Friday, December 30, 2011

Romney Worships 2011's False Idol: Paul Ryan by John Nichols / The Nation / Common Dreams

Romney Worships 2011's False Idol: Paul Ryan

by John Nichols
Paul Ryan’s ideas reached their sell-by date in 2011, as tens of millions of Americans recognized that his proposals would permanently damage and ultimate destroy Social Security, Medicare and Medicaid.
 The centerpiece of Mitt Romney’s advertising in Iowa (and New Hampshire) is an attempt to associate the candidate’s economic agenda with House Budget Committee chairman Paul Ryan’s “Roadmap for America’s Future.” (AP Photos) But as the year came to a close and his rancid schemes were starting to putrefy, Ryan suddenly found a new buyer: Mitt Romney.
The Republican presidential contender is so desperate to sell himself as the “conservative leader” he never was that Romney’s “closing argument” appeal to Iowa caucus goers features quotes from columnist Ann Coulter.
Those Romney radio ads, which are more ubiquitous in Iowa than Geico gecko insurance commercials, tout the former governor of Massachusetts as a “conservative businessman” with a “conservative plan.” They compare him with Ronald Reagan. They feature Coulter quotes.
But the centerpiece of Romney’s advertising in Iowa (and New Hampshire) is an attempt to associate the candidate’s economic agenda with House Budget Committee chairman Ryan’s “Roadmap for America’s Future.”
Never mind that Ryan has scrupulously avoided endorsing Romney, or any other GOP contender. Never mind that there are still some Republican insiders who would like to see Ryan enter the presidential contest.
Romney’s claiming Ryan stamp of approval.
“Congressman Paul Ryan praised Romney’s plan, saying: ‘This is getting us toward a prosperity agenda that will allow the private-sector to grow,’ ” declares the the Romney pitch to Iowans.
That’s no casual reference to Ryan.
Romney, who once resisted endorsing Ryan’s plan, has for several weeks now been using the Wisconsin congressman as a lifesaver to prevent his campaign from been swept away by a conservative wave.
One of the first salvos in Romney’s attack on former House Speaker Newt Gingrich was a television ad that attacked Gingrich for briefly rejecting Ryan’s plan as “right-wing social engineering.”
The ad closes with Ryan discussing Gingrich’s criticism, telling right-wing radio host Laura Ingraham: “With allies like that, who needs the left?”
“As political attack ads go, [Romney’s] ‘With Friends Like Newt’ ad is about as nasty as it gets on the Republican side,” observes the Mediaite website. “To the outsider, it might not seem that way (normal people hated Ryan’s budget, too), but the level of worship heaped on the Ryan budget by conservatives has that plan replacing the gift of frankincense in holiday manger scenes across the country. Romney’s campaign pounds Gingrich for the full minute on his comments about the Ryan plan, complete with sinister music and grainy monochrome visuals. By the end, you fully expect Gingrich’s eyes to begin to glow Demon-sheep red.”
Romney’s Ryan reverence may score him points with Republican caucus-goers in Iowa. And if it does, that’s a reminder that Ryan’s hustle is still working in at least some quarters. And make no mistake, Paul Ryan is a hustler. The Republican congressman from Wisconsin has gotten very good at fooling political and media elites into thinking that his schemes to steer federal money into the accounts of Wall Street speculators (by taking steps to privatize Social Security) and for-profit insurance companies (by turning Medicare and Medicaid into voucher programs) would balance budgets or in some other way improve the circumstances of working families.
But even if Ryan referencing gets Romney through the Iowa thicket, tying his star to the Budget Committee chairman won’t help Romney with the great mass of Americans.
In fact, to the extent that Ryan’s machinations were exposed by responsible media in 2011, they were rejected by the voters.
Among the worst setbacks suffered by Ryan’s Republicans last year was the defeat of the party’s nominee in a spring election for a historically Republican seat representing upstate New York. Democrat Kathy Hochul won by ignoring her GOP opponent and running against Ryan’s plan to enrich Wall Street at the expense of the elderly.
The bad news from Buffalo scared Ryan. And rightly so.
If the congressman’s determination to raid the federal treasury in order to enrich his campaign donors becomes more well known in 2012, it will be more widely rejected.
Even Ryan, who has been easily re-elected in every election since 2000, could be vulnerable—indeed, new polling suggests his approval ratings are trending downward in his southeastern Wisconsin district, where the Budget Committee chairman has been confronted by angry crowds at town hall meetings.
That’s a big problem for Ryan. And it explains why he has begun hustling to get the sort of favorable publicity that would allow him to remain a darling of the DC establishment and one of the most successful fundraisers on Capitol Hill.
Ryan is not stupid. He has to recognize that his plans are fundamentally flawed—that they would cost taxpayers more money while providing less security and care for the nation’s elderly, disabled and orphaned. But he also knows that he will continue to be a favorite candidate of hedge-fund managers, banksters and CEOs if he keeps pushing privatization and voucherization schemes.
Thus, approving media reports and profiles have become essential to his political and personal success.
So it was that Ryan used his political action committee to launch a campaign this month to game a PolitiFact poll regarding the “lie of the year.” Ryan and his political team understood that a campaign to “ensure the Democrats’ lies about the Path to Prosperity are exposed” would create pressure on media types to suggest his budget proposals had been unfairly maligned. Even by the low standards that apply to Ryan, that was a pretty pathetic move. He got his PolitiFact headline but it was not based on a serious contention with criticisms of his plan; rather, he scored on the technicality that some critics said he wanted to “kill” Social Security, Medicare and Medicare, when in fact he wants to keep them alive as vehicles to funnel money into the accounts of his Wall Street donors and insurance-industry paymasters.
Ryan will continue campaigning. He knows that he needs all the good publicity he can get. And he did score at year’s end, earning a glowing report from the gullible team at Time. The report on Ryan, which came complete with a photo of the congressman struggling with a bow and arrow, described him in glowing terms.
Headlined “The Prophet,” the Time article repurposed Ryan—a career politician who has spent his adult lifetime in Washington—as a courageous battler against political orthodoxy. Hailing the congressman as “the most influential America politician,” the fawning report imagined that “through a combination of hard work, good timing and possibly suicidal guts, the Wisconsin Republican managed to harness his party to a dramatic plan for dealing with America’s rapidly rising public debt.”
Never mind that Ryan’s plan has no chance of being adopted—even by a President Mitt Romney, who distinguished himself in 2011 by pointedly rejecting Texas Governor Rick Perry’s Social Security–bashing. According to Time, Ryan “brought an ugly issue out of the foggy realm of think tanks and blue-ribbon panels and dropped it into the middle of the national debate in time to define the next presidential election.”
Time’s editors missed the irony of placing a piece praising Ryan just a few pages away from the cover story that hailed “The Protester” as the magazine’s “Person of the Year.” While the piece on the global wave of protests against bad politics and bad economics was vapid in the extreme, it at least acknowledged that a primary focus of anger in the United States is the austerity lie—and the inequality it promotes.
The fact is that millions of Americans are actively protesting against the political corruption that floods corporate cash into the campaign accounts of pliable congressmen like Paul Ryan. The American people are furious with the pay-to-play politics that has tipped the balance in Washington away from the best interests of people in communities such as Janesville and toward the special interests on Wall Street.
Paul Ryan embodies this corruption of America’s promise. He may still be able to fool the editors at Time. He may still be able to scam a headline out of the PolitiFact folks. And he may still be Mitt Romney’s political “lifeline.” But he is not fooling the American people. And Romney and other Republicans who are hawking Ryan’s plan as a panacea will be reminded of that fact once the caucuses are done and the real 2012 campaign begins.

Payroll Tax Cut Raises Worries about Social Security’s Future Funding by Jia Lynn Yang / The Washington Post / Common Dreams

Payroll Tax Cut Raises Worries about Social Security’s Future Funding

by Jia Lynn Yang
By extending the payroll tax cut, Congress and the administration have quietly made a critical change in how Social Security is funded — one that some in Washington worry could undermine the program’s foundation if lawmakers keep renewing the tax break.
Since the entitlement program’s inception in 1935, many changes to Social Security have been enacted or attempted. For the first time in the program’s history, tens of billions of dollars from the government’s general pool of revenue are being funneled to the Social Security trust fund to make up for the revenue lost to the tax cut. Roughly $110 billion will be automatically shifted from the Treasury to the trust fund to cover this year’s cut, according to the Social Security Board of Trustees. An additional $19 billion, it is estimated, will be necessary to pay for the two-month extension.
The tax cut is supposed to be temporary. But as squabbles over this issue and the Bush tax cuts have revealed, short-term tax cuts in Washington have a way of sticking around longer than planned, especially as economic growth remains slow and lawmakers are wary of raising anyone’s tax bill.
The prospect of policymakers continually turning to the payroll tax as a way of providing economic stimulus troubles experts, some lawmakers and both public trustees of the Social Security trust fund. Their concern: that Social Security will lose its status as a protected benefit owed to every working American and instead become politically vulnerable, just like any other government program.
And as this year’s debate about the nation’s debt showed, nothing is off limits to the political brinkmanship that has come to dominate Washington.
“It’s a grave step for Social Security,” said Charles Blahous, one of two public trustees for Social Security and a research fellow with the Hoover Institution. “It just seems to me the program both financially and politically will be on a lot rockier footing.”
Robert Reischauer, the other public trustee and president of the Urban Institute, said extending the payroll tax cut another year during high unemployment seems justified. But it “could, if it continues for a substantial period of time, undermine one of the foundational arguments that makes the Social Security program inviolate.”
Since its inception under President Franklin D. Roosevelt, the Social Security program has been premised on a simple contract: Americans pay into the program’s trust fund over years of paychecks through the payroll tax. In return, when they retire, they receive monthly benefits.
The payroll tax cut changes that. Instead being a protected program with its own stream of funding, Social Security, by taking money from general revenue, becomes more akin to other government initiatives such as Pentagon spending or clean-air regulation — programs that rely on income taxes and political jockeying for support.
“All of a sudden Social Security will have to compete with every other program, whereas before it had its own dedicated revenue,” said Nancy Altman, co-director of Social Security Works, an advocacy group. “It’s breaking the kind of firewall that has always existed between the trust fund and the operating fund.”
She added: “The biggest concern is that this was done without any hearings, without any apparent regard for the impact on Social Security.”
The chief actuary of the Social Security trust fund has affirmed that the payroll tax cut will not put a dent in the $2.6 trillion fund, which is expected to pay all promised benefits until 2036. The law requires the government to make up any shortfalls.
The fund has been built up over time by contributions from the 12.4 percent payroll tax, of which employees and employers each pay 6.2 percent. The temporary tax break reduced the share paid by employees by 2 percentage points.
Altman said that the tax had never been reduced before, and the most it has been raised at any time is 0.5 percentage points.
“We’ve never really monkeyed around with Social Security before,” said Blahous. “Until now it was understood the payroll tax was supposed to do one thing. It wasn’t supposed to be a stimulus mechanism. Now the payroll tax is this variable thing that goes up and down according to other economic conditions. That is a real transformation of what that money is supposed to do.”
The pressure to cut the tax came from the country’s slow-growing economy. Last December, Republican lawmakers fought to extend the George W. Bush tax cuts, which were about to expire, while the White House pushed for a tax credit called Making Work Pay. Their compromise: a two-year extension of the Bush tax cuts, a year of extended unemployment benefits and a one-year payroll tax cut that effectively replaced Obama’s tax credit idea.
Last year’s payroll tax cut saved the average U.S. household more than $900, according to the Tax Policy Center.
During the fight earlier this month, Democrats borrowed from the Republican playbook, arguing that reverting to the old rate would be a tax hike. And economists worried that allowing the cut to expire would dampen economic growth in 2012 by as much as two-thirds of a percentage point.
The payroll tax cut could be here to stay for a while. Senate Majority Leader Harry M. Reid (D-Nev.) has said he will appoint a conference committee to search for ways to extend the two-month cut for all of 2012.
Blahous said Social Security will be facing enough financial pressures in the years to come without the payroll tax cut complicating matters.
This year, the Social Security system projects that it will pay out $46 billion more in benefits than it will collect in cash. It made up for the shortfall by redeeming Treasury bonds bought in years when there were cash surpluses.
Lawmakers on both sides of the aisle, including Sen. Bernie Sanders (I-Vt.), Sen. Jon Kyl (R-Ariz.) and dozens of House Democrats, have expressed concerns about the impact of the payroll tax cut on Social Security.
“Whether you’re on the left or the right, you should really dislike this,” said Blahous. “It has been somewhat mystifying, the determination to do this. I just think it’s shortsightedness.”

Wednesday, December 28, 2011

When Democracy Becomes Disposable by Roger Bybee / In These Times / Common Dreams

When Democracy Becomes Disposable

by Roger Bybee
The Laboratory for Our Future is the ominous subtitle of Charles Bowden's haunting 1998 book about Ciudad Juarez, Mexico.
Benton Harbor Emergency Manager Joseph Harris speaks at the MLGMA Summer Conference 2011, held on July 28 in St. Joseph, Mich., a town next door to Benton Harbor. (Photo courtesy Michigan Municipal League/Flickr) The seedy but highly profitable laboratory revealed by Bowden, also author of the harrowing book Murder City about narco wars in Juarez, brings together the 19th-century model of sweatshop labor with 21st-century technology to generate maximum earnings for the U.S.-owned firms while offering minimal pay under NAFTA's protections.
In 1999, for example, GE CEO Jack Welch collected $92 million in compensation, more than his 15,000 Mexican workers combined. U.S.-based corporations pay no taxes and only minimal annual fees in Juarez, so the vast majority of social costs are borne by the citizenry. As former Juarez Mayor Gustavo Elizondo explains, "We have no way to provide water, sewage, and sanitation works. Every year we get poorer and poorer even though we create more and more wealth."
But at the opposite end of the globalization process from Juarez, there's another laboratory conducting a related experiment : Benton Harbor, Mich., which once hosted jobs that have moved to places like Juarez. Like the workers in Juarez, impoverished residents of Benton Harbor—which is 92 percent African-American—have been stripped of democratic rights.
In Juarez, the prevalence of fraudulent political elections stolen and brutal repression have deprived the mostly female "maquiladora" workforce in assembly plants of any meaningful voice in either their workplaces or society.

In Benton Harbor, a unionized manufacturing workforce has been cast aside and the presence of nearly 10,000 overwhelmingly poor and black people are a potential obstacle to corporations like Whirlpool implementing a plan for redeveloping the area. Benton Harborites, too, have been rendered utterly powerless.

Thanks to Public Act 4, promoted by a Whirlpool ally and signed by GOP Gov. Rick Snyder, Benton Harbor Emergency Manager Joe Harris gained expanded powers to override decisions made by the democratically elected City Council and School Board. He literally expelled the elected mayor from his own office. Harris and other managers can also negate union contracts and other city agreements.

Gov. Snyder seems to believe that a state takeover of cities is more essential to their health than providing actual financial aid, which has been reserved for Michigan corporations in the form of $1.7 billion in tax cuts. Meanwhile, in part because of state budget cuts, Harris plans to raise water rates by about 40 percent even though 20 percent of the city's residents can't or won't pay city fees.

The Whirlpool Corp., headquartered in Benton Harbor, is playing a huge role in re-shaping the city, specifically in two major projects:
  • A heavily taxpayer "incentivized" new corporate campus for 4,000 professionals, as Whirlpool began off-shoring jobs in the 1980s (its Fort Smith Ark. plant is being relocated to Mexico)
  • A 530-acre Harbor Shores development including a Jack Nicolaus-designed golf course, high-end shopping, and condominiums. Whirlpool is also busy promoting an "Arts District" that attracts many affluent whites but few local black residents.
Whirlpool's role is not universally praised, as the New York Times Magazine' Jonathan Mahler reports in his December 18 cover story:
To skeptics of the redevelopment of Benton Harbor, Whirlpool looks less like a good corporate citizen than another company manipulating the system, leveraging its power to maximize its tax breaks and taking advantage of the town's access to federal and state grant money. (It's worth noting that Whirlpool hasn't paid any federal corporate income taxes in the United States for the last three years, partly, the company says, because of losses due to the recession.)
But the recession explanation covers only a small part of Whirlpool's tax picture, according to Matt Gardner, executive director of the Washington, DC-based Institute for Taxation and Economic Policy. Losses in recent years of economic troubles in the U.S. have been offset by foreign profits.
Further, in 2007, Whirlpool reported U.S. profits of $103 million, but earned an additional $701 million abroad that will not be taxed until Whirlpool brings the money back into the United States. Moreover, Whirlpool got a federal tax rebate of $28 million that year. In 2006, $231 million in U.S. earnings were topped off by another $388 million in foreign profits.

Whirlpool's central role in the town and redevelopment plans has led many Benton Harbor residents to feel that the corporation views them as distinctly disposable and mainly a barrier to their plans. As Mahler summarizes,
It's being converted into a resort town for wealthy weekenders and Whirlpool employees that, when all is said and done, its struggling black population will either be driven out by the development or reduced to low-wage jobs cleaning hotel rooms, carrying golf bags or cutting grass.
Mahler observes,
The juxtaposition of Benton Harbor's impoverished population and its two rising monuments to wealth -- all wedged into a little more than four square miles -- make it almost a caricature of economic disparity in America.
But at the same time, it offers a window into one possible future for towns across the country, places that can no longer support their own economies or take care of their citizens and may ultimately have no choice but to turn their fate over to private industry and nonprofits. The way things are going, more and more states may start to look like Michigan, and more and more towns may start to look like Benton Harbor.
The Benton Harbor scenario is actually a familiar one for other de-industrialized cities wracked by massive industrial job loss or poor cities wrecked by natural disasters. As Hurricane Katrina tore off roofs and exposed the destroyed interiors of homes, it also peeled back the genteel veneer of elite opinion about New Orleans revealing that many top corporate and political figures viewed the majority of its residents to be essentially irrelevant, if not an outright impediment, to the restructuring of the city's devastated economy.
The flight of the city's poorest citizens was viewed openly as a chance for a fresh start. It not only removed a substantial part of the Big Easy's poor, black population for whom the city's economic leaders no longer saw as their responsibility to provide employment, but it also severely diminished their voting power and ability to have a role in determining how the city would be rebuilt.

The Arts District formula being applied to Benton Harbor has also been tried out in my hometown of Racine, Wis., a factory town of 80,000 hollowed out by the loss of well over 40 percent of its manufacturing base since 1980.

The solution: replacing more than 13,000 mostly unionized factory jobs with a new art museum and a cluster of art galleries and crafts shops. New York Times reporter Robert Sharoff fully bought into this re-invented Racine, a vision seemingly derived from the work of neo-liberal urbanist Richard Florida:
This formerly gritty industrial city roughly 70 miles north of Chicago and 30 miles south of Milwaukee on the shores of Lake Michigan has been trying for much of the last decade to reinvent itself as an artistÕs colony and tourist destination. The efforts have included the opening of the $11 million Racine Art Museum on Main Street in 2003 and the creation of a gallery district centering on nearby Sixth Street.
This stunning premise that the museum and 12 art galleries could significantly fill in the economic Grand Canyon left by the destruction of 13,000 family-supporting factory jobs reflects the same mentality that can view the Harbor Shores development as a path to prosperity for Benton Harbor's impoverished African-American population.
Despite Mahler's moving and insightful description of a de-industrialized city being re-shaped by those who destroyed the economic base, with the victims being deprived of any voice, he fails to point out several fundamental features:
  • Those harmed most by past corporate decisions are treated as disposable people standing in the way of corporate-defined reconstruction.
  • Democracy and public participation are early victims to this process.
  • With corporate elites having shrunken government's public-interest role in planning and economic development, major "job-creation projects" must be shaped around generating profit with the needs of the majority a negligible concern.
But despite all the rhetoric about corporations rushing to the rescue of troubled cities--whether New Orleans, Benton Harbor, or Racine—massive public subsidies to CEOs advocating "free enterprise" are an essential element.

Tuesday, December 27, 2011

The Corporations That Occupy Congress by David Cay Johnston / Reuters / Common Dreams

Some of the biggest companies in the United States have been firing workers and in some cases lobbying for rules that depress wages at the very time that jobs are needed, pay is low, and the federal budget suffers from a lack of revenue.
Last month Citizens for Tax Justice and an affiliate issued “Corporate Taxpayers and Corporate Tax Dodgers 2008-10″. It showed that 30 brand-name companies paid a federal income tax rate of minus 6.7 percent on $160 billion of profit from 2008 through 2010 compared to a going corporate tax rate of 35 percent. All but one of those 30 companies reported lobbying expenses in Washington.
Another report, by Public Campaign, shows that 29 of those companies spent nearly half a billion dollars over those three years lobbying in Washington for laws and rules that favor their interests. Only Atmos Energy, the 30th company, reported no lobbying.
Public Campaign replaced Atmos with Federal Express, the package delivery company that paid a smidgen of tax — $37 million, or less than one percent of the $4.2 billion in profit it reported in 2008 through 2010.
For the amount spent lobbying, the companies could have hired 3,100 people at $50,000 for wages and benefits to do productive work.
The report – “For Hire: Lobbyists or the 99 percent” – says that while shedding jobs, the 30 companies are “spending millions of dollars on Washington lobbyists to stave off higher taxes or regulations.”
These and other companies have access to lawmakers and regulators that are unavailable to ordinary Americans.
Doubt that? Dial the Capitol switchboard at (202) 224-3121, ask for your representative’s office and request a five-minute audience, in person, at the lawmaker’s convenience back in the home district.
In more than a decade of lectures recommending this, I have yet to have a single person email me about having scored a private meeting with the representative called.
Corporations have vast resources to pour into ensuring access — resources that expand when little or no taxes are paid on profits thanks to rules they previously lobbied into law.
Companies form nonprofit trade associations, hire former lawmakers and agency staffers, and have jobs to dole out to lawmakers after they leave office and to friends and family while they’re in office. Thanks to the Supreme Court’s Citizens United decision, corporations can now pour unlimited sums into influencing elections. So can unions, but they are financial pipsqueaks compared to companies.
Then there are political action committees, or PACs, to finance campaigns as well as donations by executives and major shareholders.
Combine all this and you have a powerful formula for making rules that favor corporate interests over human interests, something that the framers of the U.S. Constitution understood more than two centuries ago.
James Madison wrote disapprovingly in 1792 of “a government operating by corrupt influence, substituting the motive of private interest in place of public duty” where eventually “the terror of the sword, may support a real domination of the few, under an apparent liberty of the many.”
The late U.S. president’s fears have come to life. For swords, just substitute police with rubber bullets, batons and pepper spray at Occupy demonstrations, including perfectly peaceful ones.
Company reports to shareholders show that among the 30 companies in the Public Campaign report, the 10 firms that spent the most on lobbying during the same three-year period fired more than 93,000 American workers.
Those firings took place in an economy that had five million fewer people with any work in 2010 than in 2008.
All those firings mean higher costs to taxpayers to support those unable to find work, including the more than 4.2 million Americans who are now persevering by applying for jobs after more than a year. Millions more have given up and are no longer counted among the unemployed.
Federal Express spent $25 million lobbying to protect a rule that makes it virtually impossible for its express delivery workers to unionize. That’s 67 percent of what it paid in taxes.
FedEx says it was “educating lawmakers” about a proposal “that would cripple competition in the express delivery industry and hinder our nation’s future economic success.”
The Teamsters, who represent drivers at United Parcel Service, say FedEx was protecting a special interest rule that shorts workers. UPS pays its unionized drivers 53 percent to 104 percent more per hour than FedEx does.
The United States already ranks second among modern nations, just behind South Korea, in the share of its workers in low-wage jobs while too many companies lobby for ever lower taxes, ever smaller wages and ever fewer worker rights to protect the mighty torrents of greenbacks flowing into their coffers. A better balance would make America better off.

The Defining Issue: Not Government's Size, But Who It's For: by Robert Reich / Huff Post

The Defining Issue: Not Government's Size, But Who It's For: by Robert Reich / Huff Post

The defining political issue of 2012 won't be the government's size. It will be who government is for.
Americans have never much liked government. After all, the nation was conceived in a revolution against government.
But the surge of cynicism now engulfing America isn't about government's size. It's the growing perception that government isn't working for average people. It's for big business, Wall Street, and the very rich instead.
In a recent Pew Foundation poll, 77 percent of respondents said too much power is in the hands of a few rich people and corporations.
That's understandable. To take a few examples:
-- Wall Street got bailed out but homeowners caught in the fierce downdraft caused by the Street's excesses have got almost nothing.
-- Big agribusiness continues to rake in hundreds of billions in price supports and ethanol subsidies. Big pharma gets extended patent protection that drives up everyone's drug prices. Big oil gets its own federal subsidy. But small businesses on the Main Streets of America are barely making it.
-- American Airlines uses bankruptcy to ward off debtors and renegotiate labor contracts. Donald Trump's businesses go bankrupt without impinging on Trump's own personal fortune. But the law won't allow you to use personal bankruptcy to renegotiate your home mortgage.
-- If you run a giant bank that defrauds millions of small investors of their life savings, the bank might pay a small fine but you won't go to prison. Not a single top Wall Street executive has been prosecuted for Wall Street's mega-fraud. But if you sell an ounce of marijuana you could be put away for a long time.
Not a day goes by without Republicans decrying the budget deficit. But the biggest single reason for the yawning deficit is big money's corruption of Washington. And it's not just corporate welfare.
One of the deficit's biggest drivers -- Medicare -- would be lower if Medicare could use its bargaining leverage to get drug companies to reduce their prices. Why hasn't it happened? Big Pharma won't allow it.
Medicare's administrative costs are only 3 percent, far below the 10 percent average administrative costs of private insurers. So why not tame rising healthcare costs for all Americans by allowing any family to opt in? That was the idea behind the "public option." Health insurers stopped it in its tracks.
The other big budgetary expense is national defense. America spends more on our military than do China, Russia, Britain, France, Japan, and Germany combined. The basic defense budget (the portion unrelated to the costs of fighting wars) keeps growing, now about 25 percent higher than it was a decade ago, adjusted for inflation.
That's because defense contractors have cultivated sponsors on Capitol Hill and located their plants and facilities in politically important congressional districts.
So we keep spending billions on Cold War weapons systems like nuclear attack submarines, aircraft carriers, and manned combat fighters that pump up the bottom lines of Bechtel, Martin-Marietta, and their ilk, but have nothing to do with 21st-century combat.
Declining tax receipts are also driving the deficit. That's partly because most Americans have less income to tax these days.
Yet the richest Americans are taking home a bigger share of total income than at any time since the 1920s. Their tax payments are down because the Bush tax cuts reduced their top rates to the lowest level in more than half a century, and cut capital gains taxes to 15 percent.
Congress hasn't even closed a loophole that allows mutual-fund and private-equity managers to treat their incomes as capital gains.
So the 400 richest Americans, whose total wealth exceeds the combined wealth of the bottom 150 million Americans put together, pay an average of 17 percent of their income in taxes. That's lower than the tax rates of most day laborers and child-care workers.
Meanwhile, Social Security payroll taxes continue to climb as a share of total tax revenues. Yet the payroll tax is regressive, applying only to yearly income under $106,800.
And the share of revenues coming from corporations has been dropping. The biggest, like GE, find ways to pay no federal taxes at all. Many shelter their income abroad, and every few years Congress grants them a tax amnesty to bring the money home.
Get it? "Big government" isn't the problem. The problem is big money is taking over government.
Government is doing less of the things most of us want it to do -- providing good public schools and affordable access to college, improving our roads and bridges and water systems, and maintaining safety nets to catch average people who fall -- and more of the things big corporations, Wall Street, and the wealthy want it to do.
Some conservatives argue we wouldn't have to worry about big money taking over government if we had a smaller government to begin with.
Here's what Congressman Paul Ryan told me Sunday morning when we were debating all this on ABC's This Week:
If the power and money are going to be here in Washington, that's where the influence is going to go ... that's where the powerful are going to go to influence it.
Ryan has it upside down. A smaller government that's still dominated by money would continue to do the bidding of Wall Street, the pharmaceutical industry, oil companies, big agribusiness, big insurance, military contractors, and rich individuals.
It just wouldn't do anything else.
If we want to get our democracy back we've got to get big money out of politics.
We need real campaign finance reform.
And a constitutional amendment reversing the Supreme Court's bizarre rulings that under the First Amendment money is speech and corporations are people.
Robert Reich is the author of Aftershock: The Next Economy and America's Future, now in bookstores. This post originally appeared at

Sunday, December 25, 2011

A Christmas Message From America's Rich: It seems America’s bankers are tired of all the abuse. They’ve decided to speak Matt Taibbi / Rolling Stone / Common Dreams

A Christmas Message From America's Rich

by Matt Taibbi
It seems America’s bankers are tired of all the abuse. They’ve decided to speak out.
"The very rich on today’s Wall Street," writes Taibbi, "Are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government." (Dario Cantatore/Getty) True, they’re doing it from behind the ropeline, in front of friendly crowds at industry conferences and country clubs, meaning they don’t have to look the rest of America in the eye when they call us all imbeciles and complain that they shouldn’t have to apologize for being so successful.
But while they haven’t yet deigned to talk to protesting America face to face, they are willing to scribble out some complaints on notes and send them downstairs on silver trays. Courtesy of a remarkable story by Max Abelson at Bloomberg, we now get to hear some of those choice comments.
Home Depot co-founder Bernard Marcus, for instance, is not worried about OWS:
“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”
Former New York gurbernatorial candidate Tom Golisano, the billionaire owner of the billing firm Paychex, offered his wisdom while his half-his-age tennis champion girlfriend hung on his arm:
“If I hear a politician use the term ‘paying your fair share’ one more time, I’m going to vomit,” said Golisano, who turned 70 last month, celebrating the birthday with girlfriend Monica Seles, the former tennis star who won nine Grand Slam singles titles.
Then there’s Leon Cooperman, the former chief of Goldman Sachs’s money-management unit, who said he was urged to speak out by his fellow golfers. His message was a version of Wall Street’s increasingly popular If-you-people-want-a-job, then-you’ll-shut-the-fuck-up rhetorical line:
Cooperman, 68, said in an interview that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. At least four people expressed their gratitude on Dec. 5 while he was eating an egg-white omelet, he said.
“You’ll get more out of me,” the billionaire said, “if you treat me with respect.”
Finally, there is this from Blackstone CEO Steven Schwartzman:
Asked if he were willing to pay more taxes in a Nov. 30 interview with Bloomberg Television, Blackstone Group LP CEO Stephen Schwarzman spoke about lower-income U.S. families who pay no income tax.
“You have to have skin in the game,” said Schwarzman, 64. “I’m not saying how much people should do. But we should all be part of the system.”
There are obviously a great many things that one could say about this remarkable collection of quotes. One could even, if one wanted, simply savor them alone, without commentary, like lumps of fresh caviar, or raw oysters.
But out of Abelson’s collection of doleful woe-is-us complaints from the offended rich, the one that deserves the most attention is Schwarzman’s line about lower-income folks lacking “skin in the game.” This incredible statement gets right to the heart of why these people suck.
Why? It's not because Schwarzman is factually wrong about lower-income people having no “skin in the game,” ignoring the fact that everyone pays sales taxes, and most everyone pays payroll taxes, and of course there are property taxes for even the lowliest subprime mortgage holders, and so on.
It’s not even because Schwarzman probably himself pays close to zero in income tax – as a private equity chief, he doesn’t pay income tax but tax on carried interest, which carries a maximum 15% tax rate, half the rate of a New York City firefighter.
The real issue has to do with the context of Schwarzman’s quote. The Blackstone billionaire, remember, is one of the more uniquely abhorrent, self-congratulating jerks in the entire world – a man who famously symbolized the excesses of the crisis era when, just as the rest of America was heading into a recession, he threw himself a $5 million birthday party, featuring private performances by Rod Stewart and Patti Labelle, to celebrate an IPO that made him $677 million in a matter of days (within a year, incidentally, the investors who bought that stock would lose three-fourths of their investments).
So that IPO birthday boy is now standing up and insisting, with a straight face, that America’s problem is that compared to taxpaying billionaires like himself, poor people are not invested enough in our society’s future. Apparently, we’d all be in much better shape if the poor were as motivated as Steven Schwarzman is to make America a better place.
But it seems to me that if you’re broke enough that you’re not paying any income tax, you’ve got nothing but skin in the game. You've got it all riding on how well America works.
You can’t afford private security: you need to depend on the police. You can’t afford private health care: Medicare is all you have. You get arrested, you’re not hiring Davis, Polk to get you out of jail: you rely on a public defender to negotiate a court system you'd better pray deals with everyone from the same deck. And you can’t hire landscapers to manicure your lawn and trim your trees: you need the garbage man to come on time and you need the city to patch the potholes in your street.
And in the bigger picture, of course, you need the state and the private sector both to be functioning well enough to provide you with regular work, and a safe place to raise your children, and clean water and clean air.
The entire ethos of modern Wall Street, on the other hand, is complete indifference to all of these matters. The very rich on today’s Wall Street are now so rich that they buy their own social infrastructure. They hire private security, they live on gated mansions on islands and other tax havens, and most notably, they buy their own justice and their own government.
An ordinary person who has a problem that needs fixing puts a letter in the mail to his congressman and sends it to stand in a line in some DC mailroom with thousands of others, waiting for a response.
But citizens of the stateless archipelago where people like Schwarzman live spend millions a year lobbying and donating to political campaigns so that they can jump the line. They don’t need to make sure the government is fulfilling its customer-service obligations, because they buy special access to the government, and get the special service and the metaphorical comped bottle of VIP-room Cristal afforded to select customers.
Want to lower the capital reserve requirements for investment banks? Then-Goldman CEO Hank Paulson takes a meeting with SEC chief Bill Donaldson, and gets it done. Want to kill an attempt to erase the carried interest tax break? Guys like Schwarzman, and Apollo’s Leon Black, and Carlyle’s David Rubenstein, they just show up in Washington at Max Baucus’s doorstep, and they get it killed.
Some of these people take that VIP-room idea a step further. J.P. Morgan Chase CEO Jamie Dimon – the man the New York Times once called “Obama’s favorite banker” – had an excellent method of guaranteeing that the Federal Reserve system’s doors would always be open to him. What he did was, he served as the Chairman of the Board of the New York Fed.
And in 2008, in that moonlighting capacity, he orchestrated a deal in which the Fed provided $29 billion in assistance to help his own bank, Chase, buy up the teetering investment firm Bear Stearns. You read that right: Jamie Dimon helped give himself a bailout. Who needs to worry about good government, when you are the government?
Dimon, incidentally, is another one of those bankers who’s complaining now about the unfair criticism. “Acting like everyone who’s been successful is bad and because you’re rich you’re bad, I don’t understand it,” he recently said, at an investor’s conference.
Hmm. Is Dimon right? Do people hate him just because he’s rich and successful? That really would be unfair. Maybe we should ask the people of Jefferson County, Alabama, what they think.
That particular locality is now in bankruptcy proceedings primarily because Dimon’s bank, Chase, used middlemen to bribe local officials – literally bribe, with cash and watches and new suits – to sign on to a series of onerous interest-rate swap deals that vastly expanded the county’s debt burden.
Essentially, Jamie Dimon handed Birmingham, Alabama a Chase credit card and then bribed its local officials to run up a gigantic balance, leaving future residents and those residents’ children with the bill. As a result, the citizens of Jefferson County will now be making payments to Chase until the end of time.
Do you think Jamie Dimon would have done that deal if he lived in Jefferson County? Put it this way: if he was trying to support two kids on $30,000 a year, and lived in a Birmingham neighborhood full of people in the same boat, would he sign off on a deal that jacked up everyone’s sewer bills 400% for the next thirty years?
Doubtful. But then again, people like Jamie Dimon aren’t really citizens of any country. They live in their own gated archipelago, and the rest of the world is a dumping ground.
Just look at how Chase behaved in Greece, for example.
Having seen how well interest-rate swaps worked for Jefferson County, Alabama, Chase “helped” Greece mask its debt problem for years by selling a similar series of swaps to the Greek government. The bank then turned around and worked with banks like Goldman, Sachs to create a thing called the iTraxx SovX Western Europe index, which allowed investors to bet against Greek debt.
In other words, Chase knowingly larded up the nation of Greece with a crippling future debt burden, then turned around and helped the world bet against Greek debt.
Does a citizen of Greece do that deal? Forget that: does a human being do that deal?
Operations like the Greek swap/short index maneuver were easy money for banks like Goldman and Chase – hell, it’s a no-lose play, like cutting a car’s brake lines and then betting on the driver to crash – but they helped create the monstrous European debt problem that this very minute is threatening to send the entire world economy into collapse, which would result in who knows what horrors. At minimum, millions might lose their jobs and benefits and homes. Millions more will be ruined financially.
But why should Chase and Goldman care what happens to those people? Do they have any skin in that game?
Of course not. We’re talking about banks that not only didn’t warn the citizens of Greece about their future debt disaster, they actively traded on that information, to make money for themselves.
People like Dimon, and Schwarzman, and John Paulson, and all of the rest of them who think the “imbeciles” on the streets are simply full of reasonless class anger, they don’t get it. Nobody hates them for being successful. And not that this needs repeating, but nobody even minds that they are rich.
What makes people furious is that they have stopped being citizens.
Most of us 99-percenters couldn’t even let our dogs leave a dump on the sidewalk without feeling ashamed before our neighbors. It's called having a conscience: even though there are plenty of things most of us could get away with doing, we just don’t do them, because, well, we live here. Most of us wouldn’t take a million dollars to swindle the local school system, or put our next door neighbors out on the street with a robosigned foreclosure, or steal the life’s savings of some old pensioner down the block by selling him a bunch of worthless securities.
But our Too-Big-To-Fail banks unhesitatingly take billions in bailout money and then turn right around and finance the export of jobs to new locations in China and India. They defraud the pension funds of state workers into buying billions of their crap mortgage assets. They take zero-interest loans from the state and then lend that same money back to us at interest. Or, like Chase, they bribe the politicians serving countries and states and cities and even school boards to take on crippling debt deals.
Nobody with real skin in the game, who had any kind of stake in our collective future, would do any of those things. Or, if a person did do those things, you’d at least expect him to have enough shame not to whine to a Bloomberg reporter when the rest of us complained about it.
But these people don’t have shame. What they have, in the place where most of us have shame, are extra sets of balls. Just listen to Cooperman, the former Goldman exec from that country club in Boca. According to Cooperman, the rich do contribute to society:
Capitalists “are not the scourge that they are too often made out to be” and the wealthy aren’t “a monolithic, selfish and unfeeling lot,” Cooperman wrote. They make products that “fill store shelves at Christmas…”
Unbelievable. Merry Christmas, bankers. And good luck getting that message out.

Sunday, November 20, 2011

Ceasefire in the War on Drugs? by Gwynne Dyer /

Ceasefire in the War on Drugs?

Like those generals who used to discover that nuclear weapons were not a good thing about twenty minutes after they took off their uniforms and started collecting their pensions, we have had a parade of former presidents who knew that the war on drugs was a bad thing – but only mentioned it after they were already ex-presidents. Now, at last, we have one who is saying it out loud while he is still in office.
President Juan Manuel Santos of Colombia, the country that has suffered even more than Mexico from the drug wars, is an honest and serious man. He is also very brave, because any political leader who advocates the legalization of narcotic drugs will become a prime target of the prohibition industry. He has chosen to do it anyway.
“We are basically still thinking within the same framework as we have done for the past forty years,” he told “The Observer” in a recent interview in Bogota. “A new approach should try and take away the violent profit that comes with drug trafficking....If that means legalizing [drugs]...then I will welcome it.”
Santos has no intention of becoming a kamikaze politician: “What I won’t do is become the vanguard of that movement [to legalize drugs] because then I will be crucified. But I would gladly participate in those discussions, because we are the country that’s still suffering most...from the high consumption in the US, the UK and Europe in general.”
There are no such discussions, of course. Santos is being disingenuous about this; he is really trying to start a serious international debate on drug legalization, not to join one. But the time may be ripe for such a debate, because it is now almost universally acknowledged (outside of political circles) that the “war on drugs” has been an extremely bloody failure.
Twenty years ago Milton Friedman, a Nobel Prize winner, the most influential economist of the 20th century, and an icon of the right, said: “If you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel.” It is only because the government makes the drugs illegal that the criminal cartel has a highly profitable monopoly on meeting the demand.
Milton Friedman also said: “Government never has any right to interfere with an individual for that individual’s own good. The case for prohibiting drugs is exactly as strong and as weak as the case for prohibiting people from over-eating. We all know that over-eating causes more deaths than drugs do.” But there are a quarter-million Americans in jail for possessing or selling drugs. Nobody is in jail for producing, marketing or eating junk food.
Friedman was right, of course, but forty years of the war on drugs have also shown that arguments based on logic, natural justice, or history (the obvious parallel with alcohol prohibition in the US in the 1920s and early 30s) have very little effect on policy in the main drug-importing nations. Many politicians there know that the war on drugs is futile and stupid, but the political cost of leaving the herd and saying so out loud is too high.
The political leaders who are starting to say that it’s time to end the war and legalize the drugs are almost all in the producer nations, where the damage has been far graver than in the drug-importing countries. In practice, therefore, they are almost all Latin American leaders – but even there they have waited until they left office to make their views known.
Former Mexican president Vicente Fox supported the US-led war on drugs when he was in office in 2000-2006, but more recently he has condemned it as an unmitigated disaster. “We should consider legalizing the production, sale and distribution of drugs,” he wrote on his blog. “Radical prohibition strategies have never worked.”
“Legalization does not mean that drugs are good,” Fox added, “but we have to see it as a strategy to weaken and break the economic system that allows cartels to make huge profits, which in turn increases their power and capacity to corrupt.”
Naturally, Fox only said all that when he was no longer president, because otherwise the United States would have punished Mexico severely for stepping out of line. In the same spirit, former presidents Fernando Henrique Cardoso of Brazil, Cesar Gaviria of Colombia and Ernesto Zedillo of Mexico made a joint public statement that drug prohibition had failed in 2009 – after they had all left office.
But gradually Latin American leaders are losing their fear of Washington. Last year Mexican President Felipe Calderon called for a debate on the legalization of the drug trade, although he carefully stressed that he himself was against the idea. (Then why did you bring it up, Felipe?) And now President Santos of Colombia has come out, still cautiously, to say that he would consider legalizing not only marijuana but cocaine.
The international discussion on legalization that Santos wants will not start tomorrow, or even next year, but common sense on drugs is finally getting the upper hand over ignorance, fear and dogmatism. And cash-strapped governments will eventually realize how much the balance sheet could be improved by taxing legalized drug consumption rather than wasting hundreds of billions in a futile attempt to reduce consumption.

Saturday, November 19, 2011

The new age of consumer activism Our understandable rage at corporations is behind customer-driven like Bank Transfer Day By David Sirota / Salon

Friday, Nov 18, 2011 8:00 AM 10:55:33 PST

The new age of consumer activism

Our understandable rage at corporations is behind customer-driven like Bank Transfer Day

Occupy Oakland protesters stand outside of a Wells Fargo bank in Oakland
Occupy Oakland protesters stand outside of a Wells Fargo bank in Oakland, Calif., Weds., Nov. 2, 2011. (Credit: AP/Paul Sakuma)
As we all know, America is angry. Really angry. To put it in pop culture terms, we’ve moved from the vaguely inspiring agita of Peter Finch in “Network” to the wild-eyed, primal-scream rage of Sam Kinison in “Back to School.”
When we pay attention to politics, we get peeved at Congress and the presidential candidates. When we tune into sports, we’re annoyed with squabbling players and owners. When we turn on the news, we fume at the smug pundits. And when it comes to the economy, we’re in a tizzy at big corporations.
Most of this indignation is nothing new; it is atavistic fury expressed in the modern vernacular. Yet, one strand of our anger — the kind directed at big business — may be truly novel, as our chagrin is no longer just that ancient animosity toward excessive corporate power. Instead, it has also become a personal disdain toward firms we deal with on a daily basis.
This is the key finding of the latest report from the Center for Services Leadership at Arizona State University. Its findings show that after years of rising anger, consumer rage has reached an all-time high.
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David Sirota
David Sirota is a best-selling author of the new book "Back to Our Future: How the 1980s Explain the World We Live In Now." He hosts the morning show on AM760 in Colorado. E-mail him at, follow him on Twitter @davidsirota or visit his website at More David Sirota

Video: Austerity will sink the economy / Robert Reich / Move On

Friday, Nov 18, 2011 2:49 PM 10:39:55 PST

Austerity will sink the economy

Budget cuts aren't the answer. Here are the four principles that should be guiding the supercommittee

Screen shot 2011-11-18 at 5.47.17 PM
(Credit: Courtesy of Robert Reich)
This originally appeared on Robert Reich's blog.
The biggest question right now on Planet Washington is whether the congressional supercommittee will reach an agreement.
That’s the wrong question. Agreement or not, Washington is on the road to making budget cuts that will slow the economy, increase unemployment and impose additional hardship on millions of Americans.
The real question is how to stop this austerity train wreck, and substitute the following:
FIRST: No cuts before jobs are back – until unemployment is down to 5 percent. Until then, the economy needs a boost, not a cut. Consumers – whose spending is 70 percent of the economy – don’t have the money to boost the economy on their own. Their pay is dropping and they’re losing jobs.
SECOND: Make the boost big enough. 14 million Americans are out of work, and 10 million are working part time who need full-time jobs. The President’s proposed jobs program is a start but it’s tiny relative to what needs to be done. It would create fewer than 2 million jobs. We need a big jobs program – rebuilding America’s crumbling infrastructure, and including a WPA and Civilian Conservation Corps.
Robert Reich, a professor of public policy at the University of California at Berkeley, was secretary of labor during the Clinton administration. He is also a blogger and the author of "Aftershock: The Next Economy and America's Future." More Robert Reich

15 Tea Party Caucus freshmen rake in $3.5 million in first 9 months in Washington By Aaron Mehta and Bob Biersack, iWatch / News Huff Post

15 Tea Party Caucus freshmen rake in $3.5 million in first 9 months in Washington

On her website, Rep. Diane Black asks constituents to join advisory panels in her Tennessee district. "I believe the best ideas to solve our nation's problems will come from people like you," Black writes, "not Washington bureaucrats and special interest groups."
Black is one of the new Republicans who rode a wave of anti-Washington sentiment into town in 2011, a self-identified member of the tea party wing that has been cast as a new kind of conservative-- fiery, unwilling to compromise and determined to downsize the government. But while many say Black and her companions have created a split in the Republican Party, it is not visible among the companies and interest groups that are donating to members of Congress.
A joint analysis by iWatch News and the Center for Responsive Politics has found that the 15 freshmen members of the Tea Party Caucus have embraced many of the same special interests that have supported Republicans for years. The fifteen combined have received over $3,450,000 during the first three quarters of this year from almost 700 different PACs.
It's an impressive haul for a group of newly elected House members. But it shouldn't be surprising that these fresh faces found new friends in Washington.
"Business as usual," says Mary Boyle of good-government group Common Cause. "The lobbyists and other traditional Washington powers know that the newbies will learn fast that they need them, and their rolodexes."
It may well be, but some of the freshmen appear to have their eyes wide open.

Rep. Dennis Ross, R-Fla., has received more than $252,000 from PACs, accounting for about two-thirds of the money he has raised this year. His chief of staff, Fred Piccolo, was unapologetic for the donations the congressman has received. "One person's 'special interest' is another person's 'personal interest,'" he said.
Among the biggest PAC donors to the tea party freshmen are familiar Washington faces, including Honeywell International, which led the way both in number of donations and overall money given. The top five corporate PACs that donated to these freshmen:
  • Honeywell International, a Fortune 100 company best known for its defense manufacturing, made 52 donations worth at least $105,000
  • The American Bankers Association, one of the major trade associations for the financial sector, made 31 donations worth at least $53,000
  • Lockheed Martin, one of the biggest defense contractors in the country, with 30 donations for at least $28,000
  • Koch Industries, the company run by conservative billionaire brothers Charles and David Koch, made 29 donations worth at least $38,000
  • The National Association of Realtors, a major trade group for real estate agents, with 29 donations worth $34,000

Mouseover the Tea Party members' photos to view the amount collected from PACs
At least $418,000
At least $418,000 from 190 PACs
Diane Lynn Black
At least $383,000
At least $383,000 from 125 PACs
David B McKinley
At least $370,000
At least $370,000 from 162 PACs
Steve Fincher
At least $241,000
At least $252,000 from 123 PACs
Dennis Ross
At least $234,000
At least $234,000 from 105 PACs
Sandy Adams
At least $221,000
At least $221,000 from 102 PACs
Joe Walsh
At least $220,000
At least $220,000 from 109 PACs
Tim Walberg
At least $215,000
At least $215,000 from 103 PACs
Blake Farenthold
At least $210,000
At least $210,000 from 98 PACs
Allen B West
At least $200,000
At least $200,000 from 111 PACs
Vicky Hartzler
At least $177,000
At least $177,000 from 87 PACs
Steven Palazzo
At least $144,000
At least $144,000 from 93 PACs
Tim Huelskamp
At least $129,000
At least $129,000 from 48 PACs
John Michael "Mick''Mulvaney
At least $106,000
At least $106,000 from 47 PACs
Richard B Nugent
At least $59,000
At least $170,000 from 86 PACs
Jeff Duncan

The fifteen members also took a significant amount of money from ideological groups, including at least $100,000 from the PAC of Republican Majority Leader Eric Cantor, at least $55,000 from the Boehner-affiliated Freedom Project, and at least $42,000 from the Republican Majority Committee PAC. Groups in this category were critical to the financial success of many of these candidates in 2010. Since their victories, however, these members are finding financial support for their campaigns from a much wider selection of interests in Washington.
Black, one of the richest members of Congress, seems to have quickly learned her way around town. She leads the way as the most successful fundraiser in the bunch, having raised at least $418,000 from PACs alone through the first three quarters.
Overall, this group of freshmen representatives has become just as reliant on PAC money as their counterparts who have been in the House longer. The median Tea Party Caucus freshman brought in roughly 44 percent of their money from PACs, 43 percent from large individual donors, and 4 percent from small donors who gave less than $200 each. Comparatively, the median House Republican got 46 percent from PACs, 45 percent from large individuals and 4 percent from small individual donors.
One freshman caucus member who stands out among his peers is Rep. Allen West, who represents Florida's 22nd district. Early on in the 2010 election West became a phenomenon, one who was able to raise massive amounts from small contributions around the country as if he were a national figure. And the influx of contributions has not slowed. While he has raised at least $210,000 from PACs through the first nine months of this year, the percentage of money he has received in from individual donations of $200 or less has actually increased since his election, something rarely seen among politicians.
The Bankers Association is another notable, given the full throated support of the financial system raised by some members of the Tea Party Caucus. Freshman Joe Walsh recently screamed at a constituent who asked about big banks' role in the financial collapse, "Don't blame the banks ... that pisses me off." In fact, over 17 percent of the money brought in by the Tea Party Caucus freshmen came from the financial institution, according to CRP numbers.
Ross, the Florida congressman, was somewhat surprised by how much fundraising a freshman member has to do, Chief of Staff Piccolo said. "It has definitely been more than anticipated, but in the end, many of these folks represent organizations with tens of thousands of employees and a direct impact on the district.... [Ross'] willingness to stand against feeding at the DC spending trough have endeared him to some and angered others."
"For every 'special interest' that writes a check, there are an equal number that would write one to an opponent."
"Newcomers quickly realize that if they want to stay in Congress, they must immediately begin raising lots of money" says Common Cause's Boyle. "So they go to the people and interests who are more than happy to give it - those who want something from Congress."
"Sadly, it's what you have to do to survive in this system, and that's why it must be changed, so that lawmakers don't take office owing favors to their biggest campaign donors. "
The Tea Party Caucus is an official house caucus founded by Rep. Michelle Bachmann, R-Minn., in 2010. Although many conservative Republicans have been identified as being tea party supporters, there are only 60 official members of the caucus. When asked if there was a freshman representative to the caucus, spokeswoman Becky Rogness said that the only official is Rep. Bachmann. And because the caucus is an official government entity, "it is not involved in political campaigning or fundraising."
In response to questions for this article, Honeywell spokesman Rob Ferris said "Honeywell's Political Action Committee supports those who support the policies that are most important to our company and are in the best interest of growing the American economy and creating American jobs." He declined to answer follow up questions, as did Lockheed spokesman Jeff Adams after stating that "Lockheed Martin supports a wide range of political leaders based on their level of interest and commitment in national security, homeland security, and other issues of importance to the corporation including education and technology."
Sara Wiskerchen, a spokeswoman for the National Association of Realtors, said that "NAR is the most bipartisan PAC in the country" and bases it's giving on candidates with "have strong records of support for homeownership and private property rights." When asked if members of the Tea Party Caucus were more sympathetic to the concerns of the NAR, Wiskerchen said "No, support for homeownership issues we consider important varies across all political parties and depends strongly on the issue."
Request for comments were not returned from the American Bankers Association or Koch Industries. All 15 of the freshmen mentioned were contacted. Anyone not quoted here did not respond to a request for comment.
Aaron Mehta is a staff writer with the Center for Public Integrity. Bob Biersack is a senior fellow at the Center for Responsive Politics.