himself and his presumptive opponent, Mitt Romney, is not totally ludicrous. Much has already been made this week about President Obama’s sliding popularity with young voters. But Obama’s push to keep student loan rates constant is not some pedantic attempt to win the youth vote. The President is doing what should be done. Middle and low income families are the ones struggling right now. The highest income earners are not, and have not struggled for decades. The GOP has blocked any and all attempts to request the wealthy start paying a little more in taxes because they argue during a recession ‘is not the time to raise taxes.’ They argue taxes should remain at their current level (extend the Bush Tax Cuts for the wealthy), even if it adds to the deficit, because now ‘is not the time to raise taxes.’ Why then, for the sake of the economy, is there a fight to take money out of the hands of lower and middle income families? Money that pays off student loan debt will not be spent in the marketplace. We’re already dangerously close to dipping back into a recession. Taking money from the consumers’ hands makes no sense. The President recognizes this, he recognizes the struggles that everyone but the ultra-wealthy are experiencing right now. Even Mitt Romney recognizes the GOP is botching this one. He’s come out in support of the extension, though he too endorsed Paul Ryan’s House budget.

Stephanopoulos’ analysis is, in my view, completely off the mark and devoid of import. His concern is: ‘Who does this help come election time?’ and ‘Is Obama pandering?’ His morning show routine has made him complacent to ask the difficult questions. In a country of disillusioned youth, a generation who view their own government not as ally but foe, we need a President who can identify with this new generation of voters, who can laugh with them, and maybe come out to the ‘playground’ for a game every so often. They don’t need another authority figure in their lives telling them what to do. They need someone who is listening (and will occasionally sing a slow jam).

Obama's Debt Problem? He's Served Leftovers

We’re going to see a lot over the next few months prior to the 2012 Election (as maybe some of you have seen already these past few months) charts and graphs excoriating President Obama’s lavish “spending” and how he will have increased the debt by nearly $5 trillion dollars over his first term, equal to Pres. George W. Bush’s full two terms in office. In truth, that’s a hell of a lot of money. And since Congress is steadfast in their opposition to any revenue raising legislation, our debt “crisis” will only get worse if conservatives win this election. But how is this even possible? How could Obama gorge himself so substantially in just a few years to the same tune as Pres. Bush did in eight? Well, turns out these figures only explain half the problem. It wasn’t that Obama waltzed up to the “per-pound” buffet and just started piling food on the plate. Sure, he went and picked a few of the things he liked, but when GWB got up from the table, he slid a mass of half-eaten food right onto President Obama’s plate before cutting out on the bill.

Last year, during the debt-ceiling debacle, Republicans were quick to judge Obama’s policies over his first two full years in office as “out of control spending”. The debt had already risen substantially during Obama’s first term in office, and someone had to put their foot down and say, “No more.” Republicans, led by a hungry scad of new Tea Party legislators, were just the team for the job. But while conservatives were quick to chastise the President, and liberals in general, for their lavish spending, most notably the $1 trillion stimulus package, they failed to recognize that much of the fast-increasing debt was from policies that they enacted during a Bush II presidency.

The previous winter, Republicans held lower- and middle-class tax cuts hostage unless tax cuts for the very rich, those making over $250,000 per year, were extended also, i.e. the Bush Tax Cuts. The Bush Tax Cuts contributed to over $1.8 trillion worth of Bush’s total debt by time he left office, and they continue to do so today. It should be noted as well, that this figure alone disproves the mantra that tax cuts for the wealthy pay for themselves by spurring new hiring and hence increasing tax revenue from the working class. If that were true, the Bush Tax Cuts would have reduced the deficit.

And then there’re the wars in Iraq and Afghanistan. These mired military engagements have cost a staggering sum, not only in dollars, but in American morale and American lives. And really, what have we gained? That’s a discussion for another time. But these are Bush-era holdovers, Republican policies gone awry, and Obama is left to clean it up. Indeed, he has done an exceptional, responsible job in this regard, ending military operations in Iraq and continuing to wind down our involvement in Afghanistan.

What we have is a large bevy of Bush-era policies, continued by Republicans through the Obama administration, that are the sole reason for our national debt issues. But don’t take my word for it. This chart was released amidst the debt-ceiling debate last year highlighting new policies enacted under George W. Bush and new policies enacted during Obama’s first term in office.

The contextual view is that Obama’s policies have increased the debt, but his new policy measures were only temporary expenditures meant to stabilize a depressing economy. If he had not been shackled with so many poor policy decisions of the previous administration, the country would be in a considerably better position now than we are. If the Bush Tax Cuts for the wealthiest had not been extended, that would be $1 trillion off Obama’s “tag” right there. If Bush hadn’t let the housing bubble inflate and burst so disastrously, Obama wouldn’t have needed his own stimulus package (it does one well to remember that Bush bailed out the banks and enacted his own stimulus package in the wake of the financial crash of 2008), and been left with high unemployment leading to decreased tax revenues, both of which are impacting the debt substantially.

I mean, these are pretty clear numbers here. Based on the policies Obama has enacted, he will only raise the deficit less than $1.5 trillion over an 8 year period. That’s 1/3 of Bush’s total over that same time period. The massive increase in debt over the past few years has been partly due to the stimulus and the effects of the Great Recession, but the rest has been the leftovers from what will be considered one of the worst presidencies in American history. Yes, there is some validity in the argument that Obama should have been stronger and Democrats should have done more to end Bush’s ridiculous policies. I agree with that. But when it comes to the deficit hawks’ fanatical insistence showing “Obama’s out of control spending,” it’s all just politics to get a Republican back into office to continue the same policies Bush used to bloat our national debt in the first place.

Washington Dysfunction: Buffett Rule Defeated (For Now)

Yesterday, the Senate voted down debate on the ‘Buffett Rule,’ effectively ending push by Democrats, including President Obama, the most vocal proponent of the law, to make the rule law. In a highly partisan vote, the measure was voted down 51-45, with only one Republican voting to continue debate, and one Democrat voting against the bill.

Republicans, with their blind intransigence to any sort of tax increase, do not see the bill as a viable solution to addressing either the deficit problem or unemployment. House Majority Leader Eric Cantor has a better idea (more on that shortly).

Republicans essentially have two points of contention with the ‘Buffett Rule’. One, they argue, is that the bill does not significantly address the mounting debt in the country, which is true. The bill will only raise about $46 billion over 10 years. And that money would likely go to small businesses in the form of tax breaks for hiring new workers. Their second contention is that the target group, those making more than $1 million per year, is unfairly asked to pay an even greater share of the overall tax burden. Republicans argue that the wealthy pay an enormous sum of federal taxes, while many in the middle and lower classes pay nothing at all. Again, that’s all true, but when the top 20% control 80% of the total wealth of the country, yet only pay 40% of the total tax burden, their argument loses some leverage. And what Republicans never account in their “the wealthy pay enough taxes” argument is that the middle and lower classes pay a substantially higher proportion of their tax burden in state, local, and payroll taxes.

Republicans do, however, have an alternative solution. House Majority Leader Cantor is expected to bring a bill forward this week targeting tax breaks for small businesses in an attempt to spur investment and hopefully new hiring. The problems with Cantor’s bill are that one: the $47 billion price tag is simply going to be added to the deficit, a seemingly anathema proposal to Republicans over the past two years, but now do not seem to think much of a problem since tax breaks always lead to new hiring and hence more tax revenue. Except they don’t… And that’s the second problem, the Republican alternative relies solely on optimism and that business leaders will invariably invest their tax breaks back into their business to grow. But without customers, businesses are not likely to do any such thing.

At least with the Democrats proposal, the money generated from the ‘Buffett Rule’ will provide additional tax breaks to small businesses by incentivizing new hiring. Republicans protestations that the ‘Buffett Rule’ does nothing to address the unemployment problem are simply not accurate.

But I think this latest squabble again encapsulates perfectly the growing dysfunction in Washington. Republicans propose a plan that adds roughly $45 billion on to the deficit. Democrats have a plan ready to raise roughly $45 billion over the same time period. Why is it so difficult for any of the over 400 members of the House, or the 100 members in the Senate to see they need only put these two bills together? The costs offset. Republicans get their small-business tax breaks to spur investment (a popular position with the American people). Democrats get to raise taxes on the wealthy and address ever-so slightly the deficit problem (popular positions with the American people).

But I don’t foresee this happening. By doing so, Republicans would inadvertently admit that you can spur investment and growth by taking slightly from the rich and giving to the poor(er).

Dems Target Romney Tax Loophole

In a companion piece to my earlier post, Democrats are also looking to close a tax loophole that allows hedge fund managers to avoid paying the standard 35% tax rate on their capital gains, a loophole used by presidential candidate Mitt Romney. The loophole would reduce the deficit by $23 billion over the next ten years.

"Under current tax law, certain kinds of financiers, including private equity investors and some managers of hedge funds, are allowed to treat bonuses like long-term investment income, called carried interest, taxable at the maximum 15 percent capital gains rate. Others have to pay up to 35 percent taxes on their labor income. The cost to the U.S. Treasury is more than $1 billion a year."

Continue reading here.

Sucker PAC'ed

President Obama today reversed his long-standing position on super PACs and his supporters donating to them. For a long time Obama has spoken of the dangers of the super PACs and the potential threat they pose to our elections and to democracy as a whole. Since the Citizens United decision back in January 2010, PACs have been able to raise unlimited amounts of money to spend in political campaigns without having to disclose their contributors, nor do the politicians affiliated with these PACs have to admit to any collaboration with them. These PACs have dwarfed the standard PACs of the past, and hence have now become "super" PACs simply based on the financial muscle they can now flex in influencing voters through attack ads. Some have argued that this wouldn't happen, but it's pretty clear the impact super PACs are going to have on the 2012 Presidential election already as evidenced by the brutal Republican primary currently taking place.

Now that Obama has changed his stance on the issue, how will this fair for his campaign and the democratic base. Over at The Huffington Post, Sam Stein writes an intuitive article on the potential impacts it could have on the left and Obama's supporters in general. And I have to agree mostly with what he is saying here. It does not seem likely that the base will abandon the President at all (especially given the choice of potential candidates coming out of the right). Sure, they're going to be angry with the President for a little while, but they will likely see this as consolation for the very nature the Citizens United decision has cast over the country. Just look at what the Koch brothers announced at a dinner this past weekend. The thing is, this presidential election is going to be costly and it's going to be downright ugly. The republicans have already shown their hand. They're attacking one another maliciously. Once the dust settles there, and all these super PACs focus their attention on the left, it's going to be worse. I for one will be happy the President has some allies in his corner to help. I don't like it, certainly, but he can't bring a knife to a gun fight.

But here is what I would hope the President does. He needs to continue to denounce super PACs and the Citizens United decision in general. He needs to reestablish his push for campaign finance reform, even though now it may seem hypocritical and he may have a hard time selling the public in general. But I think if he doubles-down on campaign finance reform he can at least appease the dissatisfied voters that are going to pop up because of this decision. And it's not really being hypocritical. Just because he wants to amend the rules of the game he's playing, doesn't mean he can't play by the rules already established. Mitt Romney made such a case for his 13.9% effective tax rate. After receiving initial criticism for for how little Romney actually pays in taxes, and that he has money in offshore tax havens, he argued not to begrudge him, he's just using the rule of law. And it's true. But Romney has made no mention that he wants to balance the disparities of the tax code (his tax plan will actually make it worse). President Obama still has the chance to do this, to make this argument against his opponents trying to draw him as hypocritical for this decision. Play the game by the rules. If you see a better way for the game to be played, make your voice heard and the people will follow.

Gingrich Putting the Children to Work

With the Republican Presidential nomination race maintaining its highly contested aura, the candidates are searching for ways each can pull ahead. Generally such a highly contested race might spur some candidates to veer more towards the middle, to a more moderate stance in their party to avoid becoming the outlier, the crazy one, and draw more supporters. If we look back at the 2008 Presidential election, there were many independents on the fence about voting for an untested Barack Obama, but when it came down to it, they couldn’t bring themselves to lay down their vote for the gaffe-prone, “rogue,” Sarah Palin, John McCain’s Vice Presidential pick. After the landslide margin of victory for the Democrats in that election, you’d think the Republican Party might have turned down the far Right rhetoric. But it only seemed to get worse after Obama took office. And now here we are one year out from the 2012 election and it seems the crazier the Republican nominee, the better chance they have of winning the nomination.

That’s where Newt Gingrich comes in. Once considered completely out of the race, suddenly the former Speaker of the House finds himself in the lead with a slight edge over former Massachusetts Governor Mitt Romney. Romney has had his share of problems, mostly his John Kerry-like indecisiveness and “flip-flopping” on key issues. (I use the term ‘flip-flopping’ here loosely. Romney, I feel if elected, would actually move far more the Left of his current positions on certain issues. I believe he’s aware that the GOP has shifted drastically Right since Obama’s election and to simply court the vote, Romney is veering far Right until the nomination.) Gingrich, on the other hand, has simply maintained. He has not had the major flubs that Michelle Bachmann and Gov. Rick Perry have had. Also, despite Gingrich’s marital problems, no extra-marital affairs or sexual harassment allegations have sprung up, like nose-diving Herman Cain. What Gingrich has going for him thus far seems to be only that he is the GOP’s self-professed “ideas man.” What exactly has Gingrich come up with lately? Well, this week he once again attacked child labor laws defending a remark he made in mid-November for how ‘truly stupid’ they are. Frankly, if these are the types of ideas a Presidential nominee is going to come up with, I fear the Right is far more out of touch with the American public, and the American economy than most realize.

How exactly putting children to work will help the economy, and more specifically the unemployment rate, is something the prospective nominee does not purport to theorize. But, nonetheless, Gingrich is maintaining his stance on this issue. He believes that ‘poor’ children do not know how to work, that their work ethic is nonexistent because if they are poor, then surely their parents must not work. Gingrich glances over the fact that 15% of the country, 46 million people, are in poverty. The official unemployment rate is just below 9%. That means that 6% of the population works, but is still below the poverty line. That’s not lack of motivation, that’s lack of livable wages in the private sector. But say that Gingrich does somehow manage to rollback child labor laws, and his idea of putting school children to work with janitors in the evenings is implemented. How exactly does this help unemployment? Children are not officially counted in the unemployment rate. So, that would not dent the unemployed. But, if suddenly schools are allowed to hire children for less wages, thus more hands, they could feasibly layoff adults working in the school, which would actually worsen unemployment.

And what exactly does this do for a child? True, I’m sure they’d get valuable experience learning how to clean toilets and clean up kindergartener’s puke, if they aspired to be janitors when they grow up. Children should not be made to work in school. Parents should be raising their children. (Is this big government from Newt Gingrich?) Children should be concentrating on bettering their education, not what cleaning product works best on permanent marker scribbled on school lockers. A better education for the youth of our generation is the only means to a better future. India and China, the two fastest growing economies in the world, have invested billions into their education systems and they are leading the way in graduating math and science students, producing future innovators and entrepreneurs. It’s true that an after-school work program might keep a lot of kids off the streets and it will better prepare them for the future by teaching them needed skills, but it should be a voluntary, unpaid program. It should be like an internship program, or provide extra-credit for students struggling with their grades. Or perhaps it could be used as a reduction in school taxes for those parents whose children join the program. Lower taxes? Every Republican can get onboard with that one.

And speaking of China: until recently the country had very lax child labor laws. Comparatively to the US, they still do. Maybe Mr. Gingrich doesn’t quite remember sweat shops? Maybe Mr. Gingrich doesn’t quite remember our own sordid history with child labor in the fields and factories of the early 1900’s? For someone who’s written so many books, especially on history, I find that hard to believe. Maybe someone needs to remind Mr. Gingrich of the Triangle Shirtwaist Fire of 1911? The point is this country has already seen it’s more than fair share of needless accidents involving the deaths of workers, especially children who were put into unsafe working conditions. We enacted laws to better safety standards of factory conditions so that workers are not risking their lives to make below poverty rate wages. The funny thing that happened along the way though is that as American labor laws became stricter, the factory owners and “job creators” just took their industries overseas to China, Taiwan, and Vietnam, to name a few. Sure enough, however, the same thing that happened here is happening overseas. There have been countless reports of death and injury in Chinese factories where the labor laws were extremely lax. But after some very public, egregious stories of operose workers being hurt, especially poor children from China’s vast countryside coming to the booming cities for work, the country has had little choice but to enact stronger labor laws to protect its people from unsafe American business practices. Why then, in a bit of hyperbole, does Mr. Gingrich wish the United States to rollback our labor laws and become more aligned with Communist China? Isn’t Obama supposed to be the socialist Kenyan, Newt?

Finally, I think the biggest problem I have with this whole idea of Gingrich’s is that he specifically points out that “poor” children are the ones in need of a solid employed role model in order to garner some kind of proper work ethic. Why is it just poor children who need this? What kind of work ethic do rich kids have that poor children do not? Poor children do not see how their parents boss the maid around the house in order for the maid to pick up after the messy child. Do rich children by some under-reported phenomenon, some kind of osmosis of ambition, absorb the ingenuity, the entrepreneurial spirit that their parents supposedly have? What about the children of Bernie Madoff? What kind of work ethic do they have if their father’s wealth came from crime? And what of the executives on Wall Street who crashed the economy with fraudulent mortgage foreclosures, mortgage-backed securities, derivatives, etc.? Sure these people made a lot of money, and they stole a lot of money from the country and the middle class. Is this the type of “ambition” that Mr. Gingrich feels we should be instilling in all our children?