The GOP’s “Small Government Hoax”

A central claim of the Republican Party is that it is the small government political party. That claim is refuted by facts on the ground and in regard to when the GOP does believe in reducing spending and limiting enforcement of laws, it does so to the detriment of society.

The GOP has supported wide-spread surveillance, indefinite detention without trial, and extraordinary rendition. It has also supported subsidies for religious institutions — a clear violation of the concept of separation of church and state –government restrictions on immigration and free passage across international borders; government denial of collective bargaining rights for public sector workers; government attacks on public use of public space (assaults on the Occupy movement); government interference with the right of same-sex peoples to marry; government provision of extraordinarily lengthy imprisonment for drug possession; government interference with voters’ rights; and government restrictions on freedom of information.

The GOP does believe in small government when it comes to cutting taxes for the wealthy; limniting regulation of big business; gutting environmental regulations; weakening legal protections for workers and racial minorities; and slashing government funding for public education, public health and social welfare services.

Mitt Romney’s proposal to add $2 trillion to the projected 10-year spending on the Pentagon exemplifies the GOP’s romance with a bloated Pentagon; however, it does not stop there. This party’s claims of being the prime advocate of small government does not extend to the sprawling intelligence complex that has been created since 9/11, nor to the extensive security funding granted to the Department of Homeland Security.

The case made above does not excude the Democratic Party leadership from complicity in some of the positions described above — President Obama, for example, embraces all of the civil liberties retrictions enumerated above — the trust of this writing is to refute the claim that the Republican Party is the party of small government.

I am indebted to Professor Larry Wittner, who serves with me on the board of Peace Action, for much of the content above. Larry’s article can be read in the August 27, 2012 issue of History News Network.

A Tax Numbers Exercise in Futility

When Mitt Romney introduced his tax plan he described it as necessary to get the economy moving. During a campaign stop in Ohio, Romney abandoned his original rationale when he warned taxpayers not to expect big tax cuts, because he was going to eliminate tax preferences to make his tax plan revenue neutral, or close to it. In other words, Romney was, in effect, taking away with one hand what he had given with the other.

Mitt Romney’s next foray into the realm of unreality came in the first presidential debate, when he vowed not to increase taxes on the wealthy — now commonly defined as those with taxable income of over $250,000 — as he said they are “doing very well.” Romney also blundered when he said that he would not support any tax cuts that increased the deficit. Also, when Romney said he did not have a $5 trillion tax plan, he was either disputing the $5 trillion figure, or actually denying the existence of any tax plan.

The non-partisan Tax Policy Center (TPC) has dissected the main features of the plan, meaning that the revenue loss will be even greater than TPC’s final figure, because there are additional tax cuts in the Romney plan. The revenue loss over 10 years is as follows:
1) Lowering each of the current six tax rates by 20 percent – $2.5 trillion.
2) Tax cut for corporations – $1.1 trillion.
3) Eliminating the alternative minimum tax (ATM) – $700 billion.
4) Repeal the high-income payroll tax – $250 billion.
5) Repeal the estate tax – $150 billion.

For some reason, the TPC did not include the permanent extension of the Bush tax cuts in its breakdown; however, there is general consensus among economists that the ten-year loss from extension of these cuts will be in the close vicinity of $1 trillion. Therefore, factoring in interest to the revenue loss total above, results in a revenue loss of $6 trillion.

Mitt Romney has also proposed spending an additional $2 trillion over the current projected 10-year spending. Mitt Romney’s task then becomes one of finding $ 8 trillion in offsets for the combined loss of revenue from the tax cuts and the additional $2 trillion of military spending. A start in doing that is the following:
1) Eliminate all tax preferences for the wealthy – $1.7 trillion.
2) Eliminate corporate tax benefits to offset the corporate tax cut – $1.1 trillion.
3) Eliminate all discretionary domestic spending – a little over $1 trillion.

By factoring in interest, the $8 trillion added to the deficit would be offset by a little over $4 trillion by doing the three things described above. After 10 years of following Mitt Romney’s fatally flawed tax plan, the only components of government left standing would be a superstrong military and Social Security, although Paul Ryan is a strong proponent of Social Security privatization.

As the comedian Steven Colbert has hilariously pointed out, why go through 10 years of no increase in governmental revenue, a huge increase in the deficit and the loss of tax preferences cancelling out tax cuts.

The Romney Tax Plan Dissected

The main feature of the Romney tax plan is that it would reduce the six current tax brackets by 20 percent each. Thus, the 35 percent rate would go down to 28 percent, the 25 percent rate would go down to 20 percent and so forth. Besides these rate reductions, Romney’s plan would permanently extend the 2001 and 2003 Bush tax cuts; eliminate the estate tax, along with the alternative minimum tax (ATM); cut the corporate tax rate from 35 percent to 25 percent; do away with the taxes in the 2010 health reform legislation; and eliminate the taxation of investments of most individual taxpayers.

The Tax Policy Center has calculated that the Romney tax plan would result in a revenue loss of $4.8 trillion over ten years. The ten-year revenue loss, coupled with the estimated $2 trillion cost of Romney’s specified additions to military spending would blow a $6.8 trillion hole in the deficit. Filling that massive hole would mean draconian cuts in all non-military components of the national government budget.

Mitt Romney has contended for a year and a half that major tax cuts are necessary to get the economy moving; however, he changed that pitch at a campaign stop in Ohio, where he warned taxpayers not to expect big tax cuts, because he would eliminate many tax preferences. Romney would thus be taking back with one hand what he gave with the other. He has of yet not identified a single tax deduction, credit or subsidy that he would eliminate.

In the first presidential debate. Romney denied having any knowledge of the tax plan he had been promoting. He then dealt a potentially fatal blow to his election hopes when he vowed not to support any tax increase for those earning over $250,000, because they were doing very well right now. Then, Romney made another vow which was right out of Alice in Wonderland: he said he would not support any tax cut that would increase the deficit. Since all tax cuts increase the deficit, Mitt Romney would either need to propose equivalent cuts in spending, or try to find enough tax preferences to eliminate to achieve a similar result.

Mitt Romney has also talked about achieving revenue neutrality with his tax plan. This claimed goal further illustrates how incredibly confused Romney is about taxation policy. Revenue neutrality would remove the alleged economic stimulative effect of tax cuts, which is the goal of Romney’s taxation plans.

Regarding corporate taxation, the Government Accountability Office found that in 2008, two-thirds of U.S.-chartered corporations didn’t pay any corporate tax; a study of the top 100 corporations in the Fortune 500 found that 25 of them paid their CEOs more than these corporations paid in taxes; and General Electric, which earned $14.2 billion in profits in 2010, paid no corporate income taxes and actually accumulated $3.2 billion in tax credits. It is notable that in the 1950s, corporations accounted for 27 percent of national government revenue and now they account for about a third of that contribution. There is no need to give corporations a major tax break, as, to paraphrase Mitt Romney, they are “doing very well.”

I will close with an illustration that any reader of this blog can do to show how a 20 percent cut in each tax rate benefits the wealthy enormously. This illustration takes three taxpaying households with no minor children, filing jointly. 2011 tax rates are compared to Romney’s proposed rates. Taxable income is as found on line 43 of Form 1040. The couple with $50,000 in taxable income would have tax savings of $990; the couple with $100,000 in taxable income would have tax savings of $3,450; and the couple with $1 million in taxable income would have tax savings of just under $94,000.

After-Debate Coaching of President Obama

In September 2011 I started a blog with the domain name of ashheapobama. My premise was that the Democratic Party should run someone other than Obama, or follow a favorite son/daughter course of action. I thought that Obama would have a hard time getting elected, because of the economic situation and the fact that he had alienated his most enthusiastic 2008 base, not only by breaking many campaign promises, but by having his press secretary attach the label “the professional left” to those supporters who had wanted the change that Obama had championed.

Until the first debate, Obama had run a very good campaign by emphasizing the magnitude of the mess he had inherited and making tax unfairness a central issue. Although I thought that Obama had provided much more substance in the debate than the substance-devoid Romney, the pundits and the polled public declared Romney the early winner. Some pundits described Obama as “too aloof,” “laid-back,” or “passive.” Part of the reason for those impressions is that Obama is characteristically cool and deliberative. Obama did, however, miss some opportunities to expose Mitt Romney as the change-my-mind-every-minute candidate.

One mistake of Obama’s that the talk show host, Bill Press, focused on like a laser beam was the $716 billion cut in Medicare that Mitt Romney referred to three times or more in the debate. Now, Press was not entirely correct when he said that Obama did not contest Romney’s calling the $716 billion a benefit cut. Initially, Obama did say the cut was aimed at insurance companies not providing contractual services and over-charging providers; also, Obama pointed out that the savings would go to close part of the donut hole and provide preventive medical services. Obama should, however, have come back to the subject, introducing it by saying something like, “Governor Romney, you continue to give false information about what you call the $716 billion cut in Medicare benefits. Incidentially, your running mate, Paul Ryan, includes the same $716 billion in his Medicare proposal.” Then, Obama could have concisely described why the cuts were necessary and the uses that would be made of the savings.

President Obama made a gigantic error when he said that he and Romney have about the same position on Social Security. What he should have said is that Romney selected as his running mate a man who believes in privatization of Social Security. After George W. Bush won a second term in 2004, Paul Ryan lobbied him to make privatization a major priority, Bush felt that Ryan’s proposal was too extreme and adopted a more modest version of it. Obama’s point should have been that if the Romney-Ryan ticket wins, a fervent advocate of Social Security privatization would be in the White House.

On Mitt Romney’s taxation plans, I would give President Obama a B or a C. Obama accurately pointed out that if Romney won’t raise taxes on the wealthy, one of two things will happen: 1) the deficit will balloon; or 2) the middle class will be hit with a huge tax increase. He also uttered maybe his best line when he said that Romney had been pushing a large tax cut for 18 months and now he says “never mind.” Obama also said that Romney makes references to elimination of tax preferences but hasn’t identified a single one. A response that would have merited an A from me would have had Obama briefly outlining Romney’s initial position on taxes, then referring to Romney’s speech in Ohio, in which he warned taxpayers not to expect a big cut in taxes because elimination of tax preferences would just about neutralize the cuts. Then Obama could have made the case that Romney vowing not to cut taxes for the wealthy would load a huge tax burden on all other taxpayers. Finally, Obama should have challenged Romney to identify the tax preferences he would either eliminate or reduce.

This would have been a good time to introduce Mitt Romney’s 47 percent reference at a meeting with donors held months, not years ago. Besides pointing out that Romney had disowned the 47 percent, he could have made the further point that Romney’s proposed cut of 20 percent in each tax rate bracket would not have helped those who do not pay federal income tax now. Furthermore, a 20 percent cut in a 35 percent rate results in much more tax savings than a 20 percent cut in a 20 percent tax rate.

President Obama made a very telling point when he referred to the Republican primary campaign event in which Mitt Romney indicated that he would not have accepted a $1 increase in taxes in return for a $10 cut in spending. The reference would have been more telling if Obama had said all the GOP candidates had raised their hands, thus signifying general GOP hostility to any tax cuts. Why not also mention that many GOP lawmakers have taken the Grover Norquist no-tax-increase pledge?

On military spending, instead of just saying that Mitt Romney will increase spending by $2 trillion over ten years, Obama should have specified the major additions that Romney is proposing for the military. To dramatize the magnitude of our military spending,Obama could have mentioned that the U.S., with about five percent of the world’s population, accounts for over 40 percent of world military spending.

President Obama was too passive in response to Mitt Romney’s accomplishment claims as governor of Massachusetts. Massachusetts was ranked 47th in job creation when Romney was governor. Also, it is a former governor, William Weld, who is generally credited with reforming public education. By implication, Mitt Romney took credit for that state’s high standing in public education; however, I believe that Romney cut public education funding by a considerable amount.

President Obama should have introduced Bain Capital as neither a job creator or a job destroyer, as Bain Capital’s mission was to make a good profit.

President Obama’s closing statement has been criticized as insufficiently focused. He should have introduced it as a choice between going forward or backward and then used contrasting positions on taxes, Medicare, and health care as his chief focus — there were the Romney pre-debate and during the debate positions on the Affordable Care Act. Then, to solidify the women’s vote, Obama could have worked in Romney-Ryan positions on abortion, equality of pay and Planned Parenthood.

Shifting focus in conclusion, President Obama was responsible for burdening his debate performance with positions and actions he had taken long before the debate. Nancy Pelosi is described as being furious at Obama for saying that he and Romney have about the same positions on Social Security. Pelosi was also furious, when, during the debt crisis standoff, Obama was on the verge of a “Grand Bargain” with House Speaker John Boehner, which would have involved cuts in Social Security, Medicare and Medicaid. This handicapped Obama in drawing a clear contrast between himself and Mitt Romney.

When Mitt Romney quoted Defense Secretary Leon Panetta as contending that sequestration of military spending would have a devastating effect on the military, it was President Obama who could have prevented Panetta from throwing a roadblock into cutting spending on a bloated Pentagon.

The Building Blocks of a Bloated Pentagon

The Air Force online magazine published an article in the October 2000 issue, which did a backward projection of military spending starting with President Jimmy Carter. Spending was shown in FY 2001 dollars. Seven of President Ronald Reagan’s eight military budgets totaled at least $390 billion and four exceeded $400 billion, with a high of $436.4 billion in FY 1985. None of the other three presidents, Jimmy Carter, George Herbert Walker Bush and Bill Clinton had military budgets in the $400 billion or higher range; furthermore, none of President Clinton’s charted budgets reached even $300 billion, based on FY 2001 dollars.

The decade of the 1990s saw some cutting back in military spending. Due to the demise of the Soviet Union, the 1990s also inspired a number of long-term projections of military spending. The defense analyst Randall Forsberg published two military spending models in 1992, designed to be phased in over 10 years. When fully phased in, one model totaled $79 billion and the other, $86 billion. Forsberg’s more costly model would have reduced the FY 2003 military budget by about 75 percent.

Forsberg’s $86 billion model called for a fairly robust military: 10 strategic submarines carrying 240 nuclear weapons; five active and three reserve Army divisions; eight tactical air wings, with three of them the U.S. Navy’s and over 130 ships and submarines.

The new century ushered in George W. Bush and a sizable uptick in the base Pentagon budget. The Congressional Budget Office calculated a 74 percent increase in the base Pentagon budget, or an average of 8.22 percent a year during President Bush’s two terms.

President Barack Obama has continued the annual increases in the Pentagon budget but has more than halved the annual increases under Bush II. As for the Pentagon’s future funding under President Obama, it  appears that the Pentagon will never need to hold a yard sale. Former Defense Secretary Robert Gates could find only $78 billion in miscellaneous savings through 2015, and another $100 billion in reduced war costs and having military personnel pick up more of their medical costs.

President Obama’s 10-year projection for the base Pentagon budget, submitted with the FY 2012 budget, calls for accumulated military spending of $6.5 trillion.

When Obama rolled out his 12-year budgetry plan to cut the deficit by $4 trillion, he counted only $400 billion in Pentagon savings. Projecting ahead by two years his $6.5 trillion in accumulated 10-year Pentagon spending, would add up to between $7.75 and $8 trillion. $400 billion would be a small percentage cut in that accumulated spending.

The Stockholm International Peace Research Institute put global military spending at $1.6 trillion for 2010. U.S. military spending was put at $698 billion, or 43.6 percent of global military spending by a nation that has about five percent of the world’s population.

The Stockholm group considered only the base Pentagon budget and the costs of the wars in Iraq and Afghanistan. Some defense spending analysts contend that a category called militarily-related spending is a more accurate indicator of spending on the military. These analysts would include the cost of the nuclear weapons complex, which is partly in the Department of Energy budget; part of the intelligence budget; that part of the State Department budget devoted to security at U.S. embassies and other security needs; part of the Homeland Security budget; and that part of the interest on the national debt which pays for unfunded past wars.

The annual cost of this militarily-related spending is put in a range of $800 billion to $1.2 trillion — the latter figure comes from the National Priorities Project. The magnitude of this militarily-related spending cost, pegged at $1.2 trillion for FY2012, is that if carried forward with an annual COL increase of three percent for the duration of Obama’s 12-year plan, would be a cumulative spending total of $17.5 trillion, of which Obama’s proposed $400 billion in military spending cuts would constitute a cut of about 2.3 percent.

Those commentators who focus almost exclusively on cutting Social Security, Medicare and Medicaid as the way to bring down the deficit, are ignoring the frightful long-term cost of militarily-related spending.

                                          –

The Pentagon is following several major strategic pathways: 1) the last Quadrennial assessment elevated fighting an insurgency of violent extremists to the highest planning level; 2) the Pentagon is also engaged in surmounting the major technological challenges involved in creating the electronic, robotic battlefield of the future, once the apple of Donald Rumsfeld’s eye; and 3) the Pentagon is continuing to build the sophisticated weapons systems appropriate to fighting a major peer enemy, such as the Soviet Union once was.

There is a sense of deja vu for elevating fighting an insurgency to the top of the planning list, as about the time Barack Obama came into the presidency, a Defense Department directive put “IW” ( irregular warfare) on a level “as strategically important as traditional warfare,” arguing that for the “foreseeable future, winning the Long War against violent exrtremists will be the central objective of U.S. policy.”

The fact that we are following several major pathways in military planning is linked to the  concept of “full spectrum dominance,” whereby a joint military structure achieves control over all elements of the battlefield, using surface, sub-surface and air space-based assets. Full spectrum dominance includes the eletromagnetic spectrum and information space. Control implies that the freedom of an opposition force to exploit the battlefield will be wholly contained.

It is not difficult to reach the conclusion that total domination of the military sphere is a very costly matter. Given the lack of a peer military enemy; the oceans to the west and east of us; and militarily weak nations to the north and south of us, a much more modest strategic doctrine would save a vast amount of unnecessary military spending.

                                               –

As a final component of this treatment of military spending, a major impediment to the achievement of a much leaner military structure is the belief among major political figures that military spending is a major job creator. When President Obama authorized a major Middle East arms sale, he said it would create 55,000 jobs. Vice presidential candidate Paul Ryan warned in a campaign stop in Pennsylvania that if the current sequestation deal on military spending is allowed to stand, it will cost 44,000 jobs in Pennsylvania.

Economists who study the relationship of government sending to job creation are agreed that a billion dollars spent on such categories as education, health care or renewable energy, create far more jobs than a billion dollars spent on the military.

Why is military spending such a poor job creator? A large share of military spending is done overseas or spent on imported goods; also, more of the military dollar goes to capital, as opposed to labor. For example, only 1.5 percent of the price of each F-35 jet fighter for “manufacture, fabrication and assembly” goes to workers at the plane’s major production facility in Fort Worth, Texas.

Another reason for the poor job creation performance of military spending is that military weapons have no social utility: a cruise missile is destroyed when it destroys its target; a tank doesn’t build anything, such as a construction crane does; and a very expensive jet fighter employs only a pilot and a small maintenance crew.

Overall, the Council of Economic Priorities has found that the more a country spends on the military as a part of the economy, the slower the rate of economic growth, the higher the rate of unemployment and the slower the productivity growth.

 

Bombing, Wars and Nukes

IV. Bombing Iran

Under either Barack Oama or Mitt Romney the United States would be committed to bombing Iran if it achieved or was close to acquiring a nuclear bomb. Obama has said he is not bluffing about bombing if certain red lines are crossed and Romney is, if anything, even more bellicose than Obama about bombing.

Even present and former Israeli security and defense officials are warning about dire consequences from bombing Iran; also, recent polling shows a strong majority of Israelis opposed to bombing. There is a computer model that forecasts up to three million deaths from blast and radioactive effects of bombing Iran’s nuclear facilities, several of them deeply buried.

V. Stopping Wars

President Barack Obama did end the troop commitment to Iraq but he ended it on the scheduled Status of Forces agreement reached by George W. Bush with the Iraqi government. During the 2008 presidential campaign, Barack Obama never gave a hint that a large contingent of troops would be in Iraq for almost three full years after he took office.

As Representative Barbara Lee (D-CA) so energetically and wisely made the case, the Status of Forces agreement with Iraq had all the attributes of a treaty and should have been under treaty ratification provisions in the Constitution. It should also be noted that if the Iraqi government had given U.S. troops immunity from Iraqi law, we would still have from 3,000 to 15,000 troops in Iraq, based on Pentagon projections, agreed to by President Obama.

Although candidate Obama talked about increasing the U.S. troop commitment to Afghanistan, when he got more specific, he talked in terms of a brigard or two — about 8,000 troops at the maximum. He never intimated that the increase might be four or more times greater. Also, even though the current campaign claim is that Obama is ending the war in Afghanistan, there is no firm agreement that all or most U.S. troops will be out of Afghanistan by the end of 2014, or six years after Obama assumed the presidency. The still-not-completed agreement that the Obama administration has reached with the Afghan government has the attributes of a treaty and should be submitted to Congress for ratification. The agreement governs U.S.-Afghan relations beyond the year 2014.

VI. Nuclear Weapons

Although Barack Obama made an inspiring speech early in his presidency about a world without nuclear weapons, all of his actions, with the single exception of the nuclear weapons reduction agreement with Russia, have been to increase our nuclear weapons capability — even pushing back the completion date for the destruction date of warheads called for in previous treaties. He has added many billions of dollars to the modernization program, which will quadruple the capability of the United States to build triggers for nuclear bombs. Built into his long-range planning are a new nuclear weapons-armed bomber, an advanced nuclear missile and a new nuclear-armed fleet of submarines, operational until about 2070.

President Obama’s Emulation of George W. Bush’s Civil Liberties Positions

This is the second in a series of blogs designed to anticipate how President Barack Obama would perform on selected issues if elected to a second term. Because both Obama and Mitt Romney have articulated future policy in only the very broadest of terms, Obama’s future positions on civil liberties must be judged in relationship to his first term record.

II. Civil Liberties

The Obama administration has adopted virtually the entire panoply of the Bush II administration positions on civil liberties. On indefinite detention, the only difference between George W. Bush and Barack Obama is that Obama has proposed a periodic, case-by-case review of those indefinitely detained. Simularily, Obama has adopted Bush’s position on extraordinary rendition, whereby detainees from foreign countries are sent to other countries which have records of employing “enhanced interrogation”– enhanced interrogation means use of totrure.

President Obama has gone beyond Bush in one respect: even Bush did not claim the authority to order the deaths of U.S. citizens. It is appalling imagery that President Obama spends time determining which citizens should be targeted for death.

When Obama administration officials testified in congressional hearings on reauthorizing the most onerous provisions of the Patriot Act, they refused to spell out the administration’s positions in open hearings — they wanted closed hearings to do that. The provisions were reauthorized without any significant changes.

Extending this subject to include Guantanamo and torture, under neither Obama nor Ronney will it  be likely that Guantanamo will be closed by 2016; however, civil libertarians might be more comfortable with Obama, because Romney once said that he wanted to double the size of Guantanamo.

In regard to torture, both President Obama and his strongest supporters have claimed he has not practiced nor authorized it. The claim is very questionable in regard to practice and false in regard to authorization. Both the Associated Press and human rights groups have made convincing cases that there are U.S.-run prisons in Afghanistan which employ some torture techniques. Once more, the administration has turned a blind eye to the Afghan government’s use of torture against its own citizens.

Authorization of torture continues to exist in the Military Commissions Act of 2006. When the act was amended in 2009, it gave detainees more legal rights but there was no change in the provision giving the president the authority to allow the CIA to use torture under a national security rationale.

III. Energy and the Environment

President Obama’s record is very mixed in this topic area. He included significant funding for renewables in the major stimulus funding plan; however, some of that funding, particularly the vehicle battery component of it, was largely money wasted. The EPA has proposed more stringent standards on arsenic and pushed for authority to regulate carbon dioxide emissions. On the more questionable side, the EPA has approved some mountaintop removal plans and opposed others; also, Obama put politics over science when he nixed new smog control rules.

Candidate Obama said he would oppose any further oil and gas drilling leases until the companies drill on lthe leases they already had and then proceeded to greatly expand oil and gas drilling leases. Obama’s current “all of the above” energy policy includes more drilling leases, at least mild support for fracking for natural gas recovery, and “clean coal,” an animal that many energy experts say does not exist.

I previously thought that the higher vehicle gasoline mileage standards that Obama negotiated was perhaps his greatest achievement in regard to both environmental protection and oil usage, but after reading Peter Bergel’s article on the subject, I realize that Obama could have been much bolder. (Peter Bergel is the executive director of Oregon Peaceworks.)

On climate change, President Obama has done nothing of consequence. He does, however, have an edge on Mitt Romney, because Obama at least believes that human agency is a causative factor, while Romney remains unconvinced that human actitivty is a cause.