Posts tagged earmarks

Fiscal Cliff: Middle Class Free Fall, Corporations’ Golden Parachute




Posted Jan 4, 2013

Fiscal Cliff: Middle Class Free Fall, Corporations’ Golden Parachute

Credit: Peter Patau

It seems like everyone who is paying attention to the fiscal cliff debate has an opinion one way or another about the benefits and disadvantages of the Tuesday night passage of the Senate Bill. The compromise that was agreed upon can be described as a barrel filled with pork for both Democrats and Republicans and their corporate sponsors, being that earmarks and tax breaks for corporations are included amongst the illusion of fiscal relief for the middle and lower classes.

Democrats and Republicans and their corporate sponsors, being that earmarks and tax breaks for corporations are included

Credit: Gilbert Mercier

For the left, the tax increases on the super-rich, who make up approximately 0.9 percent of the American population (those individuals earning more than $400,000 or $450,000 per household), was a victory but still managed to fall short of the Obama campaign promise of raising taxes on the top two percent (individuals earning more than $200,000 or $250,000 per household). For the right, the numbers must have added up, seeing as quite a few house Republicans voted in line with the Democrats. This tax increase on rich folks from 35 percent to 39.6 percent will create about $600 billion in revenue over the course of ten years, but with congress’ track record being as shoddy as it is, who knows what programs or misuse it will go to, you know: like the TARP (Troubled Assets Relief Program), where taxpayer money went directly to the banks and CEOs but not to the millions of underwater homeowners that it was designed to assist to avoid foreclosure. But don’t worry, this money will surely not go towards paying down our world-record national debt of $16.4 trillions that was not even addressed by the bill. Economists have predicted that all the expenditure this bill allows will raise the national debt to $20 trillion during the next ten years.

Let us take a look at what else this bill will do to the economy and the American people. For starters, the bill extends for another year Goldman Sachs and Bank of America’s tax break by moving their headquarters to the “Liberty Zone”, a post 9/11 area where the World Trade centers once stood. This tax provision was created to help revitalize Lower Manhattan’s small businesses but instead helped out these two mega-bailed-out banks and helped to subsidize the construction of luxury apartments. Goldman Sachs alone was reported to have received $1.6 billion in tax free financing of its new building.

The Extension of the Active Financing Exception of Sub-part F is a very fancily-worded trade tax loophole; it extends a bill created in 1997 that allows American companies to avoid paying taxes on income from certain transactions called “active financing.” This loophole, a credit of up to $9 billion, basically encourages American companies to move overseas and thus outsource employment from Americans. One of the biggest corporations to abuse this loophole is General Electric (GE).

Goldman Sachs alone was reported to have received $1.6 billion in tax free financing of its new building.

Credit: Peter Patau




Photographs one and three by Peter Patau. Photograph two by Gilbert Mercier.

Santorum’s Anti-Libertarianism is a Recipe for Big Government



Writes Philip Klein at The Washington Examiner:

Nobody expects the Republican presidential nominee to be a libertarian purist, but it helps if he or she at least has a libertarian streak. In Rick Santorum’s case, he’s actively hostile toward libertarianism…

(Santorum’s) been coming under fire for his many votes to expand government. He took earmarks, voted for the Medicare prescription drug plan and backed No Child Left Behind. He pushed dairy subsidies, steel tariffs and sided with unions over workers.

As Cato’s Gene Healy noted in his Washington Examiner column on the topic this week, Santorum explicitly declared, “I am not a libertarian, and I fight very strongly against libertarian influence within the Republican Party and the conservative movement.”

This is a stark departure from Ronald Reagan, who had this to say to the libertarian Reason magazine in a 1975 interview:

If you analyze it I believe the very heart and soul of conservatism is libertarianism… The basis of conservatism is a desire for less government interference or less centralized authority or more individual freedom and this is a pretty general description also of what libertarianism is.

Ever since that time, Republicans have gotten into trouble when they have veered too far from libertarianism. If Santorum had a modicum of respect for libertarian philosophy, he would have been reluctant to embrace big government Republicanism during the Bush era. Instead, he cast votes that will make it harder for him to consolidate conservative support in the weeks and months ahead as his record undergoes more scrutiny…


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Final Episode of Freedom Watch


Final Episode of Freedom Watch: When the Government Fears the People, There Is Liberty

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Santorum touts his true conservatism, but …



(Charlie Neibergall, File/Associated Press)

Santorum opposes abortion rights and favors a constitutional ban on same-sex marriage. He takes a hawkish line on foreign policy, saying he would bomb Iran’s nuclear facilities unless they were opened for international arms inspectors.

“I’ve voted toughly over the years to cut spending and to rein in entitlements,” he said recently.

Not always. Santorum, who rose to the No. 3 GOP leadership post in the Senate, supported the sweeping No Child Left Behind education reform bill that conservatives complain gave too much control to the federal government. He has said he regrets his vote.

In 2003, Santorum was a leading advocate for extending Medicare prescription drug benefits to seniors, a measure that conservative critics branded as a massive entitlement expansion that would run up the federal budget deficit by hundreds of billions of dollars. He now says the vote was a mistake.

Santorum also voted for a massive highway bill in 2005 that was stuffed with earmarks, including the infamous “Bridge to Nowhere” in Alaska.

He fought food stamp cuts in 2005 and has pushed hard to get more federal money for Amtrak and the Low Income Home Energy Assistance Program, which provides fuel aid to the poor. Both are programs popular in Pennsylvania but considered by many conservatives to be examples of a bloated federal government.

Santorum worked to extend subsidies in 2005 for Pennsylvania’s dairy farms. The $1 billion, two-year national program paid dairy farmers when milk prices dropped.

In 2002, Santorum went to bat for retired steelworkers. He pushed a plan to use some revenues from a Bush administration proposal to drill for oil in the Arctic National Wildlife Refuge in Alaska to pay some health and pension costs of about 600,000 retirees from bankrupt steel companies, a key constituency in Pennsylvania.

Santorum has already come under fire from his GOP rivals for his heavy use of earmarks, which are a favorite target for tea party activists who see them as wasteful.


Four Reasons Why Conservatives Should Think Twice About Gingrich



With the New Hampshire Union Leader’s endorsement of Newt Gingrich as well as Gingrich’s rise in the polls, the former speaker has the momentum in the race for the White House, but is this a good thing?

Speaker Gingrich has many commendable points. He’s skilled at crafting conservative policy proposals and he is an accomplished debater and proponent of conservative ideas. Gingrich also deserves credit for working with President Clinton to pass welfare reform, and some credit for the balanced budgets that existed prior to 9/11. Conservatives remember Gingrich fondly for leading the GOP to victory with the Contract with America.

However, things did not go so well once Gingrich was in office. His troubled tenure from 1995-99 (which he at one point compared to being prime minister) as well as his post-speakership career raise several red flags that conservatives would be wise to consider:

1)  Big Spending and Earmarks:

While Gingrich was speaker, Congress and the president balanced the budget. This did not come about through hard choices, but rather through a booming economy. As the information age dawned and the dotcom boom began, government coffers surged with revenues.

As part of the balanced budget agreement, Congress put in place spending caps. With the surge of revenue, Gingrich and Senate Majority Leader Trent Lott decided to break the spending caps that had been put in place in the balanced budget agreement and increased federal spending. This practice was continued under Gingrich’s successor, Dennis Hastert. The predictable result of the Republican Congress’ profligacy on spending was that once the dotcom bubble burst and economic growth slowed, the only way that Congress could afford to continue the increases they’d made in the good years of the economy was to run up deficits.

Gingrich’s speakership  was dealt a telling blow as a result of his ineptness in negotiating the FY1999 budget which was passed a month before the 1998 elections and increased spending without delivering any major tax reductions. Then-Rep. Mike Castle (R-DE) said voters complained to him that nobody read the bill and “the president (Clinton) got virtually everything he wanted.”

One part of Gingrich’s legacy that remained long after he left was the expanded role of earmarks in congressional politics. Gingrich doubled the number of earmarks in Congress and his office sent out memos encouraging the use of earmarks for protecting vulnerable members of Congress. The number of earmarks would eventually increase to 14,000 per year and would lead to the end of the Republican majority. While the greatest excesses did not occur during Gingrich’s speakership, the first steps toward the Republican train wreck of 2006 were taken during Gingrich’s tenure.

2) Dysfunctional Leadership and Failed Communicator:

If conservatives want lasting victories, they need to survive politically and communicate to the public well. During the government shutdown in 1995-96, Gingrich and the House Republicans failed to formulate an effective response to the Democratic message. Gingrich’s inexplicable statement that President Clinton failed to give him proper seating on Air Force One to a state funeral for Yitzhak Rabin only made the problems worse. Gingrich’s approval rating shrunk to a toxic 20% in the polls as a result of this failure.

Gingrich’s speakership led to a historic lack of confidence from Republican leaders and the rank and file. In 1997, nine Republican members of the House refused to support Gingrich’s re-election to the speakership and the GOP leadership rallied barely enough votes to keep Gingrich in office. In July of that year, Gingrich faced a coup from his top lieutenants that collapsed due to incompetence. After the 1998 elections, Gingrich was forced to step aside.

3) Washington Insider:

Gingrich does not shy away from being a Washington insider. He responded to criticism of his work for Freddie Mac and the Washington insider label by stating that we need to elect someone who knows how Washington works in order to change Washington.

Conservatives have reason to be wary of this idea for a number of reasons, not the least of which is Gingrich’s flawed record as speaker, suggesting that his success at changing Washington has been slipshod at best, and that his career tendency has been to go along rather than address tough issues when called for.

In an October debate, while Gingrich lauded Herman Cain for proposing his 9-9-9 tax plan, Gingrich cautioned, “Change on this scale takes years to think through if you’re going to do it right.” It’s worth noting that sixteen years ago, Gingrich appointed Cain to Jack Kemp’s tax commission and since then several other tax reform commissions have been appointed. How many more years do we need to “think through” tax reform until we actually do something significant? It is standard Washington tactics to kick big issues down the road for others to deal with, and Gingrich is too big a part of that system to change it.

4) Betraying Conservatives on Key Issues:

Newt Gingrich threw himself into backing liberal Republican Dede Scozzafava while conservatives and tea party groups were rallying around Conservative Doug Hoffman. Gingrich scolded conservative activists for backing Hoffman. Hoffman, for his part, is forgiving of the whole thing and urges Republicans not to hold Gingrich’s action against him. While this is kind of Mr. Hoffman, conservatives would do well to ignore the advice because Gingrich’s belligerent defense of Scozzafava is part of a larger pattern of key betrayals of conservative interests.

While Gingrich was speaker, he and the NRCC were notorious for backing liberal Republicans over conservatives. For example, in 1997, Gingrich recruited liberal state Assemblyman Brook Firestone and supported him over conservative Tom Bordonaro in a special congressional election. Primary voters in the district rejected Firestone as well as Gingrich and company’s attempts to play kingmaker.

In addition to endorsements for liberal Republicans, Gingrich has been more than willing to endorse liberal causes. Among examples of this are the famous ad of him sitting on a couch with Nancy Pelosi calling for government action to address climate change and his letter in support of Bush’s immigration reform, which many conservatives labeled amnesty. When Gingrich opposes conservatives, he tends to do it in a very dramatic way that’s very belligerent to conservatives who disagree with him.

Conservatives betting on Gingrich have to hope that something has changed Gingrich over the past thirteen years that will transform him into someone who can not only talk about conservative ideas, but can implement conservative solutions. Given the totality of the Gingrich record, this is a bad bet.

Adam Graham is a contributor at and host of the Truth and Hope Report podcast. His personal site is Adam’s Blog. He is author of novel, “Tales of the Dim Knight,” from Splashdown Books.
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