Area Republicans Vote Against Raising Minimum Wage

It's a little out of sequence, but among the notable bills being debated by Congress this week was passage of a hike in the minimum wage. If you missed it, it might be because this long-overdue Democratic victory was buried behind the controversy over troop surges. The Fort Worth Star Telegram put its announcement in the business section.

Unlike some of the other bills discussed since the start of this session, North Texans voted on this issue along nearly straight party lines.

On a 315-116 roll call Wednesday, the House voted to increase the federal minimum wage from $5.15 to $7.25 an hour over 26 months.

Voted Yes (in favor of a minimum wage increase)
Chet Edwards, D-Waco
Eddie Bernice Johnson, D-Dallas
Kenny Marchant, R-Coppell (Ed. note: the Star-Telegram article wrongly lists Rep. Marchant as voting against the legislation, while the official record has him voting in favor.)

Voted No (in opposition to a minimum wage increase)
Joe Barton, R-Ennis
Michael Burgess, R-Flower Mound
Ralph Hall, R-Rockwall
Jeb Hensarling, R-Dallas
Sam Johnson, R-Plano
Pete Sessions, R-Dallas
Kay Granger, R-Fort Worth

The minimum wage has not seen an increase in over nine years. In fact, based on buying power, it is at its lowest in over 50 years. During that same nine years, congress has voted itself $31K in pay increases, three times the yearly wage of someone earning the minimum.

So it may surprise you that your Republican congressmen and women would fail to see the benefit of raising the minimum wage standard. It shouldn't. Republicans not only fail to see the need for a raise, they fail to see the need for a minimum wage at all. Here's the quote from the Texas GOP party platform.

We believe the Minimum Wage Law should be repealed and that wages should be determined by the free market conditions prevalent in each individual market. [page 25, 2006 State Republican Party Platform]

Last year, under pressure from Republicans running in close districts, they voted to couple the minimum wage hike with an $90 billion decrease in the inheritance tax for America's wealthiest families, in what one Democratic congressman called

"the kind of cynical ploy that makes Americans lose faith in their government."

That bill passed the House, with Edwards joining Burgess, Marchant and Sessions in supporting the bill, Johnson, Hensarling and Barton opposed and Granger abstaining. It failed in the Senate.

This year, the rationale was that a minimum wage increase must be coupled, in the same bill, with tax breaks for small businesses.

Rep. Jeb Hensarling, R-Dallas, chairman of the Republican Study Committee, said "lucky" workers would see their pay rise to $7.25 an hour, but he predicted that many more will have their hours or benefits cut or lose their jobs.

"In America we can either have maximum opportunity or we can have minimum wages. We cannot have both...."

Well, maybe you can. According to a study by a nonpartisan research group...

Some observers contend that because many small businesses are labor intensive and largely employ low-wage workers, they will experience sharp cost increases when the minimum wage is increased, leading them to reduce employment levels. However, this report examined recent state-by-state trends for small businesses employing fewer than 50 workes and found that employment and payrolls in small businesses grew faster in the states with iminimum wages above the federal level than in the remaining states where the $5.15 an hour federal minimum wage prevailed.

This report also found that total job growth was faster in the higher minimum wage states. Faster job growth also occurred in the retail trade sector, the sector of the economy employing the most workes at low wages, in the higher minimum wage states.

The simplest introductory economics prediction that an increase in the minimum wage will result in job loss clearly is not supported by the actual job growth record. Rather, faced with an increase in the minimum wage, small businesses may have benefited from some combination of higher productivity through improved worker retention and savings on recruitment and training. There may also be a "Henry Ford" effect at work: if you pay workers more, they can buy more, boosting the overall economy, especially among small retail businesses.

Here's the roll call vote. To view Congresswoman Johnson's press release on the bill, click here. The bill still needs to pass in the Senate.

Congressman Burgess Votes Against Fiscal Reforms

Remember Congressman Burgess' proclamations in the run-up to the 2006 election?

I am a strong proponent of a balanced federal budget and an advocate for reducing the size of the federal government.

Well, guess who just voted against modest fiscal reforms? Last week, Congressman Burgess voted against rules that would reinstate pay-as-you-go (a policy that a bill cannot be considered if it reduces the surplus or increases the deficit) and identify all the earmarks in a bill along with their sponsors. Of the Texas delegation, 13 Democrats and 2 Republicans (William Thornberry and Ted Poe) voted in favor, and 17 Republicans voted against. The measure passed 280-152.

So let's take another look at that 2006 campaign promise.

The state of the federal deficit and debt is a sore spot for Republicans, because those who consider themselves true conservatives deplore the profligate spending of the last six years. The Bush administration, aided by ousted House Majority Leader Tom DeLay, presided over the biggest run-up in government spending in U.S. history.

Does this sound like smaller government to you?

Total government spending grew by 33 percent during Bush’s first term. The federal budget as a share of the economy grew from 18.5 percent of GDP on Clinton’s last day in office to 20.3 percent by the end of Bush’s first term.

The deficit (the difference between revenues and expenditures) went from a $284 billion surplus in 2000 to a $296 billion deficit in 2006. George W. Bush has presided over four of the top five largest deficits in U.S. history. (The fifth largest came under his father's administration.)

The federal debt, the amount borrowed by the government to finance the deficits, increased 62% to a sum larger than all the previous administrative debts combined, a staggering $8.5 trillion dollars. That amounts to $28K for every man, woman and child in the U.S. Interest on the debt is now the fastest growing category of spending in the federal budget. The U.S. now spends as much just to pay interest on the debt -- $105 billion per year -- as it spends on Medicaid, which provides health-care payments for poor and uninsured Americans.

Several things account for this fiscal freefall. Funding for the Iraq war, originally budgeted for $60 billion, now stands at $400 billion and rising.

The use of earmarks to "buy" key votes has been unprecedented. The earmarks included in the Energy Policy Act of 2005 amounted to $85 billion in subsidies and tax breaks, including massive subsidies for energy companies, many of whom have since posted windfall profits. The 2005 transporation bill included over 4000 earmarks, pork to prime the pump in key Republicans regions.

But more than any other policy, the extensive use of tax cuts, the majority of which went to the top one percent of earners, contributed to our financial crisis by reducing projected revenues by billions of dollars. The full effect of these policies has yet to be realized.

What role did Burgess play in this financial debacle? Burgess was elected to Congress in 2002. He was not yet serving in Congress when the Iraq authorization for military force passed, but in subsequent votes on appropriations for the war, he failed to demand accountability from either the administration or its contractors for the use of those funds. While lamenting the practice of earmarks, he nevertheless bragged at a town meeting that as long as pork was part of the process, he was not "going to unilateraly disarm." He voted for the energy and transportation bills, even sponsoring an amendment that gives states incentives to toll new roads. He voted repeatedly for tax cuts for the rich, and was one of the key backers behind repeal of the estate tax .

There is one area where spending was reduced. Due to the ballooning of government spending in other areas, Republican budget resolutions sought and received reductions in several domestic programs, such as education and healthcare. In his campaign statements, Burgess indicated he "strongly" supported The Family Budget Protection Act, which would have capped spending on military pensions and benefits and Medicare Part B, among others, amounting to a cut in these programs of over $2 trillion over a ten year period. Thankfully, the bill never became law.

So keep this in mind. When Republicans start talking about smaller government, they actually mean reducing programs aimed at helping middle and lower class citizens in areas such as health care, college costs, and retirement, in order to fund tax cuts for the wealthiest one percent of Americans, and its largest corporations. As a result, the percentage of tax burden for most of us is increasing, while the percentage of taxes paid by America's ruling class and corporations is decreasing.

We are increasingly becoming a nation of haves and have nots, with the highest income inequality among any industrialized nation. The Republican sellout of the middle class helped propel Democrats to power in 2006. The fiscal reforms proposed by the Democrats are a decent start. But no matter how well Democrats respond, we are stuck in a fiscal crisis that will demand tough choices and reduced benefits for all of us. When we're feeling that pain, let's not forget who got us there in the first place.

Why You Should Boycott Snickers

And Campbell's Soup, and Wal-Mart (heck, you do that anyway, don't you?), and all the other companies whose heirs have lobbied the Republican leadership for repeal of the inheritance tax. Because Saturday's shameless one a.m. session really did make a mockery of the term "compassionate conservative."

The Republican Congress is so opposed to raising the minimum wage, stuck at $5.15 for nine years, that the only way they will back a raise for the working poor is to couple it with legislation to raise the cap on the estate tax. Even as they were passing the bill, the Republican leadership acknowledged that its chances for passage were slim, but that's not the point. Elections are just around the corner, and Republicans think they can have their cake and eat it, too.

Representative Jim McGovern, Democrat of Massachusetts, said Republican leaders knew that the tax provisions would surely be killed in the Senate. He accused them of giving their moderate members a chance to go on record in favor of boosting the minimum wage without having to deliver results.

We're covered the Paris Hilton tax cut before, and the reasons why it isn't just unfair and unprogressive, but a disastrous fiscal policy as well. Republicans have been rying unsuccessfully for years to eliminate the tax altogether, but they would settle for raising the cap high enough and lowering the tax rates to the point where it almost never applies. But just in case this legislation doesn't pass, the administration is preparing to try the back door and eliminate the auditors.

Meanwhile eighteen millionaire families and their Republican handmaidens think that a two-dollar-an-hour raise every decade for the lowest rung of the working class must be balanced by a $91 billion dollar inheritance tax cut for some of the wealthiest families on the planet, dynasties who already control $185 billion dollars in assets. Who are these families? The Blethens who own the Seattle Times, the Waltons of Wal-Mart fame, The Mars family of Mars, Inc., the Dorrances of Campbell Soup fame, the Gallos of E&J Gallo Winery, the Nordstroms, and a few other less familiar names.

Not every wealthy heir thinks more tax cuts on inheritance are a good idea.

.... Elizabeth Letzler, an investment manager from New York who will be subject to the estate tax and who spoke at the press conference, “The current estate tax structure should permit any wealthy household to pass on a legacy of financial security, education and family heirlooms to the next generations.” She challenged the families showcased in the report: “Do something spectacular during your life-time investing in the social welfare and well-being of the children and grandchildren at the bottom of the pyramid.” Her daughter Stephanie, also in attendance, said, “If keeping the estate tax means a step closer to a debt-free treasury, a step closer to improved health care, Social Security, education, and every other program that makes me proud to be an American, show me where to sign the check.”

Warren Buffet, who doesn't believe in "dynastic wealth," set the bar for noblesse oblige when he decided to pass along the majority of his estate through the Bill and Melinda Gates Foundation. And a famous blue-eyed actor recently voiced these sentiments:

Paul Newman, actor and founder of Newman’s Own food company, agreed in a separate statement: “For those of us lucky enough to be born in this country and to have flourished here, the estate tax is a reasonable and appropriate way to return something to the common good. I’m proud to be among those supporting preservation of this tax, which is one of the fairest taxes we have.”

So put back that Snickers bar and pass the Newman O's.

Republican Priorities - More Gifts for the Rich

The estate tax reduction bill that the Republican House passed on Thursday was a compromise. If the GOP-led House had its way, there wouldn't be an estate tax, as they have repeatedly proven over the years by passing countless bills to eliminate it. But after the Senate failed last week in its attempt to eliminate the tax altogether, House Republicans are trying the back door.

House Majority Leader John Boehner, R-Ohio, explained their persistence.

"Americans are being taxed almost every moment of their lives. My goodness, when they are dead, do we have to tax them again?"

Apparently, Congressman Boehner has been channeling the deceased and is really feeling the pressure. Who knew?

By a vote of 269-156, the House approved a bill that would eliminate the estate tax on individual estates up to $5 million ($10 million per couple) with annual adjustments. Yeah, you read that right. The same Republican rubber stamps who haven't voted an increase in the minimum wage for nine years, are so concerned Paris Hilton might have to downgrade from a Lamborghini to a Mercedes, that they decided to index the exemption to keep pace with inflation.

The bill also greatly reduces the tax on wealthier estates. Estates of $10-25 million would be taxed at the same rate at those on capital gains, currently 15% but due to rise to 20% in 2011. Why the rate change? It seems an unnecessary charade when the Republicans will obviously fight tooth and nail to keep that increase from ever happening. But by inserting sunset clauses in the reductions, they can mask the true costs of these bills, chronically underestimating the size of future deficits.

Congressional tax experts estimated that if the changes become law, only 5,100 estates would face taxation when the changes are fully in effect in the fiscal year beginning October 1, 2011. The Internal Revenue Service levied taxes on more than 30,000 estates in 2004, the most recent figure available.

Okay, maybe Alice Walton won't get everything she asked for, but the legislation still means billions in savings for America's ruling class. And the rest of us?

The Joint Tax Committee estimated the cost at $283 billion through 2016. But the Center on Budget and Policy Priorities, a liberal think tank, said the full cost would be about $750 billion for the first 10 years it takes effect.....

Rep. Charles Rangel of New York, the top Democrat on the tax-writing House Ways and Means Committee, said it would benefit the "richest of the rich" while adding to the nation's debt and forcing deep spending cuts in key domestic programs.....
"What we're doing today is ... jeopardizing the resources to pay for health care and education, and even our national defense because some of you believe the richest of the rich should be protected from an equitable distribution of tax liability," Rangel said.

And no Republican bill would be complete without a little pork thrown to special interests, so the bill also contains a reduction in timber taxes to increase it's chance of passage in the Senate.

North Texas Congressmen will be holding town meetings this summer all over the metroplex. I think they have a little explaining to do.

All You Need to Know About the Paris Hilton Tax Cut

The Republicans believe that there is no problem facing Americans that a tax cut for the wealthy can't cure. Any crisis, it seems, justifies a tax cut. The response to the 9/11 attacks? Tax cut. Facing war in Iraq? Tax cut. As Tom DeLay noted at the time, "Nothing is more important in the face of a war than cutting taxes."

Last fall the Senate Republican leadership decided that the appropriate response to the devastation of Hurricane Katrina was to reward the ruling class yet again, this time by eliminating the estate tax. But public censure over such a brazen and callous move in the face of a national tragedy, coupled with general disgust at the emerging incompetence of political leadership from the White House on down, actually moved Senator Frist to reconsider. The estate tax bill was shelved, awaiting a more auspicious time.

That time, apparently, is now. And perhaps the timing has less to do with a better opportunity than the perceived lack of it going forward. What chance would such a bill have if the House or the Senate lost Republican majority in this fall's election? So, with the pending marriage amendment as cover, the Senate is considering re-introducing Jon Kyl's bill, dubbed "Death Tax Repeal Permanency Act" by it's sponsors, and the "Paris Hilton Tax Cut" by Michael J. Graetz and Ian Shaprio in their book Death by a Thousand Tax Cuts.

The Senate debate is crucial, because the measure has always been blocked by Democrats in the Senate. The House version, H.R. 8, passed with 99% Republican support, including proud co-sponsors Rep. Ralph Hall and Kenny Marchant. But no one in the House has been a bigger supporter of the repeal of the estate tax than Congressman Michael Burgess. Burgess promotes the fallacy that the estate tax is responsible for the liquidation of businesses and family farms. It would take an entire separate post to to do justice to this argument, but here's the take-away:

The Congressional Budget Office estimates that only 65 farms and 94 family-owned businesses in the entire country would have owed any estate tax in 2000 if the $7 million exemption level that will take effect in 2009 had been in place back then. And the American Farm Bureau could not cite a single family farm that has ever been lost because of the estate tax, according to The New York Times.

The logic of cutting this tax truly cuts at the heart of the idea of a progressive tax plan. Some of business' biggest scions are behind this legislation, including the Waltons, billionaire heirs of Sam Walton.

Eighteen families, including the owners of Nordstrom Inc., The Seattle Times Co., Mars Inc., Koch Industries Inc. and Wal-Mart Inc., that stand to save $71.6 billion in taxes are financing lobbying efforts to repeal the estate tax, according to a study by two groups....
Wiping the estate tax off the books would mean about $1 trillion in lost revenue for the government between 2010 and 2019, according to private and government estimates.

Every time the Bush administration wants to reward the rich patrons who pull their strings, they trot out tired arguments about economic stimulus and the virtues of the free market. Every time they want to cut benefits for the rest of us, they point with justified alarm to the economic state of our government.

The bottom line as far as I am concerned is that we just cut $4.8 billion in Medicaid in February 2006. The President said this just absolutely needed to be done. Yet, right after that, he signed a bill that cut income taxes by $70 billion on dividends and capital gains, and now wants to cut an additional $25 billion per year by repealing the estate tax. All of this being done at a time when our national debt is approaching $10 trillion. Who elected these people?

And if all this weren't enough to convince you of the lunacy of eliminating the estate tax, consider these facts:

House Democrats have released a report detailing the effect that a repeal of the tax would have on the estates of oil company executives and members of the Bush cabinet. According to the report, estate tax repeal would save the estate of Vice President Cheney between $13 million and $61 million, and would save the estate of Defense Secretary Donald Rumsfeld between $32 million and $101 million. The family of retired ExxonMobil chief Lee R. Raymond would receive a $164 million windfall.

What more do you need to know?