Republicans hate earmarks, but they love loopholes. Even though loopholes are earmarks on steroids, Republicans and loopholes go together like big contributions and special favors in return for big contributions. Take former Republican Senate Leader and GOP 1996 Presidential Nominee Bob Dole. According to an article in the Chicago Tribune, Dole repeatedly rigged the tax code to benefit his benefactors:
Among the hundreds of tax loopholes introduced or supported by Dole that fell under the rubric of "corporate welfare," one of the most blatant was a tax break he helped craft for the Ruan Trucking Co. of Des Moines. Chairman John Ruan, his family and his corporation are generous contributors to various political funds overseen by Dole. Dole co-wrote an amendment to the 1986 Tax Reform Act specifically exempting "a privately held truck leasing company headquartered in Des Moines" from certain terms of the repeal of the investment tax credit. Estimated savings for Ruan: $8.5 million.
"Between 1993 and April 1995, according to (Federal Election Commission records), Dole flew 187 times on corporate jets owned by his corporate clientele, most of whom had a vested interest in legislation pending before the Senate at the time of the flights." The Archer Daniels Midland Corp. plane fleet, on which he flew 29 times during that period, "is basically at his beck and call."
ADM, also responsible for substantial cash contributions to Dole's causes, is the nation's largest producer of ethanol--Dole was long Congress' most ardent supporter of ethanol subsidies.
Dole's defenders claimed this was "business as usual" and shrugged off apparent quid-pro-quo deals that cost taxpayers and the economy hundreds of billions of dollars. Sadly, this is typical of free-spending, favor-giving deficit chicken hawks.
During the 2008 Presidential election, Americans constantly heard about the horrendous threat of earmarks. GOP Nominee John McCain ranted about them almost as much as Rudolph Giuliani obsessed about 9/11. The Washington Post Fact Checker blew the whistle on McCain's pseudo-crusade for sound fiscal policies:
The Arizona senator is promising to balance the budget by the end of his first term, while simultaneously extending the George W. Bush tax cuts, introducing billions of dollars of new tax cuts of his own, and remaining in Iraq as long as is necessary to stabilize that country. Asked how this miracle will be accomplished, McCain told George Stephanopoulos of ABC News This Week on April 20 that he could come up with $100 billion "tomorrow" by vetoing pork-barrel spending bills. ...
The Office for Management and the Budget came up with a figure for $16.9 billion [for earmarks] in the 2008 appropriation bills. Taxpayers for Commonsense, an independent watchdog group that focuses on wasteful spending, identified $18.3 billion worth of earmarks in the 2008 bills, a 23 per cent cut from a record $23.6 billion set in 2005.
How much of this $18.3 billion could be eliminated is a "difficult question that we have not yet figured out," said Taxpayers for Commonsense vice-president Steve Ellis. The figure includes such items as $4 billion for the U.S. Army Corps of Engineers, which could not be eliminated without halting hundreds of construction projects around the country. Another big chunk goes to military construction, including housing for servicemen and their families, which McCain has also promised not to touch.
Like McCain, Republican House Majority Leader Eric Cantor rails against earmarks, despite their well-established negligible impact on spending. Like Dole, Cantor defends and seeks to expand loopholes. Writing in The Politico, Cantor opined, "the long climb to fiscal responsibility must begin with a few smaller, but necessary, steps." He asserted, "There is no question that earmarks—rightly or wrongly—have become the poster child for Washington's wasteful spending binges. They have been linked to corruption and scandal, and serve as a fuel line for the culture of spending that has dominated Washington far too long. These reasons alone would justify completely eliminating earmarks, but the basis for my position doesn't end there."
If earmarks are that bad, then what does that make loopholes?
Sourcewatch defines earmarking as "the term used to refer to a provision in legislation that directs funds to be spent on specific projects. Typically, legislators seek to insert earmarks that direct a specified amount of money to a particular organization or project in his/her home state or district. This differs from the appropriation of money to a particular government agency, for in these cases the appropriate executive department can exercise discretion as to where and how the funds are spent."
Investopedia defines loopholes as "A technicality that allows a person or business to avoid the scope of a law or restriction without directly violating the law. Used often in discussions of taxes and their avoidance, loopholes provide ways for individuals and companies to remove income or assets from taxable situations into ones with lower taxes or none at all."
Earmarks allow legislators to direct funds to projects. This costs everyone for the benefit of some—estimated at about $17 to $18 billion in a given fiscal year—but includes spending on construction and other projects people need. Earmarks also create jobs and boost the economy. Just because someone calls something an earmark doesn't mean it's unfair or wasteful. On the other hand, loopholes cost taxpayers—and run up the National Debt—much, much more while delivering special favors to well-connected special interests.
According to a headline in the ABC News Blog The Note, Republican Leader Cantor claims he's "open to closing tax loopholes," but only if they're "met with more tax cuts." Cantor said, "preferences in the [tax] code aren't something that helps economic growth overall. But, listen, we are not for any proposal that increases taxes, and any type of discussion should be coupled with offsetting tax cuts somewhere else." He dismissed "the revenues that [President Obama] is talking about [such as] the depreciation scheduled for corporate-owned jets." He conceded that single loophole costs taxpayers "about $3 billion over 10 years." If that's the example he chose for an inexpensive loophole, imagine all the expensive loopholes Cantor chose to not mention!
In any case, Cantor's willingness to trade existing loopholes for new ones is typical beltway baloney. Loopholes are custom-made tax cuts for special interests powerful enough to push them through Congress. Every penny given away via a loophole must be borrowed (adding to the National Debt and Deficit) or else paid for with tax hikes. Republicans hope we're too confused to understand that swapping some special deals for others can never solve the problem! This is rank hypocrisy from Cantor, who rails against earmarks but defends loopholes. Eric Schurenberg wrote in The Fiscal Times, "Individual and corporate tax expenditures now cost the U.S. Treasury more than a trillion dollars a year and account for a third to a quarter of all government benefits and subsidies—without being subject to annual appropriations review. Once a tax break is in the tax code, it continues until specifically excised." He observed, "Lawmakers have to concede that tax credits, deductions, tax deferrals and preferential rates are not the opposite of government spending. They are, as [economist Martin] Feldstein puts it, government spending by another name.' Any serious deficit plan must put them on the table." Since the Republicans refuse to discuss closing loopholes unless they can open new ones, their deficit plan is not serious.
What are some of the loopholes Republicans protect so stubbornly? In a follow up Fiscal Times article, Schurenberg explained, "private equity and hedge fund managers get to treat their income as capital gains and pay the 15% gains rate. Talk about perverse consequences: [Wall Street hedge-fund maestro John] Paulson, who earned between $3 billion and $4 billion in 2008, paid taxes on much of those earnings at a lower rate than his limo driver and maid. The cost to taxpayers: $9.7 billion between 2012 and 2016, according to the CBO." Add to that "employer paid premiums for health coverage, which will cost the Treasury $1 trillion between 2012 and 2016."
Some loopholes cost the U.S. as a moral hazard as well as in lost dollars. Again from The Fiscal Times article: "Writeoffs for White Collar Criminals. It's not easy to convince a court to award punitive damages against a misbehaving business. But when you do, the tax code allows the company to deduct those penalties as an ordinary business expense. 'This is wrong,' says Vermont Senator Patrick Leahy, who has introduced legislation again this year to change the law. 'It undermines one of the primary deterrent functions of our civil justice system.' Criminal negligence may indeed be ordinary business for a company like Massey Energy, owner of the Big Branch mine where 29 miners died in a preventable explosion last year. But taxpayers shouldn't have to subsidize it. Cost: $315 million over 10 years." Republicans protect the "right" of corporate criminals to make all of us help pay their fines, while demanding deep cuts in nutrition programs for children. These are their priorities.
The prohibition on Medicare negotiating drug prices is one of the biggest special favors going. Although not technically a loophole, ending this massive give-away would deliver huge savings for taxpayers. The National Committee to Preserve Social Security & Medicare reports, "The Department of Veterans Affairs (VA) achieves significant discounts on generic and brand-name prescription drugs by negotiating directly with pharmaceutical manufacturers on behalf of its five million beneficiaries. One study by Congressional Budget Office (CBO) found that, on average, the VA pays only about 42 percent of the Average Wholesale Price (AWP)—or the suggested list price—for brand-name drugs." The Committee cites a report by economist Dean Baker of the Center for Economic and Policy Research estimating hundreds of $billions in savings annually.
Republican leaders, including House leader Eric Cantor and their last Presidential Nominee John McCain, demand we eliminate earmarks. They promise doing so will balance the budget and otherwise cure our economic ills, but they block efforts to close loopholes on luxuries like corporate jets and huge giveaways to hedge-fund mavens, big drug companies—even corporate criminals—at taxpayers' expense.
Closing loopholes and ending other giveaways would save taxpayers well over a trillion dollars each year. Cutting wasteful weapons spending, winding down the wars in Iraq and Afghanistan, and calling off conflicts elsewhere would save even more trillions. Letting the unfunded, counter-productive Bush tax cuts expire would save yet additional trillions.
Together, these measures would balance the budget over the next several years and would also let us make needed investments in infrastructure, education, healthcare, and other human needs. This sound fiscal judgment is found in the People's Budget, sponsored by Congressional Progressive Caucus, and authored by CPC Co-Chairs Raul Grijalva and Keith Ellison. So why aren't the "deficit hawks" all aboard this train to prosperity? And why aren't the media praising this common sense approach to paying down debt while creating good, green jobs?
The People's Budget languishes in obscurity. Meanwhile, pundits and reporters heap praise on Paul Ryan, John McCain, Eric Cantor and other fiscal phonies who engineer massive loopholes to reward their fat-cat contributors. In return for millions of dollars in gifts, these Republican beltway bandits deliver trillions of dollars of our money to their buddies. This exposes all their bleating about earmarks and deficits as disingenuous duplicity. If Republicans ever get serious about deficits and debt, they'll turn all the sound and fury they've misdirected at earmarks toward closing—rather than shifting or creating—these costly, gaping loopholes. Until then, all their protestations are just a conservative con job.
President Obama and the Democrats should slam shut as many loopholes as they can find and dare the Republicans to defend these goodies for the greedy on a case-by-case basis. With all the savings, we could lower the deficit and protect Social Security, Medicare and Medicaid. We could rebuild America, roads, bridges, schools, dreams and all. Call your Senators and Congressmember—Democrats and Republicans alike. Demand they vote to close these outrageous loopholes and pass the People's Budget: a progressive, common sense solution to the trumped up debt ceiling crisis. Then we won't need to sacrifice any programs to entice Republicans to increase the debt ceiling. We won't need more debt at all. Isn't that what Republicans say they want?
Mike Hersh is a member of PDA's national leadership team. He serves as the social network coordinator and as state coordinator for PDA Maryland.
When I proposed minimum wage legislation in August of this year, I wanted to do something that would make a real difference in the lives of people who are suffering in our region. I wanted to close the increasing gap in real wages that plagues our country right now. Although I wish we passed a true living wage yesterday, I recognized when I proposed this legislation that we’re simply not there yet politically. But the increase we passed is meaningful and real. Today, Prince George’s County under Council President Andrea...
Marc Elrich Councilmember At-large 29 Nov 2013 Hits:522 Maryland
Recently, a fisherman caught not one but two huge 8 foot long bull sharks in the Potomac River. Scary as that was, a far more deadly threat is looming. If oil and gas companies have their way, they will frack in our state, and poison our water with arsenic, benzine, radioactives and other deadly chemicals. We can't allow this fracking toxic waste in our drinking water.
When someone mentions fracking, you should imagine that da da da music from Jaws--because this is just as deadly. Water treatment facilities cannot cope with such...
Mike Hersh, PDA Communications Coordinator 13 Sep 2013 Hits:402 Maryland
Protesters rally to oppose U.S. action in Syria
A group of peace activists rally outside the office of Rep. Elijah Cummings, asking him to vote against military intervention in Syria. (Kim Hairston/Baltimore Sun video )
He knocked on doors in Ohio for President Barack Obama's campaign last year and is active in Maryland's Democratic Party, but Dave Kunes nevertheless opposes the president on what has become the central issue of his second term: whether to launch a military strike in Syria.
Kunes, a 24-year-old Silver Spring resident, joined several dozen protesters who rallied in Rockville...
ohn Fritze and Matthew Hay Brown | Baltimore Sun 05 Sep 2013 Hits:641 Maryland
Maryland Democratic Gov. Martin O’Malley spoke more candidly than ever Saturday about the likelihood he will run for president in 2016 as he lamented “a crisis of confidence” facing the country.
“By the end of this year, we’re on course to have a body of work that lays the framework of the candidacy for 2016,” he told a handful of reporters over a beer in the Hilton bar here.
The term-limited governor, at his final National Governors Association meeting, noted that he has delivered a series of high-profile talks recently to flesh...
James Hohmann | Politico 04 Aug 2013 Hits:518 Maryland
BALTIMORE–Local labor organizations are claiming victory this week after brokering a pair of agreements that will ensure the use of union labor in every aspect of a new $375 million downtown Baltimore casino project. Backed by special legislation from the Maryland state government, the proposed Horseshoe Casino is expected to create 1,200 permanent jobs.
UNITE HERE and several other unions say they are very close to an agreement with Caesars Entertainment Corp. to smooth the way for the casino's permanent staff to be unionized. The event follows a separate “Project Labor Agreement” deal with construction unions finalized April 2 that specifies...
Bruce Vail | In These Times 25 Apr 2013 Hits:612 Maryland
Maryland has executed only five inmates since 1976, and in March the state legislature passed a bill abolishing the death penalty entirely. Of the 32 states that still have the measure on their books, 13 have not carried out any executions in the past five years. This gradual retreat from capital punishment is celebrated by activists who note that U.S. use of the death penalty, long abandoned by the rest of the developed world, places it in the company of human rights abusers such as Bahrain and North Korea.
Rebecca Burns | In These Times 22 Mar 2013 Hits:360 Maryland
The Maryland General Assembly approved a measure Friday to repeal the state's death penalty.
The House of Delegates voted 82 to 56 Friday to pass a bill already approved by the Senate, according to the AP. Maryland makes the 18th state to ban capital punishment.
Gov. Martin O'Malley (D) is expected to sign the bill.
The AP reports:
Supporters of repeal argue that capital punishment is costly, error-prone, racially biased and a poor deterrent. Opponents say it's a necessary tool to punish those who commit the most egregious crimes.
Maryland has five men on death...
The Huffington Post 15 Mar 2013 Hits:284 Maryland
Shortly after Andy Shallal opened Busboys and Poets on 14th Street NW in 2005, he said he began receiving a stream of e-mails and phone calls from residents of the Takoma neighborhood of D.C. and its Maryland neighbor, Takoma Park, a neighborhood long known for its counter-culturism.
Would Shallal, an Iraqi-American whose opposition to the invasion of Iraq helped put Busboys on the map, consider opening a location there?
The e-mails never stopped, and on Tuesday, Shallal decided that he would answer them by signing a...
Jonathan O'Connell | Washington Post 01 Mar 2013 Hits:576 Maryland
Maryland PDA and other activists called upon Sen. Ben Cardin and Rep. Chris Van Hollen to protect Social Security, Medicare, and Medicaid as well as let tax rates go up for people in the highest income brackets Monday December, 10th.
25 Dec 2012 Hits:687 Maryland
In a state already dominated by Democrats, Maryland voters further consolidated the party’s power Tuesday.
The voters defeated the longest serving Republican congressman, clobbered congressional challengers to six Democratic incumbents, and approved all the ballot measures the great majority of Republican legislators had opposed, including same-sex marriage and expanded gambling.
As expected, President Barack Obama carried the state with 62% of the vote. But that victory – the same margin he won in 2008 – was again won in six big jurisdictions, with Mitt Romney carrying...
Len Lazarick | Maryland Reporter.com 07 Nov 2012 Hits:639 Maryland
By Caitlin Johnston | Capital News Service
ANNAPOLIS — Gay rights activists, religious leaders and politicians are gearing up for two months of campaigning on the Maryland referendum to strike down same-sex marriage legislation that passed in March.
Hot off the political conventions in Tampa and Charlotte, volunteers will be staffing nightly phone banks, canvassing door-to-door and finding ways to make same-sex marriage a personal issue for voters.
“This is not something that’s esoteric or theological,” said Maryland Sen. Allan Kittleman, R-Howard, the only Republican senator to support same-sex marriage. “These are real...
Caitlin Johnston | Capital News Service 12 Sep 2012 Hits:697 Maryland
WASHINGTON—When Marylanders go to the polls in November, the state could become the first to affirm same-sex marriage in a popular vote.
In March, lawmakers in Maryland approved a measure to allow such unions, but it came with a built-in escape hatch: it would not take effect until 2013.
The waiting period was intended as a compromise with opponents of the measure and as an insurance policy for supporters. Lawmakers feared validating marriages for a period, only to have them overturned by a popular vote later, as happened with Proposition 8 in...
Rebecca Berg | New York Times 26 Aug 2012 Hits:858 Maryland
Originally published by the Baltimore Sun, March 19, 2012
A neocon joke, at the beginning of the Iraq war, was: "Anyone can go to Baghdad. Real men go to Tehran." It wasn't funny then, and it isn't funny now. Unfortunately, those "real men" who want to wage war on Iran are making so much noise that they may prevail—and hardly anyone is pushing back. Take Maryland's U.S. senators. Barbara...
Jean Athey and Alex Welsch 16 Mar 2012 Hits:800 Maryland
Hyattsville, MD--Thursday March 15, PDA National Director Tim Carpenter, PDA National Vice Chair emeritus Stephen Shaff, PDA National Deputy Field Director Andrea Miller and I welcomed speakers Rep. Donna Edwards (Md-6), Professor Eric Kingson from Social Security Works, and Alex Lawson from We Act 1480 AM Radio to Busboys and Poets in Hyattsville, Maryland. Current and former PDA National Board Members Medea Benjamin, Joe Libertelli and Steve Cobble, Healthcare NOT Warfare co-chair Donna Smith, and Maryland Senator Paul Pinsky also helped welcome progressives to Prince George's County's newest...
MikeHersh 16 Mar 2012 Hits:1195 Maryland
CALL AND EMAIL Governor O'Malley's Office on Tuesday, March 6th at: 410.974.3901 or 1.800.811.8336 OR http://www.governor.maryland.gov/mail/ with the following message: WE URGE GOVERNOR O'MALLEY TO INCLUDE FUNDING FOR THE MARYLAND WOMEN'S HERITAGE CENTER IN HIS SUPPLEMENTAL BUDGET THIS YEAR!!!
The Center opened its doors in 2010, after 30 years of the Maryland Women's History Project. From the beginning, the Maryland Women's History Project and the Maryland Women's Heritage Center were a public-private partnership. They were initiated and supported by the Maryland Commission for Women, the Maryland State Department of Education and...
Jill Moss Greenberg 05 Mar 2012 Hits:759 Maryland
Baltimore Mayor Stephanie Rawlings-Blake has signed executive order prohibiting police officers from asking people they come in contact with about their immigration status.
"Police are working to make our city safe. We are not working as immigration agents," Mayor Rawlings-Blake said.
The announcement comes just days after Immigration and Customs Enforcement (ICE) said it would begin implementing the Secure Communities program in Baltimore--the controversial federal program that sends booking information from local jails to a joint database shared by the FBI and ICE.
The order bars discrimination against immigrants,...
Jorge Rivas | Colorlines 05 Mar 2012 Hits:940 Maryland
With Gov. Martin O’Malley’s signature Thursday, Maryland joined seven other states that, along with the District, have legalized gay marriage.
A crowd of supporters descended on Annapolis for a scheduled 5 p.m. ceremony at the State House and erupted into sustained applause after O’Malley signed the bill.
Both houses of Maryland’s General Assembly narrowly approved gay marriage last month, ending a yearlong odyssey for the legislation that sidelined many other issues in state government while it occupied center stage.
Thursday’s signing gave O’Malley (D) a chance to bask in...
Aaron C Davis | Washington Post 01 Mar 2012 Hits:784 Maryland
A bill to legalize same-sex marriage won approval in the Maryland House of Delegates on Friday night, capping a dramatic turnaround from a year ago and all but assuring the measure will be sent to Gov. Martin O’Malley (D) for his promised signature.
After a day of emotional and contentious debate, the Democrat-led House voted 71-67 in favor of the bill, sending it to the Senate, which approved a similar measure last year. No senators have announced plans to change their votes.
Maryland is poised to...
John Wagner | Washington Post 17 Feb 2012 Hits:897 Maryland
In the relentless Saturday rain, we visited Occupy Baltimore to see how they were doing after a morning of “wintry mix” (i.e., wet snow) and a night of intermittently pounding rain and temperatures in the high 30s.
Most were apparently huddled in the tents, though a few were out at the food tent, eating donated pizza and talking to passersby.
“It was pretty horrible out here last night,” said William Kutschbach, a Vietnam vet who has been sleeping in the back fountain area at McKeldin ...
Fern Shen | Baltimore Brew 30 Oct 2011 Hits:589 Maryland
Communities all over the United States are reeling from budget cuts. Military contractors, meanwhile, have remained fat and well-fed on the one part of federal spending that so far hasn’t been touched by budget-cutting fever: the Pentagon.
One community recently decided to call attention to this disparity. In Montgomery County, a relatively wealthy Maryland suburb of Washington, DC, Peace Action Montgomery got together with a group of City Council members to craft a simple, straightforward resolution. It urged Congress “to make major reductions in...
Jean Athey and John Feffer 16 Oct 2011 Hits:1183 Maryland
Norman Solomon is running to carry on the work Lynn Woolsey brought to Congress for peace and people.
Rep. Woolsey is retiring, and Norman is hoping to carry on her progressive legacy. You can help this Sunday! Norman has lived in many places, but he was born and raised in Silver Spring, Maryland! Stand up for Norman! WHEN: SUNDAY, October 2, 2:00-4:00 WHERE: David Hart’s place 4519 Cheltenham...
Jeff Cohen 26 Sep 2011 Hits:504 Maryland
PDA joined Fund Our Communities coalition partners presenting a huge town hall meeting at the Civic Center in Silver Spring, MD September 20, 2011. 300 attendees learned about and…
Some 45,000 Verizon Communications workers across the mid-Atlantic went on strike at midnight Sunday, Aug. 7, to protest a proposed contract that would freeze their pensions and require…
Today, Maryland Senator Roger Manno appealed to Health and Human Services Secretary Kathleen Sebelius, urging Administration policy that women's reproductive services be recognized as preventative health services in the new…
Republicans hate earmarks, but they love loopholes. Even though loopholes are earmarks on steroids, Republicans and loopholes go together like big contributions and special favors in return for…
Speaking on the Senate floor, Maryland Sen. Ben Cardin (D) eloquently described why new rules proposed by the National Labor Relations Board (NLRB) last week would help level the playing field for…
Mayors from around the world met in Baltimore this week to set public policy for the billions of people living in big cities, depending on municipal services to…
As more information about the dangers of hydraulic fracturing, or "fracking," (a technique used during natural gas drilling) emerges, more and more cities and municipalities are organizing to…
PDA is organized around several core issues. These issues include:
Each team hosts a monthly conference call. Calls feature legislators, staffers and other policy experts. On these calls we determine PDA legislation to support as well as actions and future events.
State LeadershipMike Hersh
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