Photo Credit: Shutterstock.com/donskarpo
January 14, 2014
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Are Republicans inconsistent when they sometimes support using
offsets and indexing and sometimes don’t? Not at all. They’re actually
very consistent. When capital comes asking for gifts Republicans act
like Santa Claus. When labor is the supplicant they conduct themselves
more like Scrooge.
Consider the Republicans’ different approach to the estate tax, the minimum wage and jobless benefits.
When
George Bush came to office the federal government taxed the value of
estates over $675,000. Congress immediately raised the exemption to $1
million and in 2009 to $3.5 million. In 2010 Congress boosted it again
to $5 million and in 2012 indexed the exemption to inflation. This year
an individual will pay taxes only for the value of an estate over $5.25
million. A couple will receive an exemption of $10.5 million.
In
sum, over 13 years Congress increased the estate tax exemption almost
800 percent and then indexed it to inflation. During that time the cost
of living rose by 32 percent.
From 1997 to 2007 Congress refused
to raise the minimum wage a penny. Then in 2007 it reluctantly raised it
by $2.10 over three years. Since 2009 Congress has again refused to
revisit the issue. Today and for the foreseeable future any proposal to
index the federal minimum wage is dead on arrival.
In sum, over 16
years full time workers earning the federal minimum wage have seen
their income rise by 40 percent, to $15,000. During that time the cost
of living rose by 45 percent.
Ten states do automatically increase
the minimum wage to keep pace with inflation. But last year Congress
all but erased the impact of those increases when it refused to extend
the two percent payroll tax reduction. The increased dollars subtracted
from workers paychecks almost completely offset the dollars added to
paychecks from the indexing of the minimum.
Congress takes the
same mean spirited and miserly approach to the long term unemployed. In
2009, as part of its stimulus package, Congress extended jobless
benefits to as much as 99 weeks. In 2012 it slashed the maximum to 73
weeks and for all but a dozen of the highest unemployment states, to 63
weeks. This was done even though unemployment remained at the highest
levels in a generation and about 43 percent of the nearly 13 million
unemployed were out of work for more than six months, double the rate of
any other economic downturn since the Great Depression.
The average unemployment benefit is $300 per week.
In
2014 Republicans insist they won’t support an extension of jobless
benefits without comparable reductions in spending. GOP leader Mitch
McConnell (R-KY)
insists,
“There is no excuse to pass unemployment insurance legislation —
without also trying to find the money to pay for it so we’re not adding
to a completely unsustainable debt.”
Republicans do not apply the
offset principle to deficits created by reducing taxes. “You do need to
offset the cost of increased spending and that’s what Republicans object
to”,
asserts
Senator Minority Whip Jon Kyl (R-AR). “But you should never have to
offset cost of a deliberate decision to reduce tax rates on Americans.”
At
the end of 2012 corporate tax breaks that cost the Treasury upwards of
$50 billion a year expired. Congress is expected, as it has done many
times in the past, to extend the tax breaks and to do so retroactively.
No one is talking about the need for offsets.
But
even here Republicans demonstrate their consistency. At the end of 2011
the payroll tax reduction expired. Republicans flatly refused to extend
it through 2012 without offsetting the loss of revenue. After a
protracted battle they reluctantly abandoned their principled effort. As
Brian Beutler
wrote
in TPM the “development represents a dramatic reversal for GOP leaders,
who nearly allowed the payroll tax cut to lapse in December in part
because of their insistence that the package be financially offset.”
No
principle is involved here unless the eagerness to engage in class
warfare is a principle. Support for the working class must be offset
because it increases the deficit but tax cuts for billionaires, which
increase the deficit just as much if not more, do not. The minimum wage
should be raised at most every decade and god forbid it should rise
automatically with inflation but the estate tax exemption should be
raised every year and indexed.
David Morris is co-founder
of the Institute for Local Self-Reliance and directs its initiative on
The Public Good. He is the author of "
New City States"
and four other non-fiction books. His essays on public policy are
regularly published by On the Commons, AlterNet, Common Dreams and the
Huffington Post.
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