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Cumulative student loan debt in the United States has reached an astonishing $1.2 trillion, and it’s rising quickly. It shot up 20 percent just from the end of 2011 to May 2013, faster than even the growth of revolving credit products like credit cards. On average, the student loan debt held by 25-year-olds has gone up 91 percent in the past decade. The problem is exacerbated by tough economic times—nearly one-third of borrowers who have begun repayment are seriously delinquent.
And, as is true of so many issues, Congress has struggled to do anything substantial to solve the problem. Last summer, after it failed to come up with new student loan lending laws, Congress at the last minute prevented student loan interest rates from doubling, but only for new borrowers—no doubt a good move, but tiny in the face of such a large problem. Democrats also attached a measure to the Affordable Care Act that limits repayments to 10 percent of income and forgives debt after twenty years, which is beneficial but similarly a decidedly small-ball approach to the crisis.
Most higher education analysts agree drastic measures are needed—and to that end, a new coalition launched this week that aims to push forward radical ideas on how to both reduce the current student loan debt burden, but also make college more affordable going forward.
The “Higher Ed Not Debt” campaign is a coalition made up of a wide variety of groups: big unions (ranging from education unions like AFT and NEA, to bigger labor groups like the AFL-CIO, SEIU and AFSCME) to standard progressive organizing outfits (Progress Now, Working America and Jobs With Justice, to name a few) to big think tanks like the Center for American Progress and Demos.
It has four essential goals:
Provide support to borrowers now paying off the $1.2 trillion in student loan debt.
Change state funding and financial aid structures to address both the declining quality and increasing cost of higher education.
Address the role of Wall Street in the increasing financialization of student loan products, as well as the privatization of funding outlets.
Civic engagement and education on what it means to take on student debt, and how to push legislators to find better answers.
Higher Ed Not Debt’s roadmap is pretty broad—maybe dangerously so, unless they really have the funding, manpower, and wherewithal to pull it off. The coalition will produce extensive reporting and research on the higher education crisis and particularly Wall Street’s role, and also—presumably with the help of the aforementioned think tanks—produce concrete policy proposals. It will naturally have a communications strategy to push out the message, alongside a grassroots organizing push in at least five states to recruit citizens to demand action. Finally, the group plans to get involved in elections to push candidates towards its preferred solutions.
The campaign launched Thursday at the Center for American Progress with some big-name speakers: Senator Elizabeth Warren and AFT President Randi Weingarten.
Warren took a broad approach to the crisis, noting one fundamental problem: only the wealthy are able to avoid the student debt crisis. “If you’re not rich in America, college costs more. It costs more because you have to borrow the money, and pay and pay and pay,” she said. “As a matter of federal policy, we’ve penalized those young people by saying ‘You’re going to pay more for your education than people who have the blessing of being born to a family that can pay for it up front.’”
She noted that the federal government profits from this arrangement—based on the loans made between 2007 and 2012, the Treasury will bank $66 billion in profits. Warren pushed several proposals that for now are stuck in the Senate, but that the campaign aims to prop up.
One such idea is to enact the Buffet Rule, which closes tax loopholes for the wealthy, and use the money to reduce student interest loan rates. Warren is working with Democratic Senators Dick Durbin, Jack Reed, and Kirstin Gillibrand on a bill that would take the savings from the Buffet Rule and allow students currently holding loan debt to refinance down to 3.86 percent—and if enough savings were brought in from the Buffet Rule where all students could do that and there was still money left over, then allow for refinancing at an even lower rate.
“I think about it this way because I think about the choice America makes. Think about this. Right now in order to finance United States government, we take in billions of dollars in profits off student loans, but permit billionaires to have enough loopholes that they pay at tax rates that can be lower than those of their secretaries,” she said. “It’s about values. Where, as a country, do we believe we should make our investments? Follow the money on this. Invest in billionaires or invest in students. Well I want to put my money on students.”
Read Next: Jarrett Murphy picks apart de Blasio’s lukewarm war on charter schools.
Sometime during the night of February 11 or the early morning of February 12, an unknown intruder or intruders broke into a downtown DC business office, tried to open a file cabinet, but took nothing—and left. This normally would be unremarkable, except the office belonged to an organization that gave government whistleblowers both protection and a public platform. And it wasn’t the first time such an odd crime occurred at an organization like this.
The break-in, which was first reported by Newsweek, occurred at the Project on Government Oversight, which for thirty years has been exposing government corruption, often via whistleblowers on the inside who come to the group with information.
Its highest-profile case in recent months was when POGO reported that then–Secretary of Defense Leon Panetta and perhaps the department’s chief of intelligence, Michael Vickers, leaked sensitive information about the Osama bin Laden raid to the producers of Zero Dark Thirty. Panetta and Vickers faced no repercussions—but the Pentagon did open an investigation into who leaked the information to POGO.
Much of the group’s work focuses on national security and Pentagon waste, but has also focused on issues ranging from the Wall Street/government revolving door to the cozy relationship between the federal government and oil, gas and other extractive industries.
According to a police report from the First District of the Metropolitan Police Department in Washington, the break-in occurred sometime between 7 pm on February 11, when the last POGO worker went home, and 7 am on February 12, when the office opened.
The intruder or intruders gained entry by “prying open the entry door,” according to the report, and “once inside they attempted to pry open a file cabinet but were unsuccessful.” In the box on the incident report labeled “Is event related to occupation?” the responding officer wrote “yes,” meaning that the break-in is believed to be related to POGO’s work.
POGO’s Joe Newman told The Nation that the file cabinet in question contained accounting information and other “mundane” paperwork, and nothing related to POGO investigations. He said that POGO employees inventoried their files after the break-in, and that “there’s nothing missing that we’re aware of.” Newman said that POGO feels it has good security measures in place, but will now “take measures to increase security.”
Newman noted that several valuable items, like laptops and computer monitors, were out in the open but were not taken. He also said there were no other break-ins reported that night in the larger office building where POGO resides.
He did note, however, that it wasn’t the first time something like this happened at POGO. In 1999, when the office was in a different location, employees were called to the office overnight after the front door was opened and the alarm went off. In 1993, someone broke into POGO at yet another location and “it was clear that they were looking for something, in the sense there were files spread out all over the place,” said Newman.
And incidents like this are not limited to just POGO. When Newsweek broke the news of the POGO break-in, it also disclosed a previously unreported 2011 break-in at the Government Accountability Project, a similar whistleblower group that has recently lent support to NSA whistleblower Edward Snowden. Six computers were stolen in that incident; two belonged to GAP’s national security attorneys and one to its legal director, according to Newsweek.
Jesselyn Radack, GAP’s national security & human rights director and a legal adviser to Snowden, tweeted earlier this week that the 2011 break-in came at the height of the Thomas Drake case. Drake was an NSA whistleblower who was criminally prosecuted for his leaks, and GAP defended him.
A similar, little noticed break-in occurred last summer at a Dallas law firm representing a high-profile State Department whistleblower, Aurelia Fedenisn, who accused the department and its contractors of illicit drug use, sexual crimes and harassment.
Burglars, who were caught on camera but never identified nor apprehended, punched a whole in the wall of an office adjacent to the law firm and then stole three computers, as well as breaking into file cabinets. Silver bars and video equipment, among other valuables, were left untouched. No other offices in the large building in Dallas were broken into.
Naturally, these could all be random incidents with no relation to the respective organizations’ work. And even if that was the motive, these could easily be unrelated incidents. But no doubt it has whistleblower groups concerned.
“I can’t speculate on [motive],” POGO’s Newman told The Nation when asked if the break-in could have been motivated by a desire to gain sensitive information, or intimidate whistleblowers by giving the impression of an unsecure advocacy group. “But it wouldn’t be out of the realm of possibility,” Newman added. “The kind of work we do puts us in a place where we’re doing investigations into sensitive areas. There are certainly people out there who would like to know what we’re working on, or to see what we’ve got on them.”
Potential whistleblowers shouldn’t be concerned about POGO’s security measures, he added. “We’re going to continue to safeguard our work. If it was something that was meant to intimidate us, to intimidate potential whistleblowers—we’ve been around the block for thirty years. We’re not going to be intimidated, for sure.”
Read Next: Robert Scheer on two of the most famous whistleblowers, Edward Snowden and Glenn Greenwald.
President Obama spoke with Afghan President Hamid Karzai by phone on Tuesday, for the first time since late June, and finally issued a long-rumored ultimatum: the United States will prepare plans to withdraw all 37,000 US troops from the country in the event a bilateral security agreement isn’t signed.
Karzai has resisted signing that agreement, which a leaked draft indicated would keep a non-trivial US troop presence in the country (rumored to be anywhere between 7,000 and 15,000 soldiers) through “2024 and beyond.” The troops would serve in a support capacity, but would be authorized to conduct “counter-terror” operations as needed. Ultimately, Karzai punted on signing the BSA and said it would be up to his successor, who will be elected sometime this year.
Obama’s ultimatum to sign the BSA or risk a total US troop pullout comes amidst a widening debate in Washington over the war, which is now both the longest and least-popular in US history.
Even the administration is internally divided, according to reports. The Hill asserted in January that a fight was “raging” between the White House, State Department, and Department of Defense over whether to pull all US troops from Afghanistan after 2014.
The report said that the zero-option “is being advocated by some White House officials who believe the US should be spending more money at home versus abroad.” Obama’s ultimatum yesterday might indicate those voices have won at least a partial victory.
On Capitol Hill, more and more legislators are paying attention. As we’ve been reporting, a bipartisan group of senators has introduced a bill demanding Obama consult Congress before entering a new phase of the war in Afghanistan.
The bill, which so far has eight co-sponsors, has been referred to the Senate Foreign Relations Committee. A committee spokesman could not tell The Nation when, or if, it would be given a vote.
But some of the bill’s sponsors welcomed Tuesday’s news of the Obama-Karzai phone call. “I applaud President Obama’s decision to prepare for a complete withdrawal of all US troops from Afghanistan by the end of this year, and I hope he will choose this course regardless of who succeeds President Karzai in Afghanistan’s April elections,” said Senator Joe Manchin in a statement. “It is time to bring our troops home from our nation’s longest war.
Meanwhile, however, some pro-war Republicans are starting to speak up and sound familiar refrains about supposed surrender. For a long while the GOP has been loathe to discuss the war at any length—Mitt Romney barely mentioned it during the 2012 campaign—but Representative Buck McKeon, the head of the House Armed Services Committee, delivered a lengthy speech in Washington on Monday that took a stridently anti-withdrawal approach.
McKeon slammed Obama for allegedly failing to acknowledge recent victories in Afghanistan, and said that at times “the president openly campaigned against his own strategy” and “sent his political operatives out to stoke fatigue and hopelessness.”
Those are weighty charges, and McKeon came awful close to suggesting Obama is aiding the Taliban. “Counterinsurgencies have two fronts—the one out there, and the one right here,” he said. “The troops have held their line out there. The president has not held the line here.”
House Speaker John Boehner, perhaps sensing political opportunity, echoed those sentiments late Tuesday after the Obama-Karzai call and news of the zero-option ultimatum broke. “Over the last year, our commander in chief has often talked more about how we plan to leave Afghanistan than how we are going to achieve our mission,” Boehner said.
The increasing pressure from Republicans for Obama to stay is notable, though may end up being moot. If Karzai’s successor won’t sign a BSA, then the zero-option will almost surely be executed. If Afghanistan is willing to sign it, however, Washington still appears deeply divided on what to do. Meanwhile, the casualties continue to pile up. Far from Washington on Monday, an Oregon family held a quiet funeral for a 22-year-old Army specialist who died from small arms fire in Kapisa Province, Afghanistan, earlier this month.
Read Next: Bob Dreyfuss critiques the proposed cuts to the defense budget.
The White House budget for fiscal year 2015 will not include cuts to Social Security in the form of a Chained-CPI formula to calculate inflation, the Associated Press reported on Thursday. The proposal was included in last year’s White House budget, and Obama has repeatedly offered it in negotiations with the GOP dating back to the 2010 debt ceiling standoff.
The administration was under increasing pressure from liberals inside and outside Congress not to include Chained-CPI in the budget. On February 14, sixteen senators (fifteen Democrats and independent Bernie Sanders) sent Obama a letter asking him not to propose Social Security cuts. On Wednesday, 117 Democrats in the House—more than half the caucus—sent the White House a similar letter. Several progressive groups were also lobbying the White House and rallying members.
The progressive complaints were threefold. One was a simple policy beef. Obama’s proposal from last year would take $9,521 in cumulative benefits from an average 85-year-old on Social Security, even with protections including a small benefit bump at age 75 and protections for the very poor retirees.
After seeing food stamps slashed by $8.5 billion in the recent farm bill and the expiration of long-term unemployment benefits, progressives couldn’t accept that. “These are tough times for our country. With the middle class struggling and more people living in poverty than ever before, we urge you not to propose cuts in your budget to Social Security, Medicare and Medicaid benefits—cuts which would make life even more difficult for some of the most vulnerable people in America,” the letter from Senate Democrats said.
Secondly, many Democrats worried about the political fallout from a Democratic president proposing Chained-CPI in an election year. Even though most GOP members support the change, the head of the National Republican Campaign Committee attacked Democrats last year for wanting to cut Social Security after Obama’s budget was released. This year there was a “significant outcry” from Democrats locked in tight races over the potential proposal.
Finally, liberals also worried that repeated inclusion of Chained-CPI in Obama’s budgets would mainstream the idea and make eventual Social Security cuts inevitable.
On that count, liberals may not have as much reason to celebrate. The White House official who leaked the news to the AP also noted that Chained-CPI would remain on the table if the GOP wanted to engage in new budget talks or another “grand bargain.”
In other words, this wasn’t a substantive move away from austerity by the White House, but rather an assessment of the bargaining atmosphere on Capitol Hill.
Liberals plan to keep pushing forward on that larger battle—and want Obama to actually expand Social Security. “The Social Security COLA already doesn’t reflect the real costs seniors face, and cutting it makes no sense,” said Senator Jeff Merkley in a statement. “Middle-class Americans need retirement security they can depend on, and that starts with keeping Social Security’s promises.”
“This is a huge progressive victory—and greatly increases Democratic chances of taking back the House and keeping the Senate,” said Stephanie Taylor of the Progressive Campaign Change Committee. “Now, the White House should join Elizabeth Warren and others in pushing to expand Social Security benefits to keep up with the rising cost of living.”
Read Next: George Zornick on the battle for an increased minimum wage.
The Congressional Budget Office lobbed a small grenade into the debate over an increased minimum wage on Tuesday, releasing a report that found an increase to $10.10 an hour by 2016 would increase the wages of 25 million Americans, but also cost the economy around 500,000 jobs.
Here are the CBO’s key findings:
Seventeen million Americans would be directly affected by raising the minimum wage gradually to $10.10 by 2016, and 8 million workers who earn above $10.10 would also see indirect wage increases as a result, totalling 25 million Americans who would earn more.
A $10.10 wage hike would reduce employment by 0.3 percent, or 500,000 jobs. The CBO warns that “as with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of one million workers.”
Americans who make less than six times the poverty line (that is, $70,020 annual earnings for an individual) would see $19 billion in increased aggregate wages as a result of a minimum wage hike, with 90 percent of that going to people who make less than three times the poverty line ($35,010 in annual earnings for an individual). These are net numbers, meaning they account for the aforementioned job losses.
People making less than the poverty line ($11,060 for an individual) would see $5 billion in increased aggregate wages, which again is a net number. The CBO also says 900,000 Americans would be lifted above the poverty line.
A minimum wage hike would have no clear impact on the country’s budget deficits even in the long term.
Republicans naturally pounced on the job loss numbers. “This report confirms what we’ve long known: while helping some, mandating higher wages has real costs, including fewer people working,” said Brendan Buck, a spokesman for House Speaker John Boehner. “With unemployment Americans’ top concern, our focus should be creating—not destroying—jobs for those who need them most.”
The progressive response has been twofold: one, that the CBO’s findings on job loss are out of step with a majority of the economic research, and two, that the big picture tradeoff still makes a minimum wage hike a good deal.
Several economists Tuesday, including Jason Furman and Betsy Stevenson at the White House, stressed that the CBO report doesn’t match the “consensus view” of economists.
It’s not that the CBO cooked the books or had serious methodological problems, they say. But what the CBO did was a meta-analysis of economic data: in other words, instead of running its own empirical study on the employment effect of minimum wage increases, the CBO simply looked at a bunch of existing studies and did an analysis of that body of work.
Past meta-analyses have found that, of the many studies that have been done, the conclusions cluster around zero for job loss estimates:
The CBO of course found a slightly higher number. Nobel Prize–winning economist Joseph Stiglitz told reporters on a Tuesday afternoon conference call held by the Economic Policy Institute that he would quibble with the heft CBO gave to some studies versus others. “When you do a meta-analysis, the question is how do you weight different studies. Some of the studies come closer to being controlled experiments, and therefore have more credibility with most economists,” he said. “The CBO analysis I think underestimated the benefits and overestimated the costs in several respects.”
Lawrence Katz, an economist at Harvard University, told reporters that he thinks perhaps the CBO used a slightly higher number for elasticity of labor market demand than was necessary. “At every stage they’re being a little higher than I would do, but I think they’re trying to be reasonable at reading the evidence, and as they stress, there’s a lot of uncertainty,” he said.
But in the bigger picture, many economists said the trade-off would still be worth it even if one accepted the job loss numbers.
“I’ve worked for longer than I care to remember on policies and programs to reduce poverty and to improve living conditions at the bottom,” said Robert Greenstein of the Center on Budget and Policy Priorities. “When you have a policy that adds $5 billion in income to people under the poverty line, and lifts nearly one million of them above the poverty line…and you get all of these net gains for no federal budgetary cost, that’s a pretty good endorsement of this as a positive policy to go forward.”
Read Next: How you can support national efforts to raise the minimum wage
Democrats are planning a yearlong campaign against economic inequality as the midterm elections approach, and President Obama will kick it off in earnest Wednesday when he signs an executive order raising the contracting standards for workers on federal contracts. Over 300,000 future federal workers who would have made less than $10.10 an hour will now receive at least that.
The move is significant for a few reasons, the first being the obvious matter of fairness for these contract workers. The federal government, through contracting, employs millions of low-wage workers in a variety of large and small industries, as this chart from the think tank Demos shows:
That taxpayers are, in effect, underwriting low-wage jobs is problematic not only for these workers, but in a symbolic sense as well. The executive order Obama will sign Wednesday is hopefully a shift in thinking for Washington policymakers when it comes to substandard wages.
It also puts some muscle into Obama’s promise, repeated often during the 2014 State of the Union address, to use executive actions to get around a Congress that seems hopelessly gridlocked.
The order will unfortunately not affect workers on current federal contracts. White House officials believe changing their wages immediately would be impossible. The Procurement Act allows the president to modify contracting standards as long as the changes are both economic and efficient, and senior White House officials told The Nation that forcing changes to already signed contracts would likely violate that standard and provoke legal challenges.
But the good news is that federal contracts last only five years, so that’s the maximum amount of time it will take for all federal contract workers to be operating under the new standards.
There was some uproar last month among advocates for the disabled, because it appeared that Obama’s order would not apply to thousands of disabled workers on federal contracts. But Mike Elk of In These Times reports that the order will indeed include wage standards for those workers as well.
That victory underscores a larger victory for progressive activism here. The White House initially said it was unwilling to sign this order absent congressional action, but focused campaigns from think tanks, organizers and unions apparently changed the White House’s mind. That’s a lesson activists will take to heart as the year progresses.
Read Next: what to do, read and watch to learn about—and support—raising the national the minimum wage
From the moment Congress passed the Ryan-Murray Bipartisan Budget Act of 2013—actually, even before it was passed—legislators from both parties were in an uproar about the legislation’s modest cut to military pensions. Contemporaneous news accounts immediately predicted the provision would be repealed, and indeed, the House passed a bill Tuesday, 326-90, repealing the military pension changes and offsetting the cost by extending sequestration. The Senate appears set to pass the House bill as early as Wednesday afternoon.
But virtually invisible from this debate have been the pension cuts to civilian federal workers. The Ryan-Murray bill didn’t just cut $6.3 billion from military pensions, but also found $6.3 billion in savings in the pensions of new federal civilian workers.
There has been nary a peep about these cuts in the Washington debate, and they aren’t likely to be reversed any time soon. In small part, this may be because the pension changes for civilian federal employees only affect new hires, while the military changes apply to current retirees and active duty troops soon to retire. In other words, there was more of an active, organized constituency of people that would be affected almost immediately.
But the repeal of only the military pension cuts violates the basic spirit of the Murray-Ryan agreement, which was to treat defense and non-defense spending equally. Paul Ryan specifically applied this principle to the pension changes during a December press conference announcing the legislation. “We also believe it’s important that military families as well as non-military families are treated equally and fair,” he said.
The most important context here, however, is the serious economic damage that has already been visited on federal workers by both Democrats and Republicans over the past several years. Federal civilian workers endured a multi-year wage freeze, initiated by President Obama, that began in 2010 and just ended earlier this year. They also were subjected to furloughs and work disruptions thanks to both sequestration and the government shutdown in October.
These disruptions were serious matters for federal employees—84 percent of them said the shutdown alone caused them to cut back spending on “necessities,” according to the National Treasury Employees Union, while 48 percent said they were delaying medical treatment to save money. Crucially, 67 percent said they would discourage others from working for the federal government, which could present serious challenges to future recruitment of talented people to the federal workforce.
In total, this means that federal workers—who represent less than one percent of the total population—have contributed close to $140 billion to deficit reduction. Advocates for these workers, both inside and outside Congress, are incensed. In fact, federal workers rallied outside the Capitol this week and demanded an end to their punching-bag status. “We’ve got to get Congress to understand that federal employees have given enough,” Everett Kelley, American Federation for Government Employees vice president for the Southeast region told the crowd, according to the Washington Post. AFGE's president, J. David Cox, put it a little more directly: "We ain't taking crap from nobody no more." The NTUE told The Nation it will work to overturn the pension cuts for new civilian employees.
But these voices are barely being heard in the broader deficit debate in Washington. The military pension cuts, and those cuts alone, are about to be swiftly and uncontroversially restored. And maybe they should be—to many people, it rightfully seems perverse for the country to launch two wars without paying for them, and then ask the people who served in those wars to help pick up the tab via their pensions. But why should a veteran’s pension be any more sacred than the pensions of federal workers who are helping to clean up pollution, prosecute criminals, predict tornadoes or research cancer?
This whole drama underscores, yet again, a truly problematic political trend. It’s long been obvious that deficit hawks are much less interested in deficit reduction per se, and much more interested in enacting their particular priorities with deficit reduction as the window dressing. (Think, for example, of the GOP bellowing about the deficit but refusing to raise a penny of new revenue.) Too often, “deficit reduction” simply becomes a meat axe that hacks away at government services for those with the least powerful voices in Washington.
The debate this year in Washington has underscored this problem again and again. The farm bill preserved rich subsidies for agribusiness while cutting food stamps. Now, Congress will restore the military pension cuts while ignoring the equally damaging cuts to civilian workers, who are much more easily maligned in the public debate.
And note: the extension of long-term jobless benefits for three months, which was repeatedly rejected in the Senate, coincidentally carried almost the exact same price tag as restoring the military pension cuts. But based on the way this Congress operates, don't expect three-to-one votes to help the jobless anytime soon.
Read Next: John Nichols on why Republicans attacks on executive orders are wrong.
In a matter of months, or perhaps weeks, the United States and the government of Afghanistan could sign a security agreement that would dramatically extend what is already the longest war in US history. Leaked details reflect a plan that would keep around 10,000 US troops in Afghanistan through “2024 and beyond,” and they would still conduct combat operations against “terror” threats, which of course in Afghanistan, could be a very wide definition. In other words: indefinite war.
But a bipartisan group of senators launched a concerted effort on Thursday to slow the rush to further war. A resolution co-sponsored by Democratic Senators Jeff Merkley and Joe Manchin and Republican Senators Mike Lee and Rand Paul would demand a debate in Congress followed by a vote authorizing a US military presence in Afghanistan after 2014.
“The decision about whether to extend the military mission in Afghanistan until 2024 is too important to be made without public debate,” Merkley said during a press conference in the Capitol. “Automatic renewal is fine for Netflix and gym memberships. But it isn’t the right approach when it comes to war.”
This same group tried to attach a similar amendment to the defense authorization bill at the end of last year, but majority leader Harry Reid didn’t allow a vote. The resolution did, however, quickly gain twelve co-sponsors from both parties. Meanwhile, the House of Representatives actually passed a very similar amendment to the defense authorization bill last summer with a stunningly bipartisan 305-121 vote, though it failed to make the final bill.
The senators present Thursday expressed genuine optimism the effort could succeed this time around. Manchin spoke with The Nation after the press event, and said the public sentiment in West Virginia was overwhelming. “We have a state that’s very proud of defending, and going anywhere we’re asked to go. It’s just enough. That’s exactly what I hear. It’s time to leave,” he said.
Indeed, a recent CNN poll showed opposition to the war is at 82 percent nationwide, making it arguably the least popular war in US history.
Manchin told The Nation that it was time for Congress to consider the views of the public on fighting a longer war. “If the people of the respected states of this great country speak to their representatives, I think all the representatives are going to find out this is one thing that unites us all,” Manchin said. “It’s something that doesn’t escape, it doesn’t leave you, and there’s no explanation. I can’t explain why we’ve been there twelve years.”
He cited frustration with a lack of clear goals in the country, and said the terror threat has long since been ameliorated in Afghanistan, and the new government was too difficult to work with. “We do not have an ally in Karzai. Anybody that believes we do, I’ve got oceanfront property in the mountains of West Virginia,” he said.
If this effort doesn’t work out, more aggressive measures could be taken—like modifying the 2001 authorization for use of military force. Manchin said they would “look at everything available” but were first focused on at least having a debate in Congress.
While the 2001 authorization legally allows Obama to continue the war on his own, the Senators present on Thursday feel that the spirit of congressional input would still be violated if the war was extended another decade.
“The president has said repeatedly, including very recently in his State of the Union address, that the military will conclude operations in Afghanistan at the end of 2014. Therefore it only makes sense that any proposal to keep troops in Afghanistan past the end of the year would begin a new chapter in our relationship with Afghanistan,” Lee said. “The decision to sacrifice American blood and treasure in this conflict must not be made by the White House and Pentagon alone.”
“This is about rejecting military action on autopilot,” said Merkley.
Read Next: Bob Dreyfuss on what it might take to remove US forces from Aghanistan
The Senate is still trying to figure out a way to pass an extension of long-term unemployment insurance, which expired for 1.3 million people at the end of 2013. In case you’ve missed the debate, Republicans went from saying the extension wasn’t necessary to saying they would like to support it, but the benefits had to be offset by corresponding budget cuts. This has left the Senate twisting the Rubik’s Cube of deficit reduction measures for six weeks, trying to find an acceptable “pay for” so that Republicans can join Democrats in passing an extension. (While, of course, over a million Americans try to get by without badly needed benefit checks.)
The debate will come to a head once again this week: on Thursday, the Senate will vote on a three-month extension of the unemployment benefits. And the “pay for” attached to it deserves its own glass case in the Deficit Reduction Hysteria Hall of Fame.
This particular device is called “pension-smoothing,” a sleight of hand that Congress has used before. The Center on Budget and Policy Priorities has a lengthy rundown of the policy, but here are the basics. The federal government requires employers to fund a certain percentage of their pension plans so the plans remain solvent, and “pension-smoothing” tweaks the formula used to figure out the employer contributions to correspond more closely to historical trends. The practical effect is that for the next few years, employers will contribute less to their pension plans, and then will contribute more in later years.
When employers contribute less to their pension plans, it raises revenue for the federal government, since the contributions are tax-deductible. So voilå, the cost of the extension has been offset!
But, again—that only lasts few a few years. Pension-smoothing formulas require higher contributions in later years, which then of course means less federal revenue. That does worse than cancel out the early deficit reduction that pension-smoothing achieves: it actually overwhelms it. As each year with higher contributions passes, the whole pension-smoothing plan will at one point become revenue-neutral. Then every year past that, barring any changes, it actually increases the deficit.
In other words, it’s a deficit reduction device that does the opposite, unless you only look at it from a certain angle, or pretend that the world ends around 2019.
Now, we’ve been chronicling how badly the long-term unemployed need this extension, and also criticized deficit reduction efforts that actively harm people. Pension-smoothing doesn’t harm anyone. And if it gets the bill passed, then terrific.
But the lengths Congress will go to in order to kneel at the altar of deficit reduction are just getting ridiculous. It’s clear at this point, as if it wasn’t before, that many people who claim to be deficit hawks don’t actually care that much about the long-term deficit. Maybe it’s time to give up the charade?
Read Next: George Zornick on how Senators from the states with the highest unemployment hurt unemployment insurance benefits
During Tuesday’s State of the Union address, President Obama announced that his administration would exercise its executive power to create a new kind of savings account designed to get Americans who aren’t saving for retirement on the right path:
Today, most workers don’t have a pension. A Social Security check often isn’t enough on its own. And while the stock market has doubled over the last five years, that doesn’t help folks who don’t have 401ks. That’s why, tomorrow, I will direct the Treasury to create a new way for working Americans to start their own retirement savings: MyRA. It’s a new savings bond that encourages folks to build a nest egg. MyRA guarantees a decent return with no risk of losing what you put in.
The MyRA accounts are essentially small Roth IRAs, which are individual retirement accounts with no tax impact—the money that goes in is from after-tax earnings, the account isn’t tax deductible and withdrawals generally aren’t taxed either. The money is invested in relatively safe stocks and bonds.
The MyRA accounts, unlike a normal Roth IRA, are backed by the Treasury Department and have safe investment vehicles that guarantee a return. It won’t be much, but slightly larger than a traditional Treasury bill. (The lack of tax impact is important here—the Treasury Department has the authority to offer certain financial instruments, but they can’t change the tax code without violating Article 1 of the Constitution.)
After Obama signs the order, employers will be able to offer these accounts to employees with minimal hassle—the company doesn’t have to pay into the account, or really do anything besides direct employees to sign up.
In the hours before Tuesday’s State of the Union address, senior White House officials described what they see as the benefits: namely, that Americans aren’t saving enough, and that there are many people who aren’t saving at all. Perhaps those people are put off or confused by complicated financial products, and so the MyRAs are designed to offer an easy starter option with a guaranteed payback that would habituate people to saving for retirement.
Once the funds hit $15,000, they would be rolled over into a traditional IRA, though MyRA holders could initiate that rollover any time they like.
The administration is right—savings have leveled off in recent years, except for top earners, and will likely provoke a severe retirement crisis in the coming years. The so-called retirement income deficit is at least $6.6 trillion. Here’s a chart from the Economic Policy Institute demonstrating the trends:
So the MyRA accounts will no doubt help many people start saving money for retirement, and can be done immediately without waiting for Congress. There are seventy-five million Americans with no access to a workplace retirement plan, and so, assuming they have a job, the MyRA is perfect for them. The cost to taxpayers should be relatively low, too.
But in the larger context of how to solve the country’s looming retirement crisis, some progressive policy experts see a problem here. Or rather, they see a route not taken.
In recent months, the idea of expanding Social Security has taken root among progressive activists and a growing number of liberal politicians. Senator Elizabeth Warren notably called for Social Security to be expanded late last year, and Senator Tom Harkin will unveil a plan this week for a new type of private, universal retirement plans that combine the benefits of both traditional pensions and 401(k) accounts.
Some experts, then, see the MyRA proposal as a retreat from that approach, even if on its face it’s a good idea. “Though it’s a very modest initiative, it would still encourage some people who are scared off of IRAs to save, and save more,” Monique Morrissey, an economist with EPI, told The Nation.
“[But] with Elizabeth Warren’s very strong endorsement that we need to expand Social Security, the most obvious thing that he should have done is reinforce the importance of Social Security, at a minimum. He didn’t do that,” she added.
Many progressives want to get Americans away from risky IRA-style investment accounts that divert savings into the stock market, which can naturally be quite volatile. But Morrissey sees this proposal working to prop up Wall Street retirement accounts by serving as a feeder to that system.
“This is clearly designed to not pose a threat to the industry,” she said. “And arguably to sort of grow accounts so they become attractive to the industry once they are rolled over.”
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