Budget

Minority Parties Get Feisty in Budget Battles

Bumpy roads ahead! (Flickr/401K)
Legislatures in Washington state and Virginia have both garnered plenty of national attention for their fights over culture wars—the push to recognize gay marriage and the controversial debate over requiring pre-abortion sonograms. But with their lawmaking sessions winding down, both states are in the midst of epic budget battles, that will almost definitely force them into special sessions. In both cases, parties out of power are using the budget debates to leverage their positions, gambles with big potential risks and payoffs should they succeed. In Virginia, the state Senate is split evenly, 20-20. However the chamber is run with a tough conservative bent, thanks to a tie-breaking vote from the Republican lieutenant governor. Republicans rule the chamber and have their pick of committee chairs. Senate Democrats argue they're shut out of committee chairmanships and don't have nearly the power they should, given their even numbers. The lieutenant governor cannot vote on the budget,...

Jan Brewer's Case for Government Spending

(Flickr/Gage Skidmore)
It was the finger jab heard round the world. Normally finger jabs do not make noise, but I'm confident that Arizona Governor Jan Brewer got even the air's attention as she stuck her digit at the president when the two met on an airport tarmac in January. Brewer has developed a strong reputation as a conservative—she championed Arizona's controversial immigration bill, among the most extreme in the country. She's pushing for a measure now to give public workers a 5 percent pay increase—so long as they give up their job protections. So far, fairly typical Republican stuff, right? Here's the curveball. In the past, she's pushed for increasing taxes and Tuesday she criticized state Republican lawmakers for offering a budget without enough spending for healthcare and education. Arizona House Republicans offered a state budget Monday with $200 million less than the budget Brewer proposed . As the East Valley Tribune reports , Brewer's spokesman called the plan "short-sighted and reckless."...

Road to Nowhere

Congressional Republicans propose bizarre ways to bring the Highway Trust Fund back from debt.

(Flickr/daBinsi)
The best place in the country to appreciate the marvels of our interstate highway system is heading west out of Denver on I-70 in Colorado. The road climbs and dips at a steep grade, taking cars across the Rockies, a range that includes some of North America’s tallest mountains. Fifty or so miles out of town, the Eisenhower-Johnson Memorial Tunnel, which takes travelers underneath the continental divide, marks the highest point in the entire interstate system, at 11,155 feet. Building the first of the memorial tunnel’s two bores, the one named after Eisenhower, cost more than $100 million, an extraordinary sum at the time. The worst place in the country to appreciate anything at all about the country’s highways system right now is Capitol Hill. The transportation bill the House is working on contains a $260 billion budget. The funds are not for building highways but to maintain them. For years, a gas tax fed the Highway Trust Fund. But that tax has not been adjusted for inflation, and...

A Ride to School, Brought to You by Disney

(Flickr/redjar)
Ah, the old days when school buses were yellow, slow, and smelled funny. With state budget cuts to education around the country, more buses may soon stop being so yellow and instead become traveling billboards. (I'm guessing they're still going slow and smelly.) Legislatures in Florida, Missouri, and Kentucky are all considering bills to allow school buses to sport advertisements on the sides. In all three states, proponents argue that so many cuts to education budgets, the opportunity for more revenue can't be ignored. "My idea of a school bus is a little yellow school bus with happy children riding down a country road with a dog barking at the back," explained a Florida senator sponsoring the bill, according to the Orlando Sentinel . "Unfortunately, we're in times where we have to find every penny we can." Lest you think lawmakers are simply turning children over to the advertisers, the proposals don't allow alcohol and tobacco products to be advertised. But in Missouri, where the...

Greece's Desperate Measures

A budget agreement reduces the minimum wage and cuts pensions.

(AP Photo/Thanassis Stavrakis)
After days of intense negotiations during which its membership in the eurozone seemed to hang by a thread, Greece finally reached an agreement today on the measures that will accompany the new loan package from its European partners and the International Monetary Fund. The measures agreed on are draconian. They include a 22 percent cut in the monthly minimum wage, reducing earnings from 751 euros to 586 euros per month. For people under 25, it will be even lower, down to 511 euros, and any increase before 2016 is ruled out. In addition, further reductions to the minimum wage may take place in July. Meanwhile, all automatic wage increases that are included in collective-bargaining agreements will be frozen until unemployment falls below 10 percent (it is currently at 20.9 percent). Employers are also considerably strengthened in their bargaining position vis-à-vis the unions through changes in arbitration regulations and a contraction of the time period (from six to three months)...

In Case You Were Underestimating ALEC's Role

Florida Representative Rachel Burgin recently filed a pretty typical bill for a conservative Republican, asking the federal government to lower corporate taxes. But there was one thing that made Burgin's measure a little unusual: It began by stating the mission of the American Legislative Exchange Council (ALEC). That's likely because Burgin's bill had its origins with the corporate-funded nonprofit. Most Americans have never heard of ALEC. The innocuously named group offers a meeting ground for conservative state legislators and corporations. The organization boasts nearly 2,000 members and partnerships with almost 300 corporations and private nonprofits. The "partnerships" give major businesses the opportunity to shape policy in states around the country. Last year, The Nation embarked on a six-part series called "ALEC Exposed," investigating the group's overwhelming influence on everything from deregulation to privatizing education to killing off unions. But much of the group...

Under Threat of Greek Default

The European Union outlines a budget pact in the shadow of economic disaster.

AP Photo/Virginia Mayo
BRUSSELS, BELGIUM —The specter of Greek default haunted Monday’s informal European Union summit. Despite valiant efforts by EU leaders to focus on promoting growth and jobs, an issue they finally seem to have woken up to, and on finalizing the new fiscal compact agreed on last December, Greece’s debt odyssey hovered menacingly over the proceedings. And, as if the Greek situation were not enough, nerves were further frayed by the evolving Portuguese disaster. As talks were under way in Brussels, ten-year Portuguese bond spreads were reaching euro-era highs of more than 15 percent amid growing fears that the Iberian country would follow in Greece’s footsteps and restructure its debt. The most significant development coming out of the summit was the agreement on the specific terms of the new fiscal compact, which aims to enforce greater budgetary discipline among signatory countries. But the Czech Republic opted out of the new pact during the negotiating process, citing nebulous...

Newt's Final Frontier

JACKSONVILLE, FLORIDA—I'm an avowed space nerd who would love nothing more than to see a human land on Mars during my lifetime. So last night's debate was the most entertaining for me of the unending series in this year's election. Thanks to vapid moderation from CNN's Wolf Blitzer, the majority of the debate was devoted to personal life questions better suited for Oprah's couch than a debate stage. He ended the night by asking the candidates why they were the most electable candidate, essentially requesting each of them to offer a shorter version of their usual stump speeches. One of the few moments where the candidates actually engaged on policy was when the discussion turned to space; specifically the bold vision Newt Gingrich had announced the day before during an event along the Space Coast. Gingrich defended his plan for a lunar colony and a Northwest Ordinance for Space while his opponents harrumphed, claiming it was impractical during a time when Republicans are eager to see...

Has Hell Frozen Over?

Last week, I mentioned California Gov. Jerry Brown's state of the state address , which argued for more moderate approach to education and investments into infrastructure like high-speed rail. Perhaps most shocking, however, is that Brown's plan calls for some slight tax increases. And since California requires voters to approve such increases, Brown is embarking on a campaign around the state to convince people it might not be such a bad idea. In the world of political strategy, this sounds ludicrous. Except that it just might work. A poll from the Public Policy Institute of California shows over 68 percent of California likely voters support Brown's tax proposal. And it's not just Democrats; 65 percent of Republicans favor the governor's plan. According to the LA Times Brown's plan to wallop the well off—individuals earning $250,000, couples making $500,000—pleases the middle class. Raising the sales tax, the governor hopes, will neutralize the business lobby, which mostly fears...

What's the Matter with Kansas, Tax Edition

While around the country, many Republican primary voters are up in arms that Mitt Romney only paid about 13 percent of his income in taxes last year, in Kansas, Governor Sam Brownback is pushing a proposal that would not only benefit wealthy Kansans but raise taxes on the state's poorest residents. A new report released yesterday argues that the plan will benefit some large corporations but fail to create jobs. The plan gets rid of a number of tax deductions—including those for home mortgages and charitable giving. It also takes away the earned-income tax credit and food-sales tax rebate. As the AP noted last week: According to the Department of Revenue's own figures, the only class of taxpayers that would see an increase in its aggregate income tax burden would be the one with people whose incomes are $25,000 or less, while the largest percentage cut would go to the group with incomes exceeding $250,000. As a group, the lowest-income taxpayers actually get a net payment from the...

Look Who's Downgraded Now

The reappraisal of Austria's and France's credit ratings shows that the Greek economic crisis is at high-risk of contagion.

AP Photo/Remy de la Maviniere
Friday was another very bad day for Europe’s crisis managers. Within the space of a few hours, it was revealed that talks between Greece and its international creditors had reached a dead end and were being put on hold and that Standard & Poor’s had downgraded nine eurozone countries, including France and Austria, which formerly held AAA ratings. Both developments are alarming, but the Greek situation is the more immediately pressing. The Institute of International Finance, whose managing director, Charles Dallara—a former high-ranking Treasury official under Ronald Reagan and George H.W. Bush who has lately made Athens his home away from home—issued a statement Friday afternoon saying that “discussions with Greece and the official sector are paused for reflection on the benefits of a voluntary approach.” The main sticking point, according to people familiar with the talks, is the level of the interest rate to be paid on the new, lower-principal bonds that creditors will get in...

Hungary Games

The country is seeking help from the IMF even as its internal policies scare off investors.

Hungarian Prime Minister Viktor Orban. AP Photo/Tamas Kovacs
T amas Fellegi, Hungary’s chief negotiator with the International Monetary Fund, has a tough task this week. Fellegi, a minister without portfolio in Viktor Orban’s right-wing government, is in Washington for preliminary talks with the IMF, in the hopes of setting the foundations for a new package of financial support that will prevent the country’s descent into the Hades of default. This new package, which Orban had previously stated would not be needed, was made necessary in part because of the dramatic deterioration in the economic outlook of the whole of Europe as a result of the eurozone debt crisis and the inept way it has been handled. But the Hungarian government shares responsibility for its predicament: Through its policies in the last year and a half, it has made investors particularly jittery. Critics, whose ranks are rapidly swelling and which include the U.S. administration, argue that the problem is not just one of economic policy. In their view, Orban’s reforms,...

Mitt the Unassailed

AP Photo/Elise Amendola
Manchester, New Hampshire —Well, that was unremarkable. The last presidential debate until another begins ten hours from now saw none of Mitt Romney’s challengers actually challenge him. His toughest challenge probably came from George Stephanopoulos, who asked him if his assertions on Bain Capital’s job creation were really on the level—neither Newt, Ron, Jon nor the two Ricks, confronted Romney with anything as potentially threatening to his lead. Part of the problem, as my colleague Jamelle Bouie has pointed out, is that a number of these guys don’t really seem to be running for president. Ron Paul, who took off two-and-a-half days between the Iowa caucuses and his arrival in New Hampshire yesterday afternoon, is simply running to spread the libertarian word, and take shots at his inconstantly conservative rivals (focusing tonight on Rick Santorum—not Romney). Paul had a good night pitching to libertarians and anti-warriors. Santorum had a good night, too, but it’s not likely that...

Pruning the Pentagon

(AP Photo/Pablo Martinez Monsivais) President Barack Obama, center, shakes hand with Vice Chairman of the Joint Chiefs of Staff Adm. James A. Winnefeld Jr., left, and Sec. of Defense Leon Panetta, right, at a news briefing on the defense strategic guidance at the Pentagon, Thursday, Jan., 5, 2012. Looking on are Sec. of the Army John McHugh, far left, and Commandant of the Marine Corps Gen. James F. Amos, far right. Y esterday, President Barack Obama crossed the Potomac River to hold a press conference at the Pentagon, the first time a president has addressed reporters from the military’s headquarters. Flanked by Defense Secretary Leon Panetta, Joint Chiefs Chairman General Martin Dempsey, and other senior military leaders, the president introduced the findings of a nine-month review of U.S. military strategy that will guide how the Pentagon allocates defense dollars as military spending slows following a decade of war. The review, which calls for a leaner, more agile military and a...

Hitting the Ground Running

Richard Cordray wastes no time introducing a financial supervision plan with the Consumer Financial Protection Bureau.

Republicans are still huffing and puffing about President Barack Obama’s recess appointment of Richard Cordray to head the Consumer Financial Protection Bureau, but that hasn’t stopped the new director from getting right to work. Cordray announced Thursday the launch of a nonbank supervision program to supplement the agency’s monitoring of banks. In layman’s terms, a "nonbank" is a business that doesn’t accept deposits but provides financial services that include pay day loans, credit ratings, debt collection and some mortgage lending. Until now, most of these nonbanks have operated without federal regulation. The new supervision program will be equipped to investigate them and enforce rules. After months of cooling his heels while Republicans blocked his nomination, Cordray can finally address some of the predatory lending and usury that led in part to the financial crisis.

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