Senate Republicans scuttled a bipartisan $1.2 trillion dollar spending omnibus bill last week. Now, Majority Leader Harry Reid (D-NV) is scrambling to pass a temporary funding bill to keep the federal government’s lights on.
The GOP abruptly pulled the plug on the omnibus, a massive piece of legislation that Republicans and Democrats had collaborated on for months. Why? Because the Republicans want to start over in the next session of Congress when they will control the House and pick up seats in the Senate. They intend to rewrite the spending bill with much less Democratic input. In other words, bipartisanship proves once again to be a racket.
War on the Welfare State
At Truthout, economist Dean Baker offers some predictions on what Republicans have in mind for the 112th Congress. The Bush tax cut extensions that passed with great fanfare are supposed to be 2-year extensions. However, Baker asks why we should expect that the GOP will allow the tax cuts to expire?
The tax cut deal also included a supposedly temporary payroll tax holiday. Now Republican opposition to raising the U.S. debt ceiling is stiffening. If the ultra-conservatives in the House get their way, the United States will be forced to default on its debts, ushering in a financial catastrophe of epic proportions. Baker worries that these conservative forces are orchestrating a fiscal crisis that will force massive cuts in Medicare and Social Security.
Sen. Bernie Sanders: Take On Corporate Bullies
In this month’s Progressive, Sen. Bernie Sanders (I-VT), the Senate’s only socialist, urges Americans to organize at the grassroots level to fight the oil companies that are demanding lucrative tax breaks as ordinary people sacrifice:
We hear a lot of talk from Republicans and tea partiers about cutting food stamps and unemployment benefits to workers who lost their jobs through no fault of their own. But when it comes to corporate welfare for giant, profitable oil companies, Senate Republicans are unanimously in favor of keeping big oil’s tax breaks alive.
Sanders argues that oil companies have hijacked the discourse through industry-funded pseudoscience and unchecked campaign spending in the wake of the Citizens United Supreme Court decision. The only way for citizens to counter this juggernaut and retake control of our energy policy and our economy is to organize locally, as a growing number of concerned Vermonters are already doing.
Debunking Deficit Myths
At In These Times, David Moberg argues that the conventional wisdom on the deficit is all wrong. Moberg points out unemployment, not the deficit is the most urgent economic crisis facing the nation. He maintains that, over the next few years, the focus should be on stimulating the economy and creating jobs, not austerity for austerity’s sake. Moberg notes that, contrary to popular belief, Social Security does not and cannot contribute significantly to the deficit and the program is fully funded to provide benefits at current levels through 2037.
Joshua Holland of AlterNet gets into the holiday myth-busting spirit with a piece on the 9 biggest conservative lies about the economy, starting with the bizarre idea that cutting taxes actually increases government revenue. The Bush tax cuts were touted as self-financing, but the architects of the cuts acknowledge that they did no such thing:
Time Magazine’s Justin Fox noted in 2007, “Every economics Ph.D. who has worked in a prominent role in the Bush administration acknowledges that the tax cuts enacted during the past six years have not paid for themselves—and were never intended to.” Harvard professor Greg Mankiw, a former chairman of Bush’s Council of Economic Advisers, dedicated a whole section of his economics textbook to debunking the claim.
Holland also takes aim at the claim that taxing the rich hurts the economy because rich people create jobs. He notes that the ultimate driver of job-creation is demand for goods and services. Taxes or no taxes, if capitalists think they can make a buck, they will invest. Investment is slack right now, but not because potential job-creators are over-taxed, but because they correctly surmise that the average American has no money.
I would add that, in the latest debate over the now-extended personal income tax cuts, the GOP has consistently muddied the waters between personal income tax and corporate taxes. Think about it: The CEO of a major company is not going to decide whether to open a new factory based on whether her personal income taxes went up or down.
States Sue Bank of America For Foreclosure
Arizona and Nevada slapped Bank of America (BoA) with a “blistering lawsuit” over shady foreclosure practices last Friday, as Andy Kroll reports for Mother Jones:
The states say the lender made “false assurances” about modifying homeowners’ mortgages while foreclosing on them at the same time and gave “inaccurate and deceptive reasons” for rejecting loan modification requests. “Nevadans who were trying desperately to save their homes were unable to get truthful information in order to make critical life decisions,” Nevada attorney general Catherine Masto said in a statement.
Bank of America maintains that it is doing its best to help homeowners in foreclosure. However, records show that BoA only successfully renegotiates 30% of loans under the federal government’s Home Affordable Modification Program (HAMP). BoA claims to care about borrowers but its stats look very shabby compared to HAMP stars like Wachovia Mortgage and HomeEq Servicing, which successfully renegotiate 89% of loans.
A Silver Lining To The Mortgage Mess?
Could the massive foreclosure paperwork crisis force the federal government to get serious about helping families renegotiate their mortgages? That’s what Robert Kuttner of the American Prospect wants to know.
By now, the story of mess is well-known. During the height of the subprime mortgage bubble, mortgages were being mass-produced and shopped around so fast that critical pieces of documentation were lost or omitted on millions of loans. Many foreclosure proceedings are paralyzed because there is no paper trail to link a delinquent borrower to a lender. The aforementioned HAMP program is a start, but Kuttner hopes that the government will become even more engaged in helping borrowers renegotiate their mortgages on sustainable terms.
If the banks won’t cooperate, Kuttner suggests the feds might cut through the chaos by seizing houses with defective paper trails through eminent domain and brokering a fair settlement.
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