| April 25, 2015
Nice Tourism Industry You've Got There, Mr. Jindal. Shame If Anything Happened to It.
These are dark times for Louisiana Governor and 2016 GOP White House hopeful Bobby Jindal. Facing a staggering $1.6 billion budget shortfall, Governor Jindal's popularity is plummeting at home even as he takes his presidential campaign on the road. Making matters worse, low energy prices are leading to layoffs and draining the state treasury as each dollar drop in the price of a barrel of oil costs Louisiana $2 million in lost revenue a year. The situation is so dire that LSU and other public colleges in Louisiana are preparing to file for "academic bankruptcy."
But there is one bright spot in Bobby Jindal's home state gloom. In 2014, Louisiana's $11 billion tourism sector had its third record-setting year a row. Too bad Jindal's crusade to be the face of Republican opposition to marriage equality is putting that at risk, too.
Three weeks before Governor Jindal took to the pages of the New York Times to declare, "I am holding firm against gay marriage," his Lieutenant Governor trumpeted the success of the Pelican State's tourism industry:
2014 was another record-breaking year for the tourism industry in Louisiana. Lt. Governor Jay Dardenne, who oversees the Louisiana Office of Tourism, announced that in 2014 Louisiana attracted 28.7 million visitors, a 5 percent increase over 2013, resulting in $11.2 billion in total visitor spending and $836 million in state tax revenue generated.
"Tourism and hospitality was Louisiana's fastest growing job sector in 2014 with 223,000 Louisianans employed in the industry," Lt. Governor Dardenne boasted. Tourism had yet another great year thanks to creative marketing, dedicated industry leaders throughout the state and an incredible product--the many passions Louisiana offers."
Unfortunately for the "Louisiana: Pick Your Passion" campaign, marriage between two Americans of the same sex isn't among them. And if Bobby Jindal has his way, Louisiana's proposed "Marriage and Conscience Act" will enshrine that bigotry in the cloak of "religious liberty."
The legislation would prohibit the state from denying a person, company or nonprofit group a license, accreditation, employment or contract -- or taking other "adverse action" -- based on the person or entity's religious views on the institution of marriage.
Some corporations have already contacted me and asked me to oppose this law. I am certain that other companies, under pressure from radical liberals, will do the same. They are free to voice their opinions, but they will not deter me. As a nation we would not compel a priest, minister or rabbi to violate his conscience and perform a same-sex wedding ceremony. But a great many Americans who are not members of the clergy feel just as called to live their faith through their businesses. That's why we should ensure that musicians, caterers, photographers and others should be immune from government coercion on deeply held religious convictions.
If Jindal succeeds in his faith-based ploy to please social conservatives in Iowa, those musicians, caterers, photographers, bars, restaurants, hotels and others might find themselves immune from customers, too. Leave aside companies like IBM and EA Sports which have warned Jindal that the free market will not allow them to do business in Louisiana if businesses there don't freely treat all Americans equally. Those millions of people who go to the Sugar Bowl, party during Mardi Gras or pour in for the New Orleans Jazz and Heritage Festival might choose to go without their Hurricanes and beignets.
It would be a shame if Louisiana's tourism industry, one which has come roaring back from Hurricane Katrina and the BP oil spill, was gutted by the boycott Governor Jindal seems determined to invite. If that happens, Louisiana won't be the place Americans go to "laissez les bon temps rouler." Instead, to put in terms even Bobby Jindal can understand, it will be a "no go zone."
| April 20, 2015
The 20 Percent Solution
On April 15th, Congressional Republicans missed their deadline for the fiscal year 2016 budget resolution. Nevertheless, and despite their differences on defense spending and the voucherization of Medicare (absent from the Senate bill), the GOP conferees aim to balance the budget in 10 years by slashing over $5 trillion in social programs and safety net spending, including the repeal of Obamacare. (Their plans are also magically aided by $2 trillion in mythical revenues and mystery savings.) During a recent floor speech, Senate Budget Committee Chairman Mike Enzi (R-WY) described their objectives this way:
"A balanced budget approved by Congress will help make the government live within its means and set spending limits for our nation. Hard-working families are fed up with [President Obama's] spend-now, pay-later policies and are closely following our effort [on] a balanced budget."
Unfortunately, there is little evidence in support of Enzi's argument. As the nonpartisan Congressional Budget Office (CBO) recently forecast, there is no near-term debt problem. Adjusted for inflation, federal spending is lower now than when Barack Obama first took the oath of office. As the economy has recovered, the yearly deficit has been reduced by almost two-thirds since President Obama first entered the White House. And while the national debt as a percentage of the economy has plateaued, projected yearly deficits through 2025 under President Obama's proposed budget remain at or below the 50 year historical average of 2.7 percent. That stable picture explains both why Americans' concern about the budget deficit has eased and why the Fitch rating agency this week reaffirmed the USA's Triple A credit rating.
But there's an even bigger problem for Republicans so eager to swing a heavy budget ax. Since 1965, federal spending has exceeded revenue by that 2.7 percent of GDP. Yet polls consistently show that outside of foreign aid, there is no area of government spending a majority of Americans wants to decrease. And with the inescapable requirements to provide 21st century education and infrastructure even as the population grows older, the U.S. will need to invest more money in its people, not less. All of which means that to the degree that the United States even needs to "live within its means" right now, it should do so not by spending less, but by raising more revenue.
Call it the 20 Percent Solution.
The CBO chart above tells an important part of the story. Since 1965--the year Medicare and Medicaid health care programs were signed into law--federal spending has averaged 20.1 percent of America's total economic output. During the same five decade time frame, Uncle Sam's revenue has averaged 17.4 percent of GDP per year. But across that span, Washington produced a balanced budget in only five years. In 1969, a booming economy and LBJ's Vietnam surtax filled the Treasury's coffers to 19 percent of GDP. Uncle Sam was also in the black from fiscal years 1998 through 2001, as the Clinton expansion and the dotcom boom (with its large capital gains paydays) brought in a tax revenue haul that reached 20.0 percent in 2000.
(Tax cuts and recessions produced the opposite effect. Ronald Reagan's massive 1981 tax cuts were followed by the deep recession of 1982, a double-whammy which tax revenue did not recover until 1985. George W. Bush's tax cuts, combined with a brief downswing in 2001 and the later financial meltdown produced oceans of red ink, and by FY 2009, the lowest percentage tax haul since 1950.)
Now, Americans could shrink the size of government to what they've actually been paying for, if they actually wanted to shrink the size of government. But when pressed to explain where they would chop the budget, poll after poll shows pretty much the same thing: nowhere. In 2008, not even a quarter of conservatives surveyed by the American National Election Study would cut any of the 12 programs listed. A 2010 CBS/New York Times poll of Tea Party members found that 92 percent said they wanted smaller government and fewer services, yet 62 percent said current Social Security and Medicare expenditures were worth it. That same year, an Economist/YouGov poll found that respondents preferred cutting spending to raising taxes to reduce the deficit by a margin of 62 to 5 percent. But as Ezra Klein noted at the time:
The only program that more than a third of the public wants to see cut is foreign aid. Bummer, then, that it accounts for less than a single percent of the budget.
A 2013 survey by the Pew Research Center (above, right) gave an even clearer view of the degree to which Americans want the scope of the federal government preserved or even expanded. Again, foreign aid ("Aid to the World's Needy") was the only area of federal spending where the percentage wanting to decrease funding (48 percent) even approached those wanting to maintain (28 percent) or expand it (21 percent). Huge majorities wanted to keep or increase current investments in education, Social Security, Medicare and infrastructure. The survey said, simply, that all of the biggest ticket items in the budget are off-limits. (Interestingly, the military is ranked lower as a spending priority.)
It is often said of that the United States government is an insurance company with an army. As the CBPP analysis of the $3.5 trillion FY 2014 budget above shows, defense, Social Security, health care (of which Medicare was $511 billion) and interest on the national debt accounted for 73 percent of federal spending. Total non-defense discretionary spending, which among other things includes education, transportation, research and infrastructure is roughly $1 trillion a year. And thanks to the 2011 Budget Control Act (sequestration) and subsequent budget agreements, those very areas so essential to American global competitiveness in the 21st century now represent their smallest share of GDP in over fifty years.
But while President Obama and Congressional progressives want to make the needed investments to secure Americans' standard of living in the future, House and Senate Republicans are heading down a path to a much different end. Under the emerging GOP budget plan, the United States would be an army with a not-very-good insurance company.
The comparison above from the New York Times helps tell the tale. Under President Obama's proposal, tax revenues over the next decade would average 19.0 percent of GDP a year, compared to 17.5 percent in FY 2014. The President raises $1.55 trillion in additional revenue, much of it from a one-time tax on businesses' foreign income and by capping deductions and exclusions for high earners. While spending--including new investments in universal pre-K education, free community college and expanded infrastructure--would reach 22.1 percent of GDP by 2025, that level would still be less than the Reagan and Obama era highs. The 2025 deficit of 2.7 percent of GDP would be in line with the current 50 year average dating back to 1965. (The People's Budget proposed by Congressional progressives would raise significantly more revenue --21.2 percent of GDP over 10 years--while spending more--22.8 percent--to fund major new infrastructure and jobs initiatives as well as new education programs and expanded Social Security benefits.)
But if President Obama and his more aggressive Democratic allies in Congress are closer to adopting the 20 percent revenue solution, their Republican opponents are going in the opposite direction. Revenues plateau around 18 percent over the next decade. But with over $5 trillion in spending reductions starting almost immediately, federal outlays quickly drop to that same share of the economy by 2025. That isn't just two percentage points lower than the historical average; Uncle Sam's spending as a share of GDP hasn't been as low as 18.5 percent since 2002. That was the year before the Iraq War.
And how do Congressional Republicans manage to "balance the budget" by 2025? Aside from their mystery $2 trillion Paul Krugman rightly mocked, they do it by repealing Obamacare, slashing Medicaid spending by a third and gutting outlays for poor and working Americans.
Their to-be-determined tax reform and health care plans are left for the House and Senate appropriations folks to figure out later. Despite the continued slowdown in the growth of Medicare costs and the substantial cost advantage that the federal government provides over private insurers, House Republicans nevertheless want to proceed with their "premium support" voucher scheme designed to dramatically shift health care costs to future seniors.
At the end of the day, setting any target for federal spending and/or revenue as a percentage of the American economy has limited utility or meaning. After all, the Simpson-Bowles commission established by President Obama sought to reduce the deficit to three percent a year by pegging outlays at 21 percent of GDP and revenue at 18. (Republicans members of the commission like Paul Ryan voted against the final Simpson Bowles plan because it called for raising taxes.) Yet, by the end of FY 2014 those targets had been met and exceeded. The government was spending less, but it was raising less, too.
Ultimately, the real question American should ask first before planning any budget, setting any revenue and spending benchmarks or reforming the tax code is this: what do we want the government to do? In his book We Are Better Than This, USC Professor Edward Kleinbard poses that question and provides one answer. If in an era of record-high income inequality, constrained social mobility and stagnant incomes our objectives are still to enable all Americans to enjoy "life, liberty and the pursuit of happiness" in a "more perfect Union" that promotes the "general Welfare," then "we need more government, not less." Looking at the history of the United States and comparable economies around the world, Kleinbard says there is no real mystery to "the secret sauce":
It turns out that progressive fiscal outcomes do not require particularly progressive tax systems -- just big ones, to support substantial government investment and insurance programs.
There is no magic answer to how big our federal revenue engine needs to be. But 20 percent of the American economy is a good place to start.
| April 19, 2015
Swap Mukasey for Lynch, Bush for Obama, Torture for Immigration and Republicans for Democrats
With the President's nominee for Attorney General languishing in the Senate, John Cornyn (R-TX) issued this statement:
"Throughout her career, Loretta Lynch has proven to be an independent voice for justice and a strong advocate for the United States Constitution. Her experience and qualifications as a lawyer, prosecutor and dedicated advocate for the rule of law are unimpeachable and undeniable.
"This position is critical for our continued prosecution of the war on terror. Ms. Lynch's bipartisan support is a recognition that she is the right woman for this job and will do what is needed to protect America's national security.
"My colleagues in the majority party made clear earlier this year that partisan politics have no place in the Department of Justice - this nomination is an opportunity to put those words into action.
"Loretta Lynch's nomination has been delayed now for almost seven weeks. It is imperative that the President has his national security team at full strength and the unnecessary delay of Ms. Lynch's nomination has prevented that. She deserves an immediate up-or-down vote by the full Senate." [Emphasis mine.]
Wait a second. "Delayed now for almost seven weeks?" I just checked the date on that statement. Cornyn, the number two Republican in the Senate, released it on November 6, 2007. The President he was talking about was George W. Bush and not Barack Obama. The nominee was Judge Michael Mukasey and not Loretta Lynch. Democrats, not Republicans, were the new Senate majority. The partisan issue was the Bush administration's illegal regime of detainee torture, not executive action on immigration.
And one other thing. Mukasey was confirmed when the Democratic-controlled Senate held that up-or-down vote after 53 days.
| April 17, 2015
GOP's "One Percenter" Attack on Hillary Clinton Comically Backfires
In 2008, the campaign of multi-millionaire John McCain tried to brand Barack Obama as "elitist" and "out of touch" and "worried about the price of arugula." Four years later, Mitt Romney--the GOP presidential nominee worth at least a quarter of a billion dollars--declared that President Obama "reminded me of Marie Antoinette." Now, Politico tells us, the GOP is planning to "turn Hillary into Mitt Romney":
Republicans are readying a familiar template: The out-of-touch plutocrat who lives in a world of private planes, chauffeured vehicles and million-dollar homes.
But the Republicans' pathetic ploy is backfiring. After all, the now-wealthy Clintons have long supported policies to help working Americans. And while Hillary Clinton has put her money where her mouth is by backing increases in the taxes her family pays, the GOP and its 2016 candidates are--as always--calling for a massive, Treasury draining, tax cut windfall for the wealthy.
Capitals Gains Taxes. At the 2012 Democratic National Convention, former President Bill Clinton explained what Republican control of the White House would mean for Americans' tax bills. "They'll hurt the middle class and the poor and put the future on hold to give tax cuts to upper-income people who've been getting it all along."
Four years later, the GOP's declared candidates are once again proving him right. Both Rand Paul and Marco Rubio would repeal the estates and gift taxes, while reducing the rate on capital gains and dividend income to zero.
Low capital gains tax rates have been one of the biggest drivers of income inequality. In 2011, the Washington Post explained why:
While it's true that many middle-class Americans own stocks or bonds, they tend to stash them in tax-sheltered retirement accounts, where the capital gains rate does not apply. By contrast, the richest Americans reap huge benefits. Over the past 20 years, more than 80 percent of the capital gains income realized in the United States has gone to 5 percent of the people; about half of all the capital gains have gone to the wealthiest 0.1 percent.
Secretary Clinton knows this all too well, and not just because her husband was one of those who delivered "a Christmas present" to the rich when he reduced the capital gains tax rate from 28 to 20 percent in 1998. As she explained yesterday in Iowa, "there's something wrong when hedge fund managers pay less in taxes than nurses or the truckers I saw on I-80."
Private Equity and Hedge Funds. As it turns out, Hillary Clinton's son-in-law is a hedge fund manager. But she's more than willing make him pay more to Uncle Sam by ending the "carried interest" tax exemption that allows Mitt Romney and his ilk to escape millions in assessments each year. As the New York Times reported in 2007:
Senator Clinton, speaking at a rally in New Hampshire, called for ending a "glaring inequity" that allows investment managers in certain partnerships to take large amounts of their compensation in the form of performance fees or "carried interest," which is taxed at the 15 percent capital gains rate rather than at income tax rates as high as 35 percent.
The carried interest tax break is one reason why private equity titans like Mitt Romney can reap huge profits from investments even when those companies fail. And private equity is one reason why Jeb Bush may run into some of the same roadblocks Mitt Romney did. Just ask Mitt Romney:
He has said, among other things, that Jeb Bush, the former Florida governor, would run into problems because of his business dealings, his work with the investment banks Lehman Brothers and Barclays, and his private equity investments.
"You saw what they did to me with Bain [Capital]," he has said, referring to the devastating attacks that his Republican rivals and President Barack Obama's team launched against him for his time in private equity, according to three sources familiar with the line. "What do you think they'll do to [Bush] over Barclays?"
Estate Tax. Another problem Jeb Bush faces with some voters is the concern over dynastic wealth fueling dynastic political power. But Bush won't face those that worry from Republican voters, including in the GOP's supposed Tea Party wing. After all, Congressional Republicans, the 2016 GOP presidential field and most of the rank and file support ending the estate tax.
This week, Capitol Hill Republicans voted once again to end what they call the "death tax." But despite the mythology of GOP leaders like Speaker John Boehner ("People who aren't wealthy, who may have built up value in land over generations and many family farms find themselves in situations where they've got to sell the farm in order the pay the taxes"), only two out of 1,000 estates will even have to pay the tax in 2015. As the Center on Budget and Policy Priorities (CBPP) documented, the supposed deficit-hawks of the GOP would add about $270 billion in new red ink over the next decade in order to keep the bank accounts of the richest heirs in the nation off-limits to Uncle Sam:
The federal estate tax is a tax on property (cash, real estate, stock, or other assets) transferred from deceased persons to their heirs. Only the wealthiest estates pay the tax because it is levied only on the portion of an estate's value that exceeds a specified exemption level -- $5.43 million per person (effectively $10.86 million per married couple) in 2015. The estate tax thus limits, to a modest degree, the large tax breaks that extremely wealthy households get on their wealth as it grows, which can otherwise go untaxed.
Like many wealthy Americans, Hillary and Bill Clinton utilize a range of strategies for limiting their estate tax exposure. But while 99.8 of families don't have to pay the estate tax at all, the Clintons are among the 0.02 percent who will.
Unless, that is, a Republican becomes President of the United States.
Tax Returns. "Hillary Clinton," Mitt Romney charged this week, "is just not trustworthy." That's an amazing smear coming from the Man of the Mystery Tax Returns. After all, in 2012 the Romneys released only two years of returns to the "small-minded" American public, making unverifiable Mitts claim that over the previous decade:
"Every year, I've paid at least 13 percent, and if you add, in addition, the amount that goes to charity, why the number gets well above 20 percent."
In stark contrast, by the time of her last presidential campaign, Hillary Clinton had made 30 years of her returns public. To be sure, Hillary and Bill Clinton are "obviously blessed." As the New York Times reported during the 2008 presidential primaries, between 2001 and 2008 the Clintons earned a whopping $109 million, almost all of it from speaking fees and book royalties. But because almost all of their earnings were taxed as regular income, the Clintons disproved Leona Helmsley's motto that "only the little people pay taxes."
During that time, the Clintons paid $33.8 million in federal taxes and claimed deductions for $10.2 million in charitable contributions...
In releasing seven years of tax returns, plus a summary of income for last year, the Clinton campaign noted that the couple had disclosed all their income tax records since Mr. Clinton was governor of Arkansas..."The Clintons have now made public 30 years of tax returns, a record matched by few people in public service," said Jay Carson, a campaign spokesman. "None of Hillary Clinton's presidential opponents have revealed anything close to this amount of personal financial information."
That was certainly the case in 2012. As for 2016, it remains to be seen how forthcoming the long list of Republican White House wannabes will be with their personal financial information. Regardless, GOP moneymen and strategists like American Crossroads CEO Steven Law plan to give Hillary Clinton a gilded-class makeover:
"She's admitted she hasn't driven a car for decades; she probably doesn't ever go into a coffee shop and talk to regular people unless it's for a staged photo-op. She really has lived the life of a 1-percenter these last several years, and it shows."
But with their policies, her Republican opponents will draw nothing but laughter if they aspire, as she does, to be "the champion of Everyday Americans." As Harry Truman aptly put it so many years ago, "If you want to live like a Republican, vote Democratic."
| April 14, 2015
When Carly Loved Hillary
Carly Fiorina, the disgraced HP CEO and failed California Senate candidate, says her odds of entering the 2016 Republican presidential contest are "higher than 90 percent." Of course, that's not because she believes she can win the nomination, but because the odds she wants to be the GOP's vice presidential nominee are 100 percent. And to secure that slot, Fiorina has made clear to all that she will run as the Anti-Hillary, a conservative attack dog who is willing able to do the dirty work the GOP's ultimately male nominee will not. That's why Fiorina was among the first to take to the airwaves after Hillary Clinton's campaign announcement to declare that the former Secretary of State and twice-elected Senator from "lacks accomplishment."
But back in the summer of 2008, Carly Fiorina had only praise for the woman who almost won the Democratic nomination for president. Of course, seven years ago, Fiorina's mission was to bring supposedly disgruntled Hillary voters over to John McCain. As with her loss to Barbara Boxer two years later, at that task, too, Fiorina failed miserably.
In the days after Barack Obama clinched the delegate count to assure his nomination, John McCain's economic adviser was dispatched to win over unhappy Hillary backers that June. As Newsweek ("Carly Fiorina: Praising Hillary, Pushing McCain") reported at the time:
For the past 15 months, Carly Fiorina has given her life to John McCain. A brand-name businesswoman owing to her tumultuous tenure as CEO of Hewlett-Packard, Fiorina serves as "victory chairwoman" of the Republican National Committee and is the McCain campaign's most outspoken and energetic female surrogate. But as she strolled around a dining room in the battleground state of Ohio last week, praising "a focused, determined, intelligent, empathetic, powerful leader," she wasn't talking about the GOP nominee. She was talking about Hillary Clinton--a woman, she told the 50 women gathered to see her in a Columbus suburb, who'd been wronged. "Women in positions of authority, particularly bold women who are trying to change things, are ... caricatured differently, commented upon differently and held to different standards," she said. "I watched all of this happen to Hillary Clinton."
But Fiorina's "female-focused speaking tour in Ohio and Pennsylvania" quickly went off the rails. For starters, she assured Americans that John McCain "has never signed on to efforts to overturn Roe vs. Wade." But McCain abandoned that stand from his 2000 campaign in favor of the GOP's draconian 2008 platform which called for reversing Roe and instead passing a "human life amendment" to the Constitution. Fiorina sparked another controversy when she raised the topic of health insurance coverage of contraception. As the Los Angeles Times reported:
"Let me give you a real, live example, which I've been hearing a lot about from women. There are many health insurance plans that will cover Viagra but won't cover birth control medication. Those women would like a choice," she said.
But as the abortion rights group NARAL Pro-Choice America pointed out, McCain twice voted against measures that would have required insurers to cover birth control.
The same article also explained the apparent necessity for the Fiorina smoke-screen: "a survey conducted for NARAL confirmed that and suggested that Barack Obama gained when women learned of McCain's positions."
As it turned out, Carly Fiorina didn't just try to dupe women voters about John McCain's positions on reproductive rights. In 2010, she tried the same trick on Republican primary voters in California. On the web site for her 2010 Senate campaign, we learned that "Carly is Pro-Life":
Carly believes that life begins at conception; she is pro-life. She earned an "A" rating from the National Right to Life Committee and has been backed by the Committee's California affiliate, the California Pro-Life Council. Carly has also earned the endorsement of the Susan B. Anthony List, a national pro-life political action committee.
But as Fiorina ramped up her own Senate push, Red State among other worried about the "unanswered questions" when it came to her anti-abortion bona fides. The site catalogued her sins, including Fiorina's use of the term "reproductive rights" at a September 2008 at a gathering in Minneapolis for business women attending the Republican National Convention. And as the San Jose Mercury News suggested in 2004, Carly Fiorina was for choice before she was against it:
A person familiar with Fiorina's intentions said she has long harbored a desire to get into politics, but doesn't want to reveal her aspirations because she doesn't want to be perceived as less than dedicated to her job at HP.
Republican insiders said Fiorina, whom they described as a moderate and pro-choice, is a rare breed, and she could have a bright future in politics.
Then again, maybe not. After all, the woman who was "spectacularly fired by the Hewlett-Packard board" in 2005 fared even worse at rounding up votes for John McCain. Even without her shameless attempts to falsely portray John McCain as a moderate on abortion, Fiorina's own biography isn't exactly White House material. AS Jeffrey A. Sonnenfeld of the Yale School of Management put in seven years ago:
"What a blind spot this is in the McCain campaign to have elevated her stature and centrality in this way. You couldn't pick a worse, non-imprisoned C.E.O. to be your standard-bearer."
Seven years, nothing has changed, except for Carly Fiorina's views about Hillary Clinton. Now, the Anti-Hillary asks, "Mrs. Clinton, name an accomplishment." But in that not-forgotten summer of 2008, Carly Fiorina answered her own question:
"I'm a woman, and as a woman, I'm really proud Hillary Clinton ran for president. I am enormously proud of what she did, and frankly, I have enormous sympathy for what she went through."
| April 13, 2015
GOP's 2016 Iran Contrarians Comically Embrace Reagan as Role Model
Every four years, Republican primary voters are treated to the predictable and pathetic spectacle of GOP presidential candidates claiming to be Ronald Reagan's heir. Left unmentioned is that Reagan's actual record as an abortion rights signing, immigration amnesty backing, tax increasing and Earned Income Tax Credit supporting Republican who tripled the national debt would make The Gipper about as welcome in today's GOP as a bout of chlamydia.
But in the wake of the Iran nuclear agreement announced last week, the 2016 GOP White House hopefuls are climbing on top of each other to proclaim themselves the latest vessel for Reagan's ghost. For example, Wisconsin Governor Scott Walker, who previously pledged to rip up on "Day One" the deal the U.S. negotiated with its closest allies, explained this week that "the best president in my lifetime when it comes to foreign affairs was a guy who was governor of California." That's why, Walker declared, "a lot of people agree...with my sentiment on Iran." Kentucky Senator Rand Paul, who in years past claimed that Iran did not represent a threat to the United States, summed up his approach to curbing Tehran's nuclear program this way:
"I believe in applying Reagan's approach to foreign policy to the Iran issue."
If so, Paul and his GOP rivals might want to rethink that talking point, and not just because Reagan at Reykjavik had offered to dismantle the entire American nuclear arsenal and denounced the Israeli raid on Iraq's nuclear reactor at Osirak. After all, while President Obama is not about to "give the Iranians nuclear weapons," President Ronald Reagan sent the mullahs in Tehran a cake, a Bible and U.S. weapons. And even before the Iran-Contra scandal that nearly brought down his presidency, Reagan was humiliated by Iran's Hezbollah proxies in Lebanon and its ally in Syria just prior to retreating in disgrace.
But before he earned the title as the U.S. president who actually negotiated with terrorists, Ronald Reagan's intervention in the Lebanese civil war was a disaster both for American policy in the Middle East and the U.S. armed services sent to implement it. And when Reagan wasn't trying to buy the release of American hostages from Iranian-backed terrorists beginning in 1986, he happily accepted the unlikely help of others in freeing U.S. captives from the Assad regime in Syria.
In October 1983, Hezbollah terrorists detonated truck bombs in the U.S. Marine barracks in Beirut, Lebanon, killing 241 Americans. As Foreign Policy noted about "Ronald Reagan's Benghazi":
Reagan never retaliated against Hezbollah or their Iranian and Syrian sponsors responsible for the bombings, a position widely endorsed by senior military officials.
Ultimately, Reagan cut and ran in February 1984. But on December 4, 1983, President Reagan ordered carrier-based jets to strike targets in Lebanon after reconnaissance aircraft protecting U.S. peacekeeping forces there were fired on. The raid was a disaster. Syrian anti-aircraft batteries downed two jets, killing one pilot and capturing another.
For Reagan and the U.S. military, it was a case of lessons unlearned. During its June 1982 invasion of Lebanon, Israel launched a devastating series of attacks on Syrian surface-to-air missile (SAM) positions in the Bekaa Valley. When the Syrian Air Force dispatched jets to protect the SAM sites, Israel downed 87 MIGs with no losses of its own. But a year and a half later, American forces weren't so fortunate. On December 4th, 1983, President Reagan ordered carrier-based bombers to attack anti-aircraft sites that had fired on reconnaissance planes protecting the U.S. peacekeeping force in Beirut. The result, as the New York Times recalled in 1989, was a disaster:
The only time the United States sent its bombers over Lebanon, as President Bush was reportedly prepared to do again this week, the mission ended in a fiasco, with two planes shot down and one damaged, one pilot killed and one crewman captured, and little to show for the effort.
The memory of that December 1983 raid, which came only six weeks after 241 American servicemen were killed in the bombing of their barracks in Beirut, remains vivid among senior officers in the Pentagon as they await the outcome of diplomatic efforts to end the current hostage crisis.
In The Reagan Diaries, the Gipper explained how he came to order the ill-fated raid:
That evening received a call from McFarlane that the Syrians had launched an anti-aircraft & ground to air missile against our unarmed reconnaissance planes during one of their routine sweeps of Beirut. Permission was needed from me for a return strike against the guilty batteries. I'd already received a call on this from Cap in Paris. I gave the order. Sunday morning got a call--we had taken out a communications center, some batteries & an ammo dump. Two of our planes (24) had been shot down. One pilot parachuted and had been recovered. The other 2 is the 2nd plane parachuted in hostile zone--we've heard one was machine-gunned but we've also hard both are prisoners. We're trying to get a confirmation & will open negotiations for their return.
That same night, Reagan wrote that he attended a Hanukah ceremony and went to a reception honoring Frank Sinatra, Jimmy Stewart, Elia Kazan, Katherine Dunham and Virgil Thompson at the JFK Center for the Performing Arts. "A posse of our Hollywood friends will be at the W.H. for the reception," President Reagan noted, adding later, "It turned out to be a wonderful evening & a great show."
Just not for the armed forces of the United States.
For his part, President Reagan complained bitterly the day after his catastrophe in the Bekaa Valley:
"Our press & TV are hostile to the point of being pro-Syrian."
As it turned out, negotiations did lead to the return of the captured American airman. But they weren't directed by President Reagan or anyone in his administration. Instead, the surviving U.S. pilot returned home only after the unsanctioned intervention of the Reverend Jesse Jackson. On January 4th, 1984, Reagan had to admit, "You can't quarrel with success." As the AP reported that day:
The United States, said Reagan, was ready to approach the problems of the Middle East "with a renewed spirit."
Reagan also applauded Democratic rival Jesse Jackson for the personal unofficial mission which gained the release of Navy Lt. Robert O. Goodman, Jr...To Jackson, the president said "it is a great day here in Washington. All Americans thank you. There have been a lot of prayers here in Washington. I have been praying for you. I couldn't be happier."
To be sure, Reagan was happier than he would be two years later, when his efforts to secure the release of American hostages held by Hezbollah terrorists in Lebanon blew up in his face in the Iran-Contra scandal.
Iran-Contra, as you'll recall, almost laid waste to the Reagan presidency. Desperate to free U.S. hostages held by Iranian proxies in Lebanon, President Reagan provided weapons Tehran badly needed in its long war with Saddam Hussein (who, of course, was backed by the United States). In a clumsy and illegal attempt to skirt U.S. law, the proceeds of those sales were then funneled to the Contras fighting the Sandinistas in Nicaragua. As the New York Times recalled, Reagan's fiasco started with an emissary bearing gifts from the Gipper himself:
A retired Central Intelligence Agency official has confirmed to the Senate Intelligence Committee that on the secret mission to Teheran last May, Robert C. McFarlane and his party carried a Bible with a handwritten verse from President Reagan for Iranian leaders.
According to a person who has read the committee's draft report, the retired C.I.A. official, George W. Cave, an Iran expert who was part of the mission, said the group had 10 falsified passports, believed to be Irish, and a key-shaped cake to symbolize the anticipated ''opening'' to Iran.
As his diaries published in 2005 show, President Ronald Reagan was under no illusions about either the illegality of the scheme or that it constituted anything other than a swap of arms for hostages. On Thursday, December 5, 1985, Reagan wrote in his diary:
N.S.C. briefing--probably Bud's last. Subject was our undercover effort to free our 5 hostages held by terrorists in Lebanon. It is a complex undertaking with only a few of us in on it. I won't even write in the diary what we're up to.
Nevertheless, just two days later the Gipper wrote about that very topic. On Saturday, December 7, Reagan noted in his diary:
Day opened with "Rex" (our new dog) on our bed. I then had a meeting with Don R., Cap W. and Bud M., John P., Geo. Schultz and Mahan of C.I.A. This had to do with the complex plan which could return our 5 hostages & help some officials in Iran who want to turn that country from its present course & on to a better relationship with us. It calls for Israel selling some weapons to Iran. As they are delivered in installments by air our hostages will be released. The weapons will go to the moderate leaders in the army who are essential if there is to be a change to a more stable govt. We then sell Israel replacements for the delivered weapons. None of this is a gift--the Iranians pay cash for the weapons--so does Israel.
George S. Cap and Don are opposed--Cong. has imposed a law that we can't sell Iran weapons or sell any other country weapons for resale to Iran. Geo. also thinks this violates our policy of not paying off terrorists. I claim the weapons are for those who want to change the govt of Iran & no ransom is being pd. for the hostages. No direct sale would be made by us to Iran but we would be replacing the weapons sold by Israel.
In case there was any doubt that Ronald Reagan blessed the delivery of hundreds of advanced anti-tank weapons to Tehran, the President himself removed it with his January 17, 1986 diary entry, "I agreed to sell TOWs to Iran."
The rest, as they say, is history. Or, more accurately, rewritten history. As President Reagan told the American people in a nationally televised address on March 4, 1987:
"A few months ago I told the American people I did not trade arms for hostages. My heart and my best intentions still tell me that's true, but the facts and the evidence tell me it is not. As the Tower board reported, what began as a strategic opening to Iran deteriorated, in its implementation, into trading arms for hostages."
Of course, the pathetic saga didn't end there. Then Lt. Colonel and now Fox News commentator Oliver North saw his Iran-Contra conviction overturned by an appellate court led by faithful Republican partisan and later Iraq WMD commissioner Laurence Silberman. And in December 1992, outgoing President George H.W. Bush offered Christmas pardons to Defense Secretary Caspar Weinberger and five other Iran-Contra scandal figures. Among them were John Poindexter and Elliott Abrams, men who eight years later reprised their roles in the administration of George W. Bush. (As it turns out, Abrams--one of the people who brought you the Iraq War--also served as an adviser for Mitt Romney during the 2012 presidential campaign. In that capacity, he argued that Congress should give President Obama an authorization to use force against Iran for a preventive war to destroy Tehran's nuclear program. He is now an adviser to Florida Senator Marco Rubio.)
Ultimately, there is a final irony to Republicans claiming that Ronald Reagan should be the role model for the American approach towards Iran. Echoing Dick Cheney's criticisms of President Obama's supposed weakness on the Iranian nuclear issue, many of the GOP White House wannabes signed the infamous "47 Senators" letter to the leaders in Tehran. But it was then-Congressman Dick Cheney who defended the Reagan administration actions during the Iran-Contra charges as "constitutionally protected exercises of inherent Presidential powers" not to be interfered with by Congress.
In his November 18, 1987 press conference unveiling the minority report on the Iran-Contra scandal, Cheney rejected any notion of wrong-doing by the Reagan administration. "The bottom line, however, is that the mistakes...were just that," Rep. Cheney announced to the nation, "mistakes in judgment, and nothing more."
There was no constitutional crisis, no systematic disrespect for ''the rule of law,'' no grand conspiracy, and no Administration-wide dishonesty or coverup. In fact, the evidence will not support any of the more hysterical conclusions the committees' report tries to reach.
In 1989, the future Defense Secretary and Vice President made it clear that his objection to Capitol Hill butting into the President's constitutional powers to conduct diplomacy applied to every issue and every occupant of the Oval Office. As he put it in an address to the American Enterprise Institute:
[C]ongressional overreaching has systematic policy effects. It is important to be clear at the outset that my argument is about systematic effects, not individual policy disagreements. For example, Congress' efforts to dictate diplomatic bargaining tactics, as well as the efforts by individual members to conduct back channel negotiations on their own, make it extremely difficult for the country to sustain a consistent bargaining posture for an extended time period, whomever the President and whatever the policy. [Emphasis original.]
Of course, now a Democrat sits in the White House, which means that for Republicans, anything goes. That includes sabotaging the foreign policy of the President of the United States, including an international agreement being negotiated by America, the UK, France, Germany, Russia, China and Iran. And with no realistic alternative to either the P5+1 deal or a costly war to completely eliminate the Iranian nuclear program, opponents of the deal casually speak of air strikes that will magically end Tehran's infrastructure within days. This week, Arkansas Senator GOP Tom Cotton, the man whose letter to the Islamic Republic was co-signed by his colleagues Paul, Rubio and Cruz, suggested that "several days [of] air and naval bombing against Iraq's weapons of mass destruction facilities" should do the trick.
Or as Ronald Reagan might have put it, "The bombing begins in five minutes." After all, as Ted Cruz said of him last year:
"Now there is a man who knew how to deal with the Iranians."
| April 12, 2015
Can't Get Through to the IRS? Call Your GOP Congressman
"Unless we are able to correct this," National Taxpayer Advocate Nina Olson warned in November, "very bad things will happen to taxpayers." By "this," Olson meant five straight years of budget cuts and staffing reductions at the Internal Revenue Service (IRS). Now, thanks to Congressional Republicans once again targeting Uncle Sam's tax collector for political payback, the chickens have come home to roost. While only 40 percent of callers can even get through to the IRS help-line, refunds are being delayed as the agency faces furloughs. Meanwhile, IRS officials say they don't have the manpower to chase down tax cheats who owe the U.S. Treasury less than a million dollars even as the percentage of audits plunged to a 10-year low. It's no wonder BusinessWeek declared, "The IRS Sucks."
But if Americans are "seeing red" over what Olson called the "worst filing season" in years, that's because they should. The shocking decline in customer service levels is purely the result of Republican sabotage of the IRS. With its draconian budget cuts and workforce downsizing at the IRS, the GOP isn't just making taxpayers miserable. Republicans are costing Uncle Sam tens of billions of dollars of lost revenue annually.
A recent analysis by the Center on Budget and Policy Priorities (CBPP) summed up the impact for the IRS of having lost 18 percent of its funding and 13,000 agents since 2010 even as its responsibilities and the volume of returns jumped by seven percent. With the "tax gap" between what Americans owe and what they actually pay now estimated to top $500 billion a year, "IRS funding cuts continue to compromise taxpayer service and weaken enforcement." Nevertheless, Republicans like Rep. Ander Crenshaw (R-FL) pretend that result is a bug, and not a feature, of years of GOP policy:
"[M]ore money is not the only solution...The IRS has the flexibility to ensure that its limited resources are used as cost-effectively as possible...
"We deliberately lowered the IRS funding to a level to make them think twice about what they were doing and why. They don't have a dime to spare on anything frivolous or foolhardy or even middling. The IRS should and must focus on the most important, the most egregious and the most in need."
Unfortunately, that's not how the world--or basic math--works.
In the recent "CRomnibus" spending bill, Congressional Republicans once again took an ax to their least favorite government agency:
Spending negotiators this week froze most agency budgets but reduced the IRS funds to $10.9 billion, a 3 percent cut over last year and $1.5 billion below the president's request. Appropriators bragged in a release that the level is even lower than the IRS's 2008 budget.
Those new cuts come atop more than a $1 billion reduction to the IRS budget since 2010, which has forced the tax-collecting agency to shed 13,000 employees while it serves an additional 7 million taxpayers, according to IRS Commissioner John Koskinen.
The results of this right-wing temper tantrum are as predictable as they are counterproductive. IRS customer service will continue its steady erosion. Even before the cuts, only 53 percent of taxpayers calling the agency for help were projected to even get through, while wait times were forecast to grow to 34 minutes. IRS Commissioner John Koskinen warned that the tax collector may have to resort to furloughs and shutdowns to balance its own books, painful steps which could delay taxpayers' refund checks. Meanwhile, the government's ability to prevent, detect and punish tax cheats, frauds and evaders will be further curtailed, with the result that the estimated $500 billion "tax gap" between what Americans owe Uncle Sam each year and what they actually pay will continue to grow.
As it turns out, the House GOP caucus was only delivering on RNC Chairman Reince Priebus' April promise that "we're done playing footsie here with the IRS" over its supposed scandals. But the real scandal is that Republicans and their conservative amen corner have for decades been doing something much worse to the IRS.
After their successful 1990s crusade to defang the Internal Revenue Service, the GOP is once again slashing its budget, demonizing its employees and even questioning the legitimacy of its mission. With its funding cut by Congress for five years in a row, the agency now has 10 percent fewer agents and officers than five years ago and fewer agents auditing returns than at any time since at least the 1980s. Even as congressional Republicans have blocked Obama administration efforts to end "inversions" that enable American corporations to move overseas to avoid paying taxes, the Government Accountability Office reported an epidemic of tax dodging by small businesses. The result is that the tax gap has mushroomed to an estimated $500 billion from $195 billion in 1998. To put that in context, that's roughly equal to the entire projected federal budget deficit for the past year.
By punishing the IRS for scandals that did not materialize and for simply doing its job in managing Obamacare tax credits and penalties, the GOP has opted for a "penny-wise, pound-foolish" policy of the worst kind. The IRS has repeatedly explained that each additional dollar added to its budget produces between seven and 10 times more revenue for the United States Treasury. As Ezra Klein pointed out when House Republicans first slashed the IRS budget in 2011:
Converting dollar bills into $10 bills is an excellent way to pay off your credit card. Except, it seems, if you're a House Republican.
It's with good reason Jonathan Cohn labeled the GOP the "pro-deficits, pro-tax evasion" party. In the summer of 2013, then House Majority Leader Eric Cantor (R-VA) announced his party's intent to slash IRS by 25 percent, a move even Charles Krauthammer called "silly and small." For his part, IRS chief John Koskinen recently warned that there is little he can do about a GOP-controlled Congress still seeking retribution for "the problems of the past...overspending on conferences, making some ill-advised videos and, of course, inappropriate scrutiny of applications from groups seeking social welfare status and others." But that wasn't Koskinen's only warning to Congress:
"I have not figured out either philosophically or psychologically why nobody seems to care whether we collect the revenue or not."
The other result, Koskinen lamented, is "really crummy customer service" when "more than six out of every 10 people who call can't reach a customer service representative."
So if you're one of those six in 10, don't blame the IRS. Call your Republican representative instead.