Grover Norquist has never been elected to office yet Republican politicians are pledging their obeisance to him. Norquist is one of the most powerful unelected men controlling US politics. His motto is "I want to shrink government down so small that I can drown it in the bathtub." Elected representatives are supposed to swear an oath to uphold the Constitution; instead they are swearing an oath or, if you prefer, making a pledge, to Grover Norquist that they won't vote for any legislation that will raise taxes. BUT, there is a big exception looming on the horizon. As it turns out, Norquist is ambivalent whern it comes to raising taxes on poor and working people. President Obama wants to extend a temporary tax cut of 2% on employees' share of FICA or social security taxes, but Republican politicians are balking. The FICA tax is a tax that affects mainly poor and middle class workers. There are no deductions or exemptions so everyone that works for a living pays FICA taxes on the first dollar they make. Even if they make less than $5 a year they will pay FICA taxes on that $5. On the other hand the rich only pay FICA taxes only on the first $106,000. of their income. Anything they make over that, they pay no FICA taxes on at all. Hedge fund managers and others whose income is mainly capital gains - in other words unearned as opposed to earned income - pay absolutely nothing in FICA taxes. Self-employed people are especially screwed by FICA taxes as they pay both the employer's and the employee's share or in other words double which presently amounts to 15.3%. This double payment for the self-employed is thanks to President Reagan and Alan Greenspan. They invented the social security Ponzi scheme which involves taxing the working class, transferring the money to the General Fund (so income taxes need not be raised on the rich), and then piling up worthless IOUs in the Social Security Trust Fund. The fact that they are worthless can be easily deduced from the fact that Republican politicians now say social security needs "reform" although $2.5 trillion supposedly exists in the Trust Fund, a fact they will never mention.
This is from oregonlive.com:
The most telling Republican reaction to the president's proposal to extend the lower rate has been one man's equivocation. The man is Grover Norquist, author of the anti-tax-increase pledge that the vast majority of House Republicans have signed. On Tuesday, pressed by a number of journalists (most prominently, The Post's Greg Sargent) to state his position on raising the payroll tax, Norquist sought to quietly steal away. "One would have to see the final legislation," his spokesman, John Kartch, told Sargent, to determine "what is the net effect on total taxes."
But unless Congress votes to extend it, the lower rate will expire on Jan. 1 regardless of its effect on total taxes. Norquist flat-out opposed letting the Bush tax cuts expire - though he did tell The Post's editorial board that it didn't technically violate the pledge, a position that he has since tried to obfuscate. Now that the payroll tax is slated to expire, though, Norquist is lost in contemplation (or something). Congressional Republicans inclined to increase the payroll tax - and I'm not aware of any who have come forth to oppose that idea - can do so, apparently, without fear of being labeled tax-increasers just because they've increased taxes.
So Republicans are showing their true colors - they don't mind tax increases on the poor and middle class, but they will never vote for tax increases on the rich. The Bush "temporary" tax cuts which affected mainly the rich will never be allowed to be temporary if Grover Norquist or the Republicans have anything to do with it because Grover has proclaimed that any increase in taxes due to the end of a "temporary" tax cut is in fact a tax increase, but this logic doesn't apply to the increase in FICA taxes caused by the expiration of the "temporary" 2% tax cut. None other than Michelle Bachmann, who abhors tax increases, has objected to the extension of the FICA tax cut due to the fact that "we can't afford it." Oh, but we can afford the much more costly Bush tax cuts which are due to expire at the end of 2012. If Obama loses the Presidency in 2012, how much do you want to bet that the Bush tax cuts will be made permanent? Bachmann has also said that we can't afford any additional unemployment benefits. We just can't afford it.
Obama needs to come out and call the Republicans out in no uncertain terms about the game they are playing: give every advantage to the rich while taking away anything that benefits the poor and middle class. Is this class warfare? You bet it is. Democrats don't need to shy away from the term. And yet Obama wants to make believe that Republicans in Congress really want to do what's best for the American people. The only American people they represent are the richest American people, and why Obama wants to play this silly game that they are really well-meaning and want to come up with good legislation that benefits everybody if only all parties are willing to compromise, I can't fathom. They particularly will do nothing that will improve the economy or create jobs because their whole goal is to have Obama be a one term President. The best way to insure that in their minds is to eliminate jobs wherever possible. That is why Republican Governors are laying off public employees and starving state budgets as much as they possibly can. The resultant loss of jobs is adding a couple of percentage points to the unemployment rate.
The Republican plan for a jobs program is to give tax breaks to the rich because they are the JOB CREATORS. Every time Obama hears that rationale he needs to proclaim: "Not true. They are the JOB DESTROYERS." The so-called job creators have been in the process of destroying American jobs and relocating them overseas where labor is cheaper for years! The U.S. economy has 3.2 million fewer jobs today than it did when President George W. Bush took office, including 2.5 million fewer manufacturing jobs. The Washington Post reports that corporations cut 2.9 million U.S. jobs and added 2.4 million jobs overseas over the last ten years. When they say JOB CREATORS, we say JOB DESTROYERS. Call them out. Tell it like it is. The Republican plan to create jobs will actually destroy even more jobs while making the wealthy even wealthier while immiserating the middle class and the poor.
Here's what Obama needs to do. In conjunction with the Federal Reserve, create an infrastructure bank that doesn't require any Congressional approval. If the Fed can pump money into the large banks surely a method can be devised for the Fed to fund an infrastructure bank. Then Obama can use that money to pay for badly needed infrastructure projects all over the US. This would create jobs directly and not require any Congressional approval, because if Obama thinks Congress will approve any program that would create even one job, he's kidding himself and the American people. His compromising days should be over. The handwriting is on the wall. He will get nothing passed through Congress in the next year and until after the 2012 elections. He may as well take an ideological position as the Republicans have done and at least educate the American people about what the stark alternatives are. And in order not to be totally impotent as President he needs to create jobs totally and entirely by executive order. He shouldn't waste his time and spin his wheels negotiating with Congress. His "jobs program" should be mainly talking points to educate the American people because there is no chance any part of it will pass Congress. Then he should circumvent Congress and use executive orders to create jobs directly.
Another executive order Obama could give would entail demanding that Federal contracts actually be given to small businesses instead of being diverted to large corporations. This could create a de facto jobs program entailing some $200. billion a year. This is not rocket science and it is something Obama could do independent of Congress:
The Small Business Act defines a small business as independently owned. That definition excludes any publicly traded companies. Also, when determining if a business is small, the number of employees of any parent company and all affiliates must be considered. Therefore, no Fortune 500 firm or publicly traded firm can be considered a small business.
Yet, in fiscal year 2010, 61 of the top 100 small business federal contractors were actually large firms. During a July Senate hearing aimed at discovering why large corporations like Lockheed Martin received billions of dollars in small business contracts, Senator Claire McCaskill expressed dismay that the SBA had allowed this to happen. She said it is "time for all of us to take a hard look at the way the government does business."
I could not agree more. If President Obama wants to create jobs and stimulate the economy, a simple executive order stating that government agencies can no longer report contracts awarded to publicly traded companies as small business contracts would suffice. Considering the federal acquisitions budget is around $1 trillion, this would redirect upwards of $200 billion per year in existing federal infrastructure spending to small businesses and the middle class.
The key phrase is "existing federal infrastructure spending," which means it does not require new taxes or new spending. This is money that the government currently spends. President Obama just needs to redirect it to companies capable of creating jobs. Furthermore, it would solve a ten-year-old contracting scandal that has been covered by virtually every major newspaper, television and radio outlet in the country.
That brings us back to Grover Norquist and the question why should elected representatives of the people in a democracy take a pledge to some unelected power broker whether it's Norquist or Rush Limbaugh or the Koch brothers. Before money comes to completely dominate the American political system, someone needs to stand up for the little guy and point out the truth about what's going on. And I think Obama should be that guy. He needs to abandon the fiction that compromise is the way to go, the way that will produce results. It should be clear to him by now that compromise will produce nothing except his own political emasculation and ignominious defeat in 2012. Obama needs to take matters into his own hands in terms of job creation and that means using his power as President to use executive orders to get the job of job creation done.
