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The Federal Palace of Switzerland, which houses parliament and other government offices. (Wikimedia Commons)
Does anyone seriously doubt that, if America had the same national referendum system that Switzerland does, voters in the United States would vote just as aggressively as the Swiss have to curb CEO abuses?
Actually, the 68 percent support for Sunday’s Swiss referendum that gives shareholders broad new powers to curb excessive pay for bankers and corporate executives might well be shy of the mark that the US could hit.
Polls of American voters have regularly shown that over 70 percent favor restrictions on executive compensation, with even self-identified conservatives registering majority support for clamping down on CEOs.
And rightly so. It is not jealousy that motivates concerns about CEO pay. As the AFL-CIO’s Executive Paywatch campaign notes, when CEO pay rises so too does income inequality. In 2010, as the United States emerged from the depths of the Bush recession, a study by University of California economist Emmanuel Saez found that the top 1 percent of Americans captured 93 percent of the growth in income.
Worse yet, CEOs use their money to game the system so that they get richer while the great mass of Americans are squeezed. More than 120 CEOs are currently supporting billionaire Pete Peterson’s “Fix the Debt” campaign, which is chaired by Erskine Bowles and Alan Simpson. A deficit-reduction plan proposed by Bowles and Simpson last month would slash cost-of-living increases for Social Security recipients while at the same time reducing the top marginal tax rate for corporations and the wealthy.
In Switzerland, anger at “golden handshake” and “golden parachute” deals for executives who ran corporations poorly and seemed to be more concerned for their own good than for the long-term economic prosperity of their country, led by small businessman and parliamentarian Thomas Minder to mount a populist campaign to increase the authority of shareholders to regulate errant CEOs.
As in the United States, that’s the sort of proposal that gets a lot of talk but that was not likely to go far in the corridors of political power in Switzerland. Luckily, Switzerland has a long history of allowing citizens to initiate and implement legislative changes. Under Swiss law, any issue can be put to a national referendum if supporters of a vote attain 100,000 petition signatures seeking the test. In recent years, the Swiss have voted on people’s initiatives to guarantee “six weeks of vacation for everyone,” to put an “end to the limitless construction of second homes” that crowd Alpine villages, to expand the ability of tax-supported building society savings to finance energy saving and environmental measures, and to require money gained from maintaining casinos be used for the public interest.
Minder, who has been campaigning for years to address excessive pay for executives he refers to as “losers of the century” and “studs in pinstripes,” was elected to the Swiss Senate as an independent (who has since sided with conservatives on some issues and the Greens on others) in 2011. He agitated on the inside of government for moves to empower shareholders, but quickly turned to the referendum route. Condemned as a “loner” and criticized for being uncompromising, Minder went up against the political and economic establishment in Switzerland, a country that has long been a haven for multinational corporations and banks. His “Minder Initiative” drew aggressive opposition from prominent business and political leaders. But it made sense to voters, especially as Minder explained: “I never said that my goal was the reduction of salaries. I just want shareholders to take responsibility for the levels of remuneration. If the shareholders want to waste company money by paying exorbitant amounts, that’s their problem.”
At the very least, the sweeping victory for reform in Switzerland has sent a signal. One of the leading newspapers in the banking center of Zurich, Tages-Anzeiger, observed Monday morning that the decision was “a vote in favour of decency and fair salaries.” The vote “does not above all express envy,” the newspaper’s editorial continued, “but a feeling that company managers have been ransacking the coffers at the expenses of society.”
The Minder Initiative serves as an important model for US discussions about increasing shareholder rights. And that discussion can and should go well beyond the question of CEO pay.
In 2010, the US Supreme Court’s Citizens United ruling removed barriers to unlimited corporate spending on US political campaigns. At the same time, highly compensated CEOs are among the biggest direct donors not just to individual campaigns but to so-called “Super PACs” that flood the airwaves with negative advertising.
The Citizens United ruling will ultimately need to be addressed either by a reversal of the court’s decision or by a constitutional amendment. But of the immediate fixes that have been proposed, one of the best is the suggestion that shareholders be given the right to vote on corporate political expenditures. Britain has such a law. But the United States does not. As a result, notes the Brennan Center, the “Citizens United decision opened a loophole in which one group of Americans—shareholders in publicly traded companies—must routinely support political goals that they may reject. Under Citizens United, corporations can spend directly from their treasuries to influence elections. When shareholders’ invested money is spent on politics, millions of Americans are stuck unknowingly contributing to political causes they may not themselves support.”
In 2011, Congressman Michael Capuano (D-MA) introduced an American Shareholder Protection Act to empower shareholders to vote on whether to allow CEOs and corporate boards to spend company money on political campaigns. “Shareholders—not the CEO and not the board of directors—are the real owners of any publicly traded corporation, and the decision should be theirs,” argued Public Citizen in campaigning for the measure, which attracted forty-nine co-sponsors.
Public Citizen has also led the campaign to get the Obama administration to crackdown on federal contractors that use corporate money—from accounts padded with taxpayer dollars—to fund campaigns. Which raises an interesting question: Could the president issue an executive order giving shareholders of companies that contract with the government the authority to decide whether those firms should play politics with corporate money?
The Swiss vote for the Minder Initiative is drawing a lot of attention in the United States.
That’s good. Hopefully, it will lead to greater pressure for reducing excessive CEO pay.But it is essential to recognize that simply regulating CEOs is not enough.
Shareholders should be empowered in the US, as they have been in Switzerland. “The shareholders are the owners of the company,” explains Julie Goodridge, CEO of NorthStar Asset Management of Boston, a socially active investment firm. “They need to be voting on these kinds of contributions.”
As Public Citizen notes, “Anyone with a 401(k) invested in stocks or mutual funds—nearly half of all households today—has a stake in how the corporate money in those funds is spent. Passage of a Shareholder Protection Act would help the public hold corporations accountable for their political behavior.”
And, make no mistake, if the United States had a national referendum model like Switzerland, we would not have to wait for Congress to act. The voters would pass a Shareholder Protection Act. And probably by a wider margin than Switzerland’s 68 percent.
The Obama administration has been a revolving door for corporate leaders. Read Josh Eidelson and Lee Fang’s analysis of Obama’s nominee to head the Office of Management and Budget—the president of the Walmart Foundation.
Former Vice President Dick Cheney lurks in the Old Senate Chamber on Capitol Hill. (AP Photo/Charles Dharapak)
After the Republicans gained control of the US Senate in the 2002 election, giving them across-the-board dominance of the legislative and executive branches of the federal government, the key players in the administration of President George W. Bush gathered to discuss fiscal policy.
Vice President Dick Cheney wanted to cut taxes for the rich.
Treasury Secretary Paul O’Neill was skeptical. According to his recounting of the incident in Ron Suskind’s brilliant book, The Price of Loyalty, O’Neill expressed concern that a trillion dollars worth of tax cuts had already been enacted. O’Neill was no liberal. He liked tax cuts. But with the country rebuilding from the economic slowdown after the 9/11 attacks, and with a war being fought in Afghanistan and another on the horizon in Iraq, O’Neill noted that the budget deficit was increasing. And he argued against Cheney’s position, suggesting that another tax cut was unnecessary and unwise.
“You know, Paul, Reagan proved that deficits don’t matter,” said the vice president. “We won the mid-term elections, this is our due.”
O’Neill was, according to Suskind, left speechless.
But Cheney wasn’t done. He and the Bush-Cheney administration that he served as CEO piled up deficits and debts. Indeed, as The New York Times has well noted, “Under Mr. Bush, tax cuts and war spending were the biggest policy drivers of the swing from projected surpluses to deficits from 2002 to 2009. Budget estimates that didn’t foresee the recessions in 2001 and in 2008 and 2009 also contributed to deficits. Mr. Obama’s policies, taken out to 2017, add to deficits, but not by nearly as much.”
Now, a decade later, Cheney’s party is arguing that deficits matter. A lot. House Republicans are so fretful that they are willing to steer the country toward chaos by refusing the compromises that would avert across-the-board sequester cuts. Other Republicans uncomfortable with sequestration are pushing an austerity agenda that’s better organized than the sequester, but potentially even more painful.
The fact is that deficits are relevant.
So are debts.
Nations must treat them seriously.
But nations do not have to fear deficits, any more than Dick Cheney did on that day in the fall of 2002. And in that sense Cheney was right: deficits don’t matter if they are employed for a purpose. Cheney’s purpose—cutting taxes for the rich—was dubious. But stimulating the economy, expanding access to healthcare, funding state and local governments and protecting seniors on Social Security… these are good, and necessary, purposes.
Spending has value, especially when it is needed. As Bob Borosage of the Campaign for America’s Future reminds us: “The U.S. has witnessed slow growth since coming out of the Great Recession in 2009. The result has been a deficit that has come down from over 10 percent of gross domestic product to a projected 5.3 percent of GDP this year (slightly higher if Congress is sensible enough to repeal the sequester) and a projected 2.4 percent in 2015 (if congressional austerity bombs don’t blow up the weak recovery).”
For Cheney’s political heirs to claim now that the United States is in crisis, or at a “tipping point,” is absurd. For them to refuse to govern until they get their way, throwing one tantrum after another, is irresponsible. For them to see value in sequester cuts that impose real pain on real people is not just crude, it’s economically senseless—and dangerous to the long-term prospects for economic renewal and growth.
President Obama needs to push back against the deficit fabulists. He does not have to echo Cheney’s glib “deficits don’t matter” talk. But he should explain, as economist Dean Baker does, that the ranting and raving about deficits and debts by groups such as Pete Peterson’s Fix the Debt campaign and its co-chairs, Erskine Bowles and Alan Simpson, is “the great distraction.”
America should be focused on the economic challenges that have slowed our economy, and that have caused our government to run up deficits and debts. We need to be focused on putting people to work and growing the economy, not playing sequester games that result in real job losses and create an equally real threat of recession.
When the Fix the Debt crew gather, as Baker has noted, “many of the people most responsible for the current downturn come together to tell us why we should be worried about the deficit at a time when 25 million people are unemployed, underemployed or have given up looking for work altogether and millions face the prospect of losing their homes.”
Our concern as a country should be with shaping the policies and making the investments that find work for the jobless and create the robust economic growth that creates surpluses. That’s far more vital than the focus on fiscal issues and the deficits that Dick Cheney explained—back when he was in power—“don’t matter.”
What is Fix the Debt? And who’s behind it? Watch John Nichols’s take.
Robin Kelly celebrates her special primary election win for Illinois' 2nd Congressional District. (AP Photo/Charles Rex Arbogast)
Robin Kelly, who as a young state representative sponsored gun-safety legislation with state Senator Barack Obama, swept to victory Tuesday night in an Illinois US House primary that sent a powerful signal about the National Rifle Association’s dwindling influence within the Democratic Party.
Kelly won 58 percent of the vote in a crowded field, easily defeating former Congresswoman Debbie Halvorson and other Democrats to win the nomination to replace former Congressman Jesse Jackson, Jr., as the representative from Illinois’s 2nd district.
In a multiracial district that includes parts of Chicago, as well as suburbs and rural regions of a district that stretches across northeastern Illinois, Halvorson began the race as the front runner. In addition to her status as a former House member, she was the only white candidate in a field where the African-American vote was divided among more than a dozen contenders.
After the Newtown, Connecticut, shootings focused the attention of the country—and Illinois—on the gun debate, however, Kelly made support for gun-safety legislation central to her campaign.
Kelly’s “Help Me Fight Gun Violence” message united African-American and progressive white voters against Halvorson, who had accepted NRA support in previous races and who continued to support NRA positions on many issues.
Though President Obama, who has made te fight for gun-safety legislation a priority of his second term, stayed out of the race, Kelly promised to champion legislation backed by the president—who her ads noted she had worked with a decade ago, when they both served in the Illinois legislature.
As she claimed victory Tuesday night, Kelly told her backers, “Today you did more than cast a vote. You did more than choose a Democratic candidate for Congress…You sent a message that was heard around our state and across the nation; a message that tells the NRA that their days of holding our country hostage are coming to an end.”
New York Mayor Michael Bloomberg, who has pledged to fight the NRA’s political influence nationwide, used his Independence USA political action committee to air more than $2 million to oppose Halvorson and back Kelly.
The Illinois Rifle Association, an NRA affiliate, backed Halvorson with late-stage mailings.
But it was Kelly’s steady focus on the gun debate that gained her the upper hand in the race.
The NRA and its apologists will, of course, claim that the Illinois district was a bad battleground for the group and its message. Illinois is not West Virginia or North Dakota, after all. And the Chicago area has bitter experience with gun violence, as Kelly noted in a campaign that focused on the anger and pain felt in neighborhoods where too many young lives have been lost to shootings.
But advocates for tougher gun laws recognized the significance of the Illinois result.
“Robin Kelly’s victory tonight is a withering blow to the NRA and others who think we shouldn’t do anything to prevent the gun violence that took the lives of 20 children in Connecticut in December and ravages the streets of cities like Chicago every single day,” announced Arshad Hasan, the executive director of Democracy for America, which backed Kelly. “This was the first time since the tragedy of Newtown that advocates for gun violence prevention have taken on the NRA and their allies—and we won. We’re incredibly proud of the over $15,000 and hundreds of volunteer hours Democracy for America members contributed to Kelly’s win tonight, because we know she’ll fight in Congress for the stronger, common sense gun laws that most Americans support.”
Whatever the dynamic of the district and the state, there is no question that Halvorson had initial advantages that were undone by her association with the NRA and by Kelly’s decision to run on a five-point pledge that declared she would work to:
1. Pass a comprehensive ban on assault weapons.
2. Eliminate the gun show loophole.
3. Pledge never to receive support from groups that oppose reasonable gun safety legislation.
4. Ban high capacity ammunition magazines.
5. Support laws that prohibit conceal-and-carry permits.
“While we don’t know who will represent Illinois’ second district in Congress, we do know that addressing the issue of gun violence will be among the very first issues they face,” Kelly declared early in the campaign. “I believe we need more leaders in Congress addressing the issue of gun violence in our cities and our communities. For this reason, I believe we must all speak with one voice on this urgent matter.”
Primary voters in the 2nd district of Illinois spoke with that united voice Tuesday. And they said “no” to the NRA. Loudly. Perhaps so loudly that Democrats in Congress, many of whom have been cautious gun-safety advocates, will help Robin Kelly fight gun violence.
Why won't Rahm Emanuel apologize for police brutality in Chicago? Read Flint Taylor's take.
President Barack Obama waves before giving his State of the Union address. (AP Photo/Charles Dharapak, Pool)
President Obama, who famously used his 2010 State of the Union address to rip activist Supreme Court Justices for removing longstanding barriers to corporate control of the political discourse, did not mention the Court’s wrongheaded Citizens United decision in his 2012 State of the Union address.
That was concerning.
Not just because the president’s support is needed to expand the campaign to amend the Constitution so that it is clear free speech rights are afforded citizens, not corporations. But because this is a moment when it is essential to explain how Wall Street is using its “money power” to thwart the will of the people when it comes to debt and deficit debates.
As the country stumbles toward sequestration, powerful forces are seeking to take advantage of the wrangling. Hoping to capitalize on popular frustration with the fighting in Washington, the failed proponents of a far deeper austerity than sequestration would impose, Alan Simpson and Erskine Bowles, are back with a new plan to hack away at Social Security, Medicare and Medicaid.
They are advancing failed ideas, which have already been proven by the bitter experience of European nations to stall growth and increase unemployment.
They are advancing failed ideas that have already been rejected by the America people, who voted in the 2012 election against candidates endorsed by Simpson and Bowles and against the most prominent American champion of austerity: House Budget Committee chairman and defeated Republican vice presidential nominee Paul Ryan.
Yet they are being heard because of a massive new “Fix the Debt” campaign, which is already spending tens of millions of dollars on advertising and lobbying to repurpose Simpson-Bowles as the only answer to what ails the economy. With financial backing from the nation’s wealthiest CEOs, they are not just advancing an agenda. They are speaking to elected officials as individuals with the power to direct vast resources toward the cause of re-electing or defeating favored contenders.
In the Citizens United era, when corporations and CEOs can spend as they please to influence elections, that’s a powerful threat.
And Obama should address it.
We know the president is aware of the threat. We know that he sympathizes with those who would amend the Constitution to address the money power. Indeed, during the course of the 2012 campaign, Obama indicated that he was supportive of an amendment.
After he won that re-election, however, there were fears that Obama and the Democrats had decided that, while they might not always be able to match Republican spending, they could hold their own.
Reformers launched a campaign to get Obama to use his 2013 State of the Union address to formally “call for a constitutional amendment to get big money out of politics.”
A petition on the White House website—initiated by John Bonifaz and the group Free Speech for People, and supported by People for the American Way, Demos and Avaaz.org—declared: “Our democracy is broken, flooded by money from corporations, billionaires and SuperPACs that puts their interests over those of the public. From big banks sinking our economy while blocking real reform to the NRA preventing sensible gun safety measures, big money forces are corrupting our politics. Since the US Supreme Court has ruled that corporations and wealthy donors have the right to spend unlimited money in our elections, a growing popular movement is now calling for a constitutional amendment to reclaim our democracy. Eleven states and nearly 500 cities and towns have joined this call. We petition President Obama to use the State of the Union to call for a constitutional amendment to reduce the influence of money in our political system and restore democracy to the people.”
The petition attracted more than the 25,000 signatures required to get a White House response. Indeed, it eventually attracted close to 40,000 signatures. But the State of the Union address came and went without mention of Citizens United or the amendment.
Then, late last week, the White House replied with an encouraging announcement: “You’re right.”
In this year’s State of the Union address, [the] President chose to prioritize an economic agenda to create jobs and invest in infrastructure, clean energy, and education. He also called for a National Commission to address the long lines and other chronic problems at the polls every election.
But that doesn’t mean fighting the influence of money in politics isn’t important. In fact, President Obama agrees with you.
That’s a point he made clear last fall, saying: “Over the longer term, I think we need to seriously consider mobilizing a constitutional amendment process to overturn Citizens United (assuming the Supreme Court doesn’t revisit it). Even if the amendment process falls short, it can shine a spotlight of the super-PAC phenomenon and help apply pressure for change.”
Now, it’s going to take more than a response to this petition or a paragraph in a future State of the Union to get this done. Our founders quite consciously made amending the U.S. Constitution a difficult piece of business.
That’s where you come in. If this is a fight that motivates you, you need to work for it. Keep making your voice heard and encourage others to take a stand against limitless corporate spending in our elections. And speak out in favor of changes that will reduce the influence of special interests.
There’s a reason that this President has worked to make his administration the most open and accountable in history. He’s trying to lead by example, and change Washington from the ground up.
That’s why he banned lobbyists or lobbying organizations from giving gifts to appointees in the executive branch. That’s why he directed agencies to stop appointing lobbyists to federal boards and commissions. That’s why lobbyists aren’t allowed to work in the Administration on matters or agencies they had lobbied in the preceding two years. And that’s why appointees aren’t allowed to lobby the Administration once they leave.
It’s why our visitor logs, daily public schedules, staff salaries, and ethics waivers are all posted on the White House website. And it’s why we’ve created a program like We the People—to allow citizens like you to write to us directly and build support to compel our response.
If we want to get this done, we all have plenty of work to do in the months and years ahead. So let’s keep at it.
That’s not a bad response, except, of course, that it did not come in the State of the Union address.
In some senses, the White House statement recalls President Franklin Delano Roosevelt’s response to New Deal–era progressives who wanted him to step up the fight for economic and social democracy: “Go out and make me do it.”
But only in some senses.
FDR did encourage activists to press their agendas agressively so that he could better bargain with conservatives in his own party and on the Republican side of the aisle. But he gave those activists more than vague encouragement, especially at points when the battle lines were being drawn on fiscal and economic issues.
Roosevelt used his first Inaugural Address to call out the “rulers of the exchange of mankind’s goods” and to declare that the “practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.”
He portrayed a struggle between Wall Street and the great mass of Americans in biblical terms, announcing: “The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.”
Roosevelt did not merely express agreement with critics of Wall Street as an economic and political force, he defined that criticism. Throughout his tenure, FDR decried “economic royalists.” “Unhappy events abroad have retaught us two simple truths about the liberty of a democratic people,” he argued. “The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic State itself. That, in its essence, is fascism—ownership of government by an individual, by a group or by any other controlling private power.”
That was blunt language. Blunt enough to clarify the lines of division on questions of economic democracy, and to rally citizens—and ultimately mass movements—to the cause of economic democracy.
Obama would do well to recognize, as Roosevelt did in the 1930s, that the United States is not just wrestling with economic and fiscal issues. This is a time for addressing critical questions of how democracy itself will operate.
For so long as the “money power” is able to use its resources to reanimate and reassert failed ideas, the United States will fail to consider a proper range of responses to economic issues. The balance will tip too far toward those who pay for campaigns, and for the lobbyists who seek to undo the results of lost elections.
President Obama should, in the style and tradition of FDR, declare that he is against austerity and against the broken politics that keeps buying a place in the debate for “Fix the Debt” fantasies that the American people have repeatedly and soundly rejected. And he can do that by going beyond mere agreement with reformers to a full and muscular embrace of the reform agenda that shifts the defining power in our discourse away from corporations and toward citizens.
Watch John Nichols's segment on the "Fix the Debt" campaign.
“Fix the Debt” bankroller Pete Peterson. (Reuters/Jason Reed)
There is a great deal of talk about how Republican senators have gone off the rails in their opposition to the nomination of former Senator Chuck Hagel to serve as Secretary of Defense. And there have been some bizarre deviations, with senators making pronouncements based on internet rumors and unfounded speculation.
But none of the fantastical filibustering of the Hagel fight can compare with the delusional dialogue regarding the federal budget.
To hear the billionaire proponents of austerity tell it, America is teetering on the brink of economic ruin. America, we are told, is broke. And the only answer is to “Fix the Debt” with deep spending cuts followed by the radical reordering of Social Security, Medicare and Medicaid.
But America is not broke.
America has broken priorities.
That’s what the billionaire proponents of cuts-at-any-cost economics won’t acknowledge as they advance a “Fix the Debt” agenda that imposes austerity on everyone else, while stacking the deck in their favor.
It is vital to understand that there is an economically and socially viable alternative to austerity cuts. It’s a growth agenda that addresses waste, fraud and abuse while finding new revenues to invest in job creation, education and expansion of access to healthcare.
The growth agenda, as proposed in the “Balancing Act” advanced by leaders of the Congressional Progressive Caucus, asks billionaires to pay their fair share in order to expand employment and opportunities.
The austerity agenda asks everyone but the billionaires to pay: via cuts not just to benefits and services but to jobs.
The anticipated March 1 sequestration, which proposes across-the-board cuts, is an example of austerity.
It continues a two-year-long process of slashing federal programs that are of value to Americans.
But it demands nothing new of billionaires and corporations that are on the winning end of rapidly expanding income inequality.
If we have learned anything from cuts in Europe it is that with austerity comes unemployment.
Even Barack Obama’s critics tend to shy away from arguing against the reality that the president was right when he said: “These cuts are not smart, they are not fair, they will add hundreds of thousands of people to the unemployment rolls. This is not an abstraction. People will lose their jobs. The unemployment rate might tick up again.”
The only place for quibbling is with the word “might.”
Austerity, in the form of the sequestration of federal spending that is set to begin March 1, will result in job losses.
Austerity in the the form of a renewed push by Alan Simpson, Erskine Bowles and the billionaire-backed “Fix the Debt” campaign to assault Social Security, Medicare and Medicaid, has the potential to lead to even more significant job losses.
How many jobs? The most hopeful estimates begin in the range of the 700,000 losses predicted by the Macroeconomic Advisers research group. But they could go much higher, according to an October report to Congress by the Congressional Research Service.
But the sequestration is not the worst of it.
The sequestration is the start, not the finish, of a process that undoes economic recovery and causes job losses to spike by even greater numbers.
Simpson and Bowles are back, promoting schemes such as “chained CPI,” the slashing of cost-of-living increases for Social Security recipients that will squeeze the buying power of seniors and people with disabilities and further impede economic growth.
That will cost even more jobs. And why?
In the case of the sequestration fight, to preserve tax loopholes that benefit millionaires and billionaires and multinational corporations that shift jobs overseas.
In the case of Simpson-Bowles, to lower top marginal tax rates that benefit millionaires and billionaires and multinational corporations that shift jobs overseas.
This is what austerity is all about: exploiting fiscal challenges in order to redistribute the wealth upward.
Louis Brandeis argued in another era of wrangling over economic and fiscal policy: “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”
Today we may say, extending upon the wisdom of Justice Brandeis, that “we must make our choice. We may have a measure of economic democracy and with it job growth, or we may have austerity with the purpose of further concentration of wealth in the hands of a few, but we can’t have both.”
Sequestration? How about ending childhood poverty, Greg Kaufmann asks.
Alan Simpson, right, and Erskine Bowles, left, co-chairmen of the National Commission on Fiscal Responsibility and Reform, testify on Capitol Hill, March 8, 2011. (AP Photo/J. Scott Applewhite)
Cue the return of Alan Simpson and Erskine Bowles, frontmen for American austerity.
If sequestration is not averted by the end of the month, America will experience an arbitrary austerity agenda that shifts burdens from the wealthy onto working families. It makes across-the-board cuts to vital services. As President Obama noted Tuesday, sequestration would impose “automatic brutal spending cuts” to job creation, infrastructure and education initiatives. It would, as well, slash funding for air traffic control, federal prosecutions and Federal Emergency Management Agency grants that make it possible for states and local governments to hire needed firefighter and emergency personnel.
Even the parts of the sequester that are appealing—squeezing the bloated Department of Defense budget—will tend to harm low-wage federal employees rather than billionaire defense contractors.
Most troublingly, sequestration will slow, and perhaps stall, the economic recovery. “This is not an abstraction,” says President Obama. “People will lose their jobs.”
By any measure, the sequester is austerity.
The former Republican senator and defeated Democratic senate candidate who praises Paul Ryan’s budget don’t particularly like the death-by-slow-cuts of sequestration. They prefer a full frontal assault on the most vulnerable Americans and a redistribution of the wealth upward.
As President Obama has noted, Washington has already reduced the deficit by $2.5 trillion.
But the co-chairs of the failed National Commission on Fiscal Responsibility and Reform now want another $2.4 trillion.
To wit, in a “rehashed” plan to “Fix the Debt,” Simpson and Bowles are busy promoting schemes to “modernize…entitlement programs to account for” an aging population. That’s code for schemes to delay the point at which the hardest working Americans can get access to Social Security and Medicare.
Simpson and Bowles are arguing specifically for the adoption of “chained CPI.” That’s the assault on Social Security cost-of-living increases that Congressman Keith Ellison, D-Minnesota, correctly identifies as “a benefit cut.”
“It’s a bad idea and it’s a stealth way to give people less,” Ellison explained in a recent interview. “It is a benefit cut—and here’s the real problem with it being a benefit cut: It would be absolutely horrible if it were a benefit cut but the cut was designed to extend the life of Social Security and to make the program more solvent. But that’s not why they’re doing it. They’re doing it so that they can preserve somebody else to have a tax cut and to not raise taxes on the top 2 percent.”
Ellison is right. As is invariably the case with austerity schemes, Simpson and Bowles—and the billionaire-funded “Fix the Debt” group they head—are proposing cuts to the top marginal tax rate for wealthy individuals and corporations.
The United States can and should address debts and deficits. And there are sound plans to do so, including the “Balancing Act” advanced by Ellison and other members of the Congressional Progressive Caucus. That initiative rejects austerity and proposes a growth agenda based on tax fairness and investments in education and job creation.
That’s not Simpson-Bowles, which Nobel Prize–winning economist Paul Krugman dismisses as “terrible” economics. That’s responsible policy that avoids the “brutal cuts” of sequestration and the even more brutal cuts of full-fledged austerity.
“Almost $2 trillion has been cut over the past two years from teachers, firefighters, police officers, loans for college students, and infrastructure investments,” the congressman says of the warped federal budget priorities proposed by austerity advocates. “The American people shouldn’t continue to pay the price for massive tax breaks for millionaires and billions of dollars in subsidies to oil companies.”
Meanwhile, Greg Kaufmann writes, the Temporary Assistance for Needy Families program, or TANF, languishes.
Debbie Halvorson chats it up at a farmer's market in Bloomington, Illinois. (Flickr/Gemma Billings)
Chicago—Most countries take special elections to fill vacant seats in their national legislative chambers far more seriously than does the United States.
In Britain, in particular, off-the-clock “by-elections” are recognized as testing grounds not just for candidates and parties but for issues. They are thoroughly covered by the media and often treated as mini-referendums that can send powerful signals regarding hot-button policy debates.
American media outlets and pundits are less inclined toward that sort of analysis. But a crucial Democratic primary to fill a vacant Illinois US House seat is shaping up as test that could well meet the “by-election” standard when it comes to providing an indication of popular sentiment. This race will test the question of whether ties to the National Rifle Association have become politically toxic among Democrats. Of course, it is not the only test, or even the perfect one, as this is an predominantly urban and close-in surburban district. Many of the Democrats who have NRA ties—or who try to walk a middle line with regard to its demands—represent districts and states that are more rural and have strong hunting traditions. But the dynamics in this race, and the moment at which it is playing out, have the potential to send a message of consequence.
Timing is everything when it comes to the question of whether a special election serves as a mini-referendum, as Republicans learned when they lost a historically Republican seat in upstate New York during the 2011 debate over Congressional Budget Committee chairman Paul Ryan’s schemes to assault Social Security, Medicare and Medicaid.
And the timing of this primary contest makes it a big deal, as there are still many Democrats who, even after the horrific Newtown slayings of December and the January killing of Chicago high school student Hadiya Pendleton just days after she performed at President Obama’s second inaugural, seek to play the margins on the gun debate.
Illinois’s 2nd congressional district, which takes in Chicago’s southeast side and the city’s south suburbs, will fill the seat vacated by the resignation of Congressman Jesse Jackson, Jr. The district is overwhelmingly Democratic. A majority of the voters are African-American, as are most of the seventeen candidates competing in the Democratic primary to replace Jackson. But one of the leading contenders, former Congresswoman Debbie Halvorson, is a white Democrat who represented a nearby district before losing to a Tea Party Republican in 2012.
In the 2012 Democratic primary, Halvorson challenged Jackson but won only 29 percent of the vote. At least one January poll suggested she was attracting about the same level of support this year. However, as a former congresswoman running in a crowded Democratic field, she is seen as a serious contender.
This is where the “by-election” measure comes in.
Halvorson has a history of working closely with the National Rifle Association, and received NRA endorsements in her 2008 and 2010 races, winning special praise for her vote to allow concealed weapons in national parks. In this race, Halvorson has tried to distance herself from the NRA, yet she continues to oppose many gun-control proposals, including an assault weapons ban.
One of Halvorson’s opponents, former state representative and current Cook County (Chicago) Chief Administrative Officer Robin Kelly, has done everything in her power to make the election a referendum on the gun issue.
Kelly’s media campaign is all about the issue, which is a critical one in a district that has mourned many of the deaths that have made the Chicago area a focus of debates about how to address America’s staggering rate of firearms deaths.
“Help me fight gun violence,” declares Kelly, who is running on “Robin’s Pledge,” a five-point commitment to:
1. Pass a comprehensive ban on assault weapons.
2. Eliminate the gun show loophole.
3. Never receive support from groups that oppose reasonable gun safety legislation.
4. Ban high capacity ammunition magazines.
5. Support laws that prohibit conceal and carry permits.
Kelly is no newcomer to the issue. A decade ago, as a newly elected Illinois legislator, she sponsored legislation to reduce gun violence by banning straw purchases of firearms. It was co-sponsored by then–Illinois State Senator Barack Obama.
Obama, who made the gun issue central to his 2013 State of the Union Address and to a recent visit to Chicago, is not backing anyone in the Illinois special election. But a number of top Democrats, including Illinois Congresswoman Jan Schakowsky and Congressmen Bobby Rush and Danny Davis, have taken the rare step of entering the race to back Kelly. So, too, has New York Mayor Mike Bloomberg’s Independence PAC, which has spent more than $1.3 million on ads that blister Halvorson for her past ties to the NRA and that highlight Kelly’s candidacy. A Kelly win will provide more evidence that Bloomberg's willingness to move money into races around the country, including Democratic primaries, is redefining the gun debate as it plays out in electoral politics.
There are other credible candidates in the race, including Chicago Alderman Anthony Beale. But on Sunday, a top contender who had attracted significant labor backing, State Senator Toi Hutchinson, quit the contest and endorsed Kelly.
“I am simply unwilling to risk playing a role going forward that could result in dividing our community at time when we need unity more than ever,” said Hutchinson, a former aide to Halvorson. “In the wake of horrendous gun related crimes all across our country, I agree with Robin that we need to stand together to fight gun violence, but Debbie Halvorson been wrong headed in her refusal to moderate her views on banning dangerous assault weapons.”
No crowded election contest can ever be a pure referendum on a particular issue, especially in a diverse district that faces many challenges. But if Kelly prevails, the result will send a strong signal regarding the ongoing emotional and political power of the gun issue and the extent to which an NRA tie can become a primary problem for Democrats—and some Republicans—who align with the group.
As Sam Kleiner writes, the NRA has reversed its stance on states’ rights.f
Harry Reid. (AP Photo)
Senate Majority Leader Harry Reid on Thursday was shocked to learn that there was filibustering going on in the Senate.
“It is shocking that our Republicans colleagues would leave our nation without a secretary of defense with all the things going on and when we’re in a war,” Reid said after Senate Republicans voted against confirming former Republican Chuck Hagel as the new head of the Pentagon.
It was “shocking”—if we use the definition of the word as “troubling” or “unsettling”—that fifty-eight senators (the members of the Democratic caucus and four Republicans: Senators Thad Cochran of Mississippi, Susan Collins of Maine, Mike Johanns of Nebraska and Lisa Murkowski of Alaska) out of 100 wanted a vote but could not get it.
But it was not “shocking”—if we use the definition of the word as “surprising” or “unexpected”—that a Republican minority was again obstructing action in the Senate.
Seriously! What did Harry Reid think was going to happen when he rejected the calls of Senators Jeff Merkley, D-Oregon, and Tom Udall, D-New Mexico, for filibuster reform?
What Merkley, Udall and a number of other senators have been proposing for several years now is the restoration of the tradition filibuster where, as in Mr. Smith Goes to Washington, a dissenting senator must hold the floor and make the case—the very long case, at least in some instances—against a nomination or a bill.
Reid rejected their arguments at the start of the last Congress, and then admitted that he was unwise in doing so. After Senate Republicans blocked a simple reauthorization of the Export-Import Bank, a frustrated majority leader went to the floor of the Senate and declared: “If there were ever a time when Tom Udall and Jeff Merkley were prophetic, it’s tonight,” Reid said on the floor. “These two young, fine senators said it was time to change the rules of the Senate, and we didn’t. They were right. The rest of us were wrong—or most of us, anyway. What a shame.”
“Fool me once…shame on you.”
But Reid fumbled filibuster reform again last month, at the start of the new Congress, reaching another gentleman’s agreement to make minor tinkers around the edges of the process—rather than adopt the meaningful reforms proposed by Merkley, Udall, Iowa Senator Tom Harkin, Massachusetts Senator Elizabeth Warren and a rapidly growing caucus within his caucus.
Now, Reid is frustrated again. He could have implemented filibuster reform with a simple majority in January—as the Senate is allowed to make changes in how it operates at the start of each new Congress. Now, he needs sixty-seven votes, and he won’t get them. So he’s stuck, as is the Senate, as is the republic that voted in November to end the dysfunction in Washington.
“Fool me twice, shame on me.”
Read George Zornick’s primer on Reid and Hagel.
President Obama was right in his State of the Union Address to declare that “we can’t just cut our way to prosperity.”
Now it is time to act on that understanding that the austerity agenda being promoted by Congressional Budget Committee chairman Paul Ryan and his “Fix the Debt” allies poses a fundamental threat not just to Social Security, Medicare and Medicaid but to essential services that are necessary to economic renewal.
And there is no better place to begin than with a rejection of the plan to dramatically downsize the US Postal Service by curtailing Saturday mail delivery.
Too much of the media coverage of the postmaster general’s announcement that Saturday service will end in August accepted the fantasy that there is no alternative to postal austerity.
There is an alternative.
Congress has the authority—outlined in the Constitution, no less—to preserve Saturday mail delivery and to create a stronger, better Post Office that will maintain vital services in rural communities and central cities across this country.
There is no question that the Postal Service faces financial challenges that threaten its future.
But Congress created most of the problems. And it can fix them.
“While we all understand that the Postal Service is experiencing financial problems today and that changes need to be made as the Postal Service adjusts to a digital world, these issues can be dealt with in a way which strengthens the Postal Service rather than initiating a series of cuts that could eventually lead to a death spiral,” says Senator Bernie Sanders (I-VT).
With Congressman Peter DeFazio (D-OR), Sanders has introduced legislation that will save Saturday service and renew overnight delivery standards while giving the Postal Service a new lease on life.
They do this by coupling a modernization plan with the repeal of the congressional mandate that has caused most of the fiscal woes now facing the USPS.
Sanders and DeFazio correctly note that “the most critical financial reform” for the postal service’s future is their proposal to “rescind an onerous 2006 law pushed through a Republican-controlled House at the behest of President George W. Bush. Unlike any private business or other government agency, the law makes the post office pre-fund seventy-five years of future healthcare benefits for retirees over the course of 10 years. The $5 billion annual payments have been piling up in a fund that experts say already has more than enough in reserve. Since 2007, the pre-funding mandate is responsible for $4 out of every $5 in Postal Service debts.”
“Most of the financial issues facing the United States Postal Service are due to short-sighted actions by Congress,” says DeFazio. “Congress must unshackle USPS so we can deal with these problems and allow the Postal Service to better compete.”
Rescinding the 2006 law that required the prefunding of benefits will return a measure of financial stability to the USPS. But removing barriers to the Postal Service’s ability to compete is the key to its future.
Sanders and DeFazio would allow the Postal Service to seek new sources of revenue by: (1) lifting legal bans on services such as notarizing documents, issuing hunting and fishing licenses and allowing shipments of wine and beer; (2) clearing the way for the Postal Service to help customers take advantage of e-mail and Internet service; and (3) establishing a commission—composed of business specialists and representatives from small business and labor—to make recommendations regarding strategies for the Postal Service to utilize its infrastructure to compete.
Among the prospects that have been proposed by postal workers and their allies are the restoration of postal banking, which would allow Americans to establish savings accounts at local post offices—as they do in the successful postal banks of other countries (such as Japan) and as was done in the United States until the 1960s. There are also proposals for making post offices hubs for helping Americans—especially those living in rural areas—access federal, state and local public services.
Additionally, the Postal Service can and should be in the forefront of working with state and local election officials to expand postal voting and absentee-ballot programs.
The point of the process is to build on the strengths of a postal infrastructure that is immensely valuable, and that has immense potential to sustain and enhance communities across the United States.
The Sanders-DeFazio plan, which has already attracted substantial support in the Senate and House, rejects the austerity lie that would make keep making cuts until the Postal Service is so weakened that Americans will give up on it—and privatization will become inevitable.
And it begins in the right place: with immediate action to block the deepest cut of eliminating weekend service.
“Providing fewer services and less quality will cause more customers to seek other options,” says Sanders. “Rural Americans, businesses, senior citizens and veterans will be hurt the most by ending Saturday mail.”
President Obama's 2013 State of the Union address. (AP Photo/Charles Dharapak)
For those who doubted that Barack Obama would maintain his commitment to a gun-safety agenda that challenges the supposed political power of the National Rifle Association, and the political caution of Democrats who more than a decade ago decided for the most cynical of reasons to abandon the struggle to address gun violence, the president’s fourth State of the Union address provided the answer.
Obama’s speech delivered a bold economic message—a rejection of the austerity threat posed by Paul Ryan and the Republican right in favor of a job-creation agenda—and it renewed the liberal promises of his recent inaugural address: fair pay for women, fair treatment for lesbians and gays, immigration reform, a return to seriousness with regard to climate change. The president was still too supportive of free-trade fantasies and he made an unsettling, if ill-defined, bow to the wrongheaded approaches of the Simpson-Bowles commission. Yet, his speech was aggressively progressive on a host of issues, calling for a hike in the minimum wage to $9 an hour, for real investments “in high-quality early education” and for a renewal of America’s commitment to voting rights.
That would have been enough in most years.
But this year’s State of the Union Address—coming just two months after the nation was shaken by the gun massacre at a Newtown, Connecticut, elementary school—demanded more.
And the president recognized that demand.
The emotional highpoint of his address to a joint session of Congress came late in the speech, when Obama pivoted from a review of his global vision—bringing troops home from Afghanistan, reducing nuclear arsenals, a genuine embrace of diplomacy—toward domestic affairs. And toward the most human, the most genuinely and understandably emotional of concerns.
“Of course, what I’ve said tonight matters little if we don’t come together to protect our most precious resource—our children,” Obama began.
“It has been two months since Newtown. I know this is not the first time this country has debated how to reduce gun violence. But this time is different. Overwhelming majorities of Americans—Americans who believe in the Second Amendment—have come together around commonsense reform, like background checks that will make it harder for criminals to get their hands on a gun. Senators of both parties are working together on tough new laws to prevent anyone from buying guns for resale to criminals. Police chiefs are asking our help to get weapons of war and massive ammunition magazines off our streets, because they are tired of being outgunned.”
Then the president went deeper. He went beyond the policy provisions that are to be expected in State of the Union addresses to a specific, and pointed, demand.
“Each of these proposals deserves a vote in Congress,” said the president in remarks that were directed two men seated within feet of him: House Speaker John Boehner (R-OH) and Senate Minority Leader Mitch McConnell (R-KY).
Addressing the crisis of obstruction, which has stalled action on so many fundamental challenges, the president said: “If you want to vote no, that’s your choice. But these proposals deserve a vote. Because in the two months since Newtown, more than a thousand birthdays, graduations and anniversaries have been stolen from our lives by a bullet from a gun.”
Then the president struck the most poignant and powerful note of the night.
“One of those we lost was a young girl named Hadiya Pendleton. She was 15 years old. She loved Fig Newtons and lip gloss. She was a majorette. She was so good to her friends, they all thought they were her best friend. Just three weeks ago, she was here, in Washington, with her classmates, performing for her country at my inauguration. And a week later, she was shot and killed in a Chicago park after school, just a mile away from my house,” the president announced with his voice rising as he declared:
Hadiya’s parents, Nate and Cleo, are in this chamber tonight, along with more than two dozen Americans whose lives have been torn apart by gun violence. They deserve a vote.
Gabby Giffords deserves a vote.
The families of Newtown deserve a vote.
The families of Aurora deserve a vote.
The families of Oak Creek, and Tucson, and Blacksburg, and the countless other communities ripped open by gun violence—they deserve a simple vote.
Our actions will not prevent every senseless act of violence in this country. Indeed, no laws, no initiatives, no administrative acts will perfectly solve all the challenges I’ve outlined tonight. But we were never sent here to be perfect. We were sent here to make what difference we can, to secure this nation, expand opportunity, and uphold our ideals through the hard, often frustrating, but absolutely necessary work of self-government.
That reference to “the work of self-government” might have been lost in the moment, as thunderous applause shook the chamber to which more than thirty members of Congress had invited constituents who have been affected by gun violence. But it will not be lost on Americans whose attention has been refocused by their president on the gun-safety debate.
Obama’s determination to devote so substantial a portion of his State of the Union Address to the gun debate that is still in formation, and his willingness to make specific and repeated demands for House and Senate votes, provided another indication that he will not let this issue go. He will press Congress to act, as he must. After decades of neglect, not just by NRA-tied Republicans but by Democrats who were willing to put political expediency ahead of principle, Barack Obama engaged in the work of self-government. And he reminded Americans that their Congress has a responsibility to do the same.
Where are the student voices in the gun control debate? Read more at TheNation.com's StudentNation blog.