The Blue State

The minimum wage and Paris Hilton do not go together

The Democrats want to raise the minimum wage.  The Republicans want to repeal the estate tax.  Bill Frist's latest tactic to get the estate tax passed shows just how connected he and his party is to the wealthiest lobbyists on Capitol Hill.  The Senate Majority Leader is telling Democrats that the only way a minimum wage hike will pass the Senate is if a repeal of the estate tax is part of the bill (morphing two unrelated bills into one).  Keep in mind that the estate tax affects only the richest 1% of estates.  And repealing it would add $1 trillion to the National Debt between 2012 and 2021.

In order to satisfy their big donors, the Republicans Senate leadership has been fighting hard for the last few months to do away with the estate tax, or what many refer to as the Paris Hilton tax.  Democratic Senate Minority Leader Harry Reid summed it up best:

"The only road to legislative heaven in this Republican-dominated Congress is to repeal the estate tax," he said.

So what do the Democrats do?  Should they continue to allow themselves to get bullied around by the GOP Senate majority?  Or do they vote it down?  If the Democrats vote against this bill, then the Republicans can come back and say that the Democrats were against the minimum wage being increased.  See the tactic!

I think it's a toss-up either way.  It's hard to support a measure that would add to the National Debt.  On the same token, a few incumbent Democratic Senators up for reelection might be put on the hot seat by their constituents if they oppose a measure that would raise the minimum wage for the first time since 1997.  Regardless, this is a sick tactic on the part of Bill Frist.  You'd think that because Frist is retiring from the Senate this year, he would want to leave with some integrity.
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Other blogs writing about Bill Frist: Americablog, The Carpetbagger Report, Hotline, Daily Kos, Wonkette, Political Translator, At Home, Not So Humble, Angry Bear, Volunteer Voters, Left Word, Political News.

Don't tell my generation that money is not a factor

As a political writer on this web site, you will often notice a "generation y" bias, especially when it comes to issues involving the deficit.  Shortly after September 11th, 2001, I had the naive notion (as did other young Americans entering college) that our goal should be to fight all terrorism regardless of the monetary cost.  Well, more than about $1 trillion worth of debt later, most among my generation including myself are worried about how far in the red we are.  Banks in the Middle East and Asia that are buying shares of our debt now have us by the boot-straps.  It's easy for Republicans and some Democrats to just throw money at each military bill for Iraq -- after all, they won't even be alive to pay for it.

Also, just about every economist says the same thing: as GDP-adjusted U.S. debt increases, the greater likelihood that the dollar decreases in value.  If banks who invest in the U.S. dollar forecast a long-term decline in its value, then they will start charging more interest.  Usually when their rates go up, the U.S. has to raise interest rates as well in order to keep up -- that hurts consumers.

So when it comes to our foreign policy, yes, our monetary ability to wage the war against terrorism is a finite one.  Time Magazine's Lisa Beyer alluded to that very point in her article published for this week:

However grand it may be to fight all global terrorists, though, thesimple fact is that we can't: we don't have the troops, the money orthe political will. That means it may make sense to limit our hit listto the groups that actually threaten us.

I completely agree with that statement.  It does not mean we should shy away from condemning anti-Semitic groups like Hamas, nor does it mean we can't cut off private U.S. funds that find their way to violent groups.  It does mean though that our energies ought to be fixated on making the most of our resources to protect what are true threats, and provide taxpayers with the transparency needed remain in the loop.

When you hear politicians discard the birth tax (National Debt) as just a number, the chances are that they won't even be around in 30 years when the rest of us have to worry about it.
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Other blogs writing about Bush's Foreign Policy: Media Matters, Donkey Path, Nemesis News, American Entropy, A Daily Briefing on Iran, Bravene World, Scrapple Face, Liberal Pro.

Violence encourages corruption

Yes, the violence in Iraq is unbearable.  A car bomb in Kirkuk killed four on Saturday.  Three Marines were killed a few days back in Iraq's unstable Anbar Province.  This comes as U.S. troop levels are expected to be increased by 4,000.

But as bad as the violence is, there is also something that needs to be said about all the corruption.  As revealed in Sunday's New York Times, a government audit of a State Department agency showed that the agency deliberately hid cost overruns on projects in Iraq that were being funded by U.S. taxpayers:

The agency hid construction overruns by listing them as overhead oradministrative costs, according to the audit, written by the SpecialInspector General for Iraq Reconstruction, an independent office thatreports to Congress, the Pentagon and the State Department.

Called the United States Agency for International Development, orA.I.D., the agency administers foreign aid projects around the world.It has been working in Iraq on reconstruction since shortly after the2003 invasion.

The report by the inspector general’s office doesnot give a full accounting of all projects financed by the agency’s$1.4 billion budget, but cites several examples.

The findingsappeared in an audit of a children’s hospital in Basra, but theyreferred to the wider reconstruction activities of the developmentagency in Iraq. American and Iraqi officials reported this week thatthe State Department planned to drop Bechtel, its contractor on thatproject, as signs of budget and scheduling problems began to surface.

This kind of recklessness is analogous to the report that surfaced in January of 2005 about how $9 billion worth of taxpayer dollars in Iraq for some reason vanished.

This is our money!  Just imagine if the $9 billion we spend each month in Iraq was used in our own country -- rebuilding bridges and roads, fully funding education, keeping Social Security solvent, making communities safer, or even paying down part of our debt.  But no, they would rather see our money in the hands of people who can't manage resources properly.  Since the Republicans have ignored this problem, if the Democrats take back Congress in November we should all expect them to issue subpoenas and hold hearings in order to get to the bottom of how our money was mismanaged.  Each dime we spend in Iraq means more debt -- which is nothing more than a birth tax on future generations.

CBO Report: Iraq adding to the birth tax

A new reportreleased by the nonpartisan Congressional Budget Office (CBO), the researcharm of the Legislative Branch, indicated this morning just how much we are payingfor the war in Iraq, and how much we should expect to pay for the next decade.

The Los Angeles Times breaks it down for us:

The war in Iraq has cost $291 billion so far and would total almosthalf a trillion dollars even if all U.S. troops were withdrawn by theend of 2009, according to a Congressional Budget Office analysisreleased Thursday.

And over the next ten years, that's between 2007 and 2016, the war will cost taxpayers between $202 billion and $406 billion more.

I used to have the opinion (as in right after 9/11) that money should never factor into how we conduct our foreign policy.  In other words, we need to do whatever we can, regardless of what it takes, to defend our democracy from terrorism.  But other than the fact that you could say the Iraq war is actually increasing terrorism throughout the world, I learned over time that foreign policy, like anything else, has its limits. 

When you mortgage the treasury, regardless of the reason, it impacts future generations.  The Republicans like to talk about protecting the unborn.  They also like to talk about the so called "death tax."  These unborn children will literally pay the price for our reckless spending habits.  It is like a birth tax on future generations who will shake their heads during 6th grade history class, wondering why their early 21st century ancestors never got it together.

It's time to start redeploying troops to the periphery immediately, as opposed to waiting until 2009, and significantly reduce the amount we are paying for this war per week.

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Other blogs writing about this issue: YaPundit, Econ Browser, The Road to Surfdom, Evergreen Politics, The Blue Voice, Anti-War Blog Coalition, Arizona Armadillo.

Solving our debt problem: Some farm subsidies are not for farmers

With the birth tax (otherwise known as the National Debt, for those of you scoring at home) at a disturbing $8 trillion, my generation is looking for ways to offer advice so that we can solve this long-term problem that threatens future generations.  As a percentage of GDP, the National Debt is the highest it has been since the Reagan-Bush years.  And before the Reagan-Bush years, it had not been that high since Eisenhower.  Cuts are needed soon so we will not have to pay as much interest on the debt.

But where these cuts ought to come from underscores the honest difference that progressives have with conservatives.  As far as fiscal policy is concerned, progressives believe that tax cuts for small businesses and the middle class, coupled with cutbacks on both Pentagon spending and subsidies for oil companies, leads to lower spending and is the best way to assure that consumers will spend more money to keep the economy moving.  Conservatives, on the other hand, believe that supply-side economics -- tax cuts for the rich and oil companies -- results in job creation.  But growing the economy, even though I believe progressives have the edge on that debate, is very different than solving the debt problem.

If I were president, I would urge Congress to cut back on missile defense spending, bunker buster nuclear weapons, oil subsidies, and tax cuts for the richest 1%.  I would also reduce the number of U.S. forces in Iraq by redeploying them to the periphery, therefore cutting in half the $8 billion we spend per week in Iraq.  In all, this plan would reduce the deficit by nearly $300 billion each year.  Now you know why I want a Democrat in the White House!

What I would hesitate to do is eliminate farm subsidies.  However, when you look at the facts, some of those farm subsidies are going to individuals without farms, as the Washington Post explained today:

Even though Donald R. Matthews put his sprawling new residence inthe heart of rice country, he is no farmer. He is a 67-year-old asphaltcontractor who wanted to build a dream house for his wife of 40 years.

Yetunder a federal agriculture program approved by Congress, his 18-acresuburban lot receives about $1,300 in annual "direct payments," becauseyears ago the land was used to grow rice.

Matthews is not alone. Nationwide, the federal government has paid atleast $1.3 billion in subsidies for rice and other crops since 2000 toindividuals who do no farming at all, according to an analysis ofgovernment records by The Washington Post.

Like I said, I am definitely pro-farming.  But farm subsidies for non-farmers is just one example of some of the loopholes in our tax system that add to the National Debt each year.

If you are a conservative reading this blog, you are probably thinking to yourself, "A progressive talking about the deficit?  Now that's a new one."

But with the budget nightmare that we have faced ever since President Bush came into office, my generation is very worried about our government's poor spending habits.  We need a pay-as-you-go system.  And whenever we generate a surplus, we need to reinvest it.  Fixing these farm subsidy loopholes is just one part of solving the budget puzzle that we find ourselves in today.

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Other blogs writing about this issue: Hell's Leading Daily Newspaper, The Amateur Economist, Economist's View, Amygdala, Minstrel Boy, Kansas Rino, Crapbag, To the People, Worldwide Sawdust, Pax Alles,  What would you Say if you Weren't Afraid?, Machination.org, From on High, Prometheus 6.0, The Passionate Center.

GOP 0 for 2 this week

While the mainstream media was salivating over the great news that Abu Musab al Zarqawi was killed in a spectacular use of force by the U.S. military, the Senate was busy debating whether or not to repeal the estate tax -- a tax that affects only five out of every 1,000 people nationwide (that's only 0.5% of the country, for those of you scoring at home!).  The repeal would have added more than $1 trillion to the National Debt, or in other words add to the birth tax of future generations.

The measure required 60 votes to end the filibuster.  The Republicans could only muster as much as 57 votes.  So the measure was rejected today.

A repeal of the estate tax and a constitutional amendment banning gay marriage are the two top priorities for the Republican-controlled Senate before the summer recess.  This week, both measures failed: putting their current batting average at .000 (0 for 2).  Good luck trying to find a contract with voters this November!

Bill Frist presses hard to increase birth tax

After helping President Bush push to the Senate an amendment that would ban gay marriage, Republican Majority Bill Frist plans to move onto what his party believes is the second most important issue facing the nation: upper class tax relief.  The estate tax, which only affects 2% of estates, adds more than $2 trillion in revenue to the U.S. Treasury.  The Republicans call this "the death tax," and want to repeal it immediately.  Such a repeal would add to the national debt, therefore increasing what young people call "the birth tax."  But Frist sees it differently:

Opponents of the estate tax, which is levied by the federal governmenton wealth of more than $2 million, say Thursday's Senate vote is allabout repealing an onerous levy they have dubbed the "death tax."

"It is said that the only certain things in life are death and taxes,but when Ben Franklin coined that phrase, he surely didn't envisionbeing taxed after death," Senate Majority Leader Bill Frist, R-Tenn.,said in a statement. "Yet this is exactly what the death tax does."

If Congress makes full repeal of the estate tax permanent, about $1trillion would be added to the nation's current national debt of $8.36trillion over 10 years.

I know that it is easy for the GOP to tax those that have not been born yet, especially since they will not anymore votes for his party this November.  But thinking about the future is a rational thing to do every now and then.

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