Saturday, December 31, 2011

Tax Cuts for the Top 5% - The Budget for 2012

Going forward in 2012, many more Americans will lose their unemployment benefits because of the deep cuts many states have made to their UI programs. Had the top 5% not had the Bush tax cuts for the past 10 years, there may not have been the current budget crisis today, and many of the unemployed might still have jobs...and therefore, may not have even needed jobless benefits.

Also, according to Authur Delaney, despite the two month extension for the payroll tax cuts, the maximum of 99 weeks for unemployment benefits will gradually be reduced in 2012.

Happy New Year to the top 5%, and everybody else be damned.

Click photo to enlarge

bush_tax_cuts.jpg (118131 bytes)

What the Bush tax cuts costs to the U.S. Treasury
First decade of Bush tax cuts

$955 billion

With Obama extension 2011-2012 $229 billion
Proposed extension, 2013-2021* $2.02 trillion
Total cost, 2001-2021 $3.2 trillion

Personal Income Tax Rates

Among the tax provisions enacted by President Bush and extended by President Obama in 2010 were reductions in the top marginal income tax rates, from 36 and 39 percent, respectively, down to 33 and 35 percent. What is a “marginal tax rate?”

A marginal tax rate is the rate at which your last dollar of income is taxed. So, for example, if you’re single and you make $22,000 per year, then your first $8,500 of income is taxed at a rate of 10 percent, and the rest of your income is taxed at 15 percent. In that case, 15 percent is your “marginal” tax rate (Click on chart below for all marginal tax rates and the income levels they apply to).

MarginalTaxRatesGraph.jpg (47877 bytes)

Source: Internal Revenue Service

The top marginal tax rates—now 33 and 35 percent—affect American families making at least $212,301 and individuals making at least $174,401.

According to the nonpartisan Congressional Research Service, when President Bush lowered those top rates, and when President Obama extended them, doing so was almost perfectly “regressive”—that is, the benefits went to the wealthiest Americans.

The 1% & the 99% Number of Households Average Income per Household Average Tax Cut per Household Share of all income in the U.S.
Richest 1% 1.4 million $1,370,662 $66,384 19%
The 99% 140.8 million $58,506 $1,463 81%

* The U.S. House of Representatives passed a budget for Fiscal Year 2012** that would lower the top marginal tax rate again, this time down from 35% to 25%. That budget, introduced by House Budget Committee Chairman Paul Ryan (R-WI), would reduce federal revenues by a total of $4.2 trillion over ten years, a loss that was to be partially offset with $2.9 trillion in cuts to Medicare, Medicaid, Social Security and other earned benefits.

** Congress and President Obama have yet to agree on a budget for 2012, even though the new fiscal year began on October 1, 2011. See: National Priorities Project’s analysis of the Ryan budget proposal and Defining the FY2012 Budget Debate

Taxes on Capital Gains

The tax rates discussed above apply to payroll wages, but there are two other types of income that mostly go to the wealthy and are taxed at lower rates than regular wages: "Capital gains," which are profits earned from selling assets like real estate, and "dividends" earned from stocks, or the sale of stocks after they appreciate. Many times CEOs get stock-options in lieu of cash salaries*, and therefore are not taxed according to the top marginal rate.

Under President Bush’s tax cuts, and President Obama’s two year extension (for 2011 and 2012), capital gains and dividends are taxed at a maximum rate of 15 percent. Effectively, this means taxpayers earning more than $34,500 per year in wages pay a higher marginal tax rate than millionaires and CEOs earning their income from investments and stock-options. In 2007, 80 percent of all capital gains went to Americans earning more than $200,000 per year.

* For more details, see my post: How the 1% bilks the 99%

Corporate Taxes

The official top marginal tax rate for corporations is 35 percent. However, in 2010 corporations paid, on average, just 23 percent of their profits in taxes, after deductions, credits and loopholes.

“Loopholes" are parts of the tax code that exempt certain people, businesses, and activities from standard taxation, and thus cost the government money in the form of lost revenue. While the official marginal tax rate for U.S. corporations is one of the highest in the world, loopholes make effective tax rates much lower than those of peer nations. The Congressional Budget Office found that corporate taxes as a percentage of GDP are lower in the U.S. than in nearly every other developed nation.

In President Obama’s “Plan for Economic Growth and Deficit Reduction,” released in September 2010, proposed changes to corporate taxation would close some loopholes and increase federal revenues by a total of $133 billion over ten years. And yet, if all corporations actually paid 35 percent of their profits in taxes, the government would have brought in an additional $219 billion in 2010 alone.

Corporate taxes have shrunk as a share of total government revenue over time, and that's not because corporate profits have shrunk.. According to the Commerce Department and the Center on Budget and Policy Priorities, corporate profits have grown as a share of national income since 1934, while wages and salaries have declined.

Sourced: Citizens for Tax Justice, Joint Committee on Taxation, U.S. Census Bureau, Internal Revenue Service, and the Congressional Budget Office for www.CostOfTaxCuts.Com and the National Priorities Project in partnership with Citizens for Tax Justice.

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Friday, December 30, 2011

Karl Rove Wrong about 2012 Predictions

Recently in the Wall Street Journal Karl Rove predicted, "Republicans will keep the U.S. House; Republicans will take the U.S. Senate; Rep. Nancy Pelosi and/or Sen. Harry Reid will leave the Democratic leadership by the end of 2012; and both Speaker John Boehner and Senator Mitch McConnell will continue directing the GOP in their respective chambers."

He made no prediction for who would end up as president, but he seems to think that most of us have a very short memory. So I left my comment for Karl Rove at the Wall Street Journal below...

Anybody who's lost their homes and jobs will blame the Republicans because of trade agreements and the de-regulation of the banks (the Gramm-Leach-Bliley Act).

Anybody who now needs food stamps, Social Security, disability, Medicaid, and unemployment benefits just to survive, knows the Republicans will cut these programs...things American workers want and need, but things the wealthy don't need and big corporations don't want.

Anybody knows the GOP doesn't like the Consumer Financial Protection Bureau (to fight bank fraud), the National Labor Relations Board (to enforce worker's rights), OSHA (to provide worker safety), and the EPA (to help keep our air and water free of poisonous toxins), the FDA (to keep food and medicines safe) and the CPSC & NHTSA (for product safety)...things American workers and consumers want and need, but things big corporations and banks don't want.

Any unemployed construction worker who wanted an investment in infrastructure, knows the GOP can't be relied upon to provide those jobs.

Anybody who sees big oil receiving government subsidies, knows the Republicans favor big oil, and that their proposed pipeline takes president over a REAL jobs bill.

Anybody who pays a tax rate higher than millionaires (taxed at only 15% on capital gains), knows the Republicans favor tax breaks for the rich over the middle-class and poor.

Anybody who saw their jobs outsourced overseas for cheap labor knows the Republicans believe in "free trade" not "fair trade".

Any government worker who lost their job knows that Republicans would rather privatize the government sector for profits rather than jobs paying a "living wage".

Any average American worker who belongs to a trade union knows how despised they are by the GOP.

Anybody knows that the Tea Party has been passing draconian voting laws and abortion restrictions (imposing "bigger government"), rather than focusing on the economy.

Anybody knows that the Republicans think that corporations are "real people", and that the Republicans want a corporate "free-for-all" to do whatever it is they wish.

Anybody knows that the Republicans would slash and sacrifice Medicare for the sick and Social Security for the elderly, rather than cut unnecessary and excessive "defense" spending, just to further enrich war profiteers in the military industrial complex.

Income equality is a fair argument to make during a time of record profits and bonuses for multi-national corporate conglomerates, who outsource jobs to the Chinese earning $1 an hour, while at the same time, millions of Americans are left unemployed here at home.

Karl Rove has ignored and maligned the Occupy movement, and is seriously delusional in his 2012 predictions. The word "denial" comes to mind.

And that surprises me, because I've always found him to be a very intelligent man.

Mr. Rove thinks the American people will forget that this time last year the Republicans held hostage unemployment benefits for 1 year in exchange for extending the Bush tax cuts for the rich for 2 more years.

Mr. Rove thinks the American people will forget that earlier this year the Republicans held the full faith and credit of the U.S. government hostage to a government shut down and default.

Mr. Rove thinks the American people will forget that earlier this month the Republicans held hostage again unemployment benefits and a payroll tax cut for the middle-class in exchange for a pipeline that would create very few jobs, but provide more profits for big oil companies who dodge taxes.

Mr. Rove assumes that Americans are stupid and have a very bad memory.

Unlike Karl Rove, I predict that the people won't forget. I predict that Obama wins re-election by a landslide again. And if public sentiment stays the same as it is today, next November the Republicans will lose the House and the Democrats will keep the Senate (barely). Harry Reid may retire but Nancy Pelosi will regain the gavel. Speaker John Boehner will be relegated to the back of the bus.

But either way, I don't see any more Tea Party candidates being elected. I think the American people have already learned their lesson regarding those far-right radicals (buyer's remorse).

It's odd that the Tea Party Republican candidates hate "big government" as much as they do (a population of 312 million people and growing) but yet they want to be the leader of our big government and be on the government dole with a $400,000-a-year salary and live in the taxpayer-funded White House and fly in the taxpayer-funded Air Force One...even though they're already millionaires themselves...but they will still accept the government hand-out.

Name me one piece of legislation Mister Rove, in all the history of the Republican Party, that only benefited the middle and working class and the poor. Name me one law that was introduced and passed by a Republican majority that didn't also have provisions that would benefit big banks, large corporations, and the wealthy more. I'd like you to name just ONE.

I can't think of any, but I have a whole list of ones the Republicans would like to repeal.

Thursday, December 29, 2011

The unemployed didn't just "drop out"

...they were pushed out of the labor force.

In a New York Times article today, titled Instead of Work, Younger Women Head to School, the author writes "Workers are dropping out of the labor force in droves, and they are mostly women."

The author goes on to say "These young women seem to be postponing their working lives to get more education. There are now — for the first time in three decades — more young women in school than in the work force." The article never mentions how many of these young women might have turned to prostitution and/or are working in strip clubs to survive...or to put themselves through school.

Lawyer turns topless dancer to pay the bills: How many have already graduated from school but still can't find work? Hard times push more women to strip clubs: "Among the usual aspiring actresses and dancers, there are more college students, single mothers trailing toddlers, health and office professionals and even a few age-defying grandmothers — all looking for well-paid work."

And how many are coping with the recession by growing and selling pot?

First of all, people don't voluntarily "drop out of the labor force" as the Bureau of Labor Statistics claim. They are just no longer counted after a certain amount of time after their unemployment benefits expire (labeled as "discouraged workers") The New York Times article just helped to perpetuate the myth that unemployed people just "turn on, tune in, and drop out".

Once someone's unemployment runs out, there's no place where one goes to sign in every week to show that they're still actively looking for work. After a certain amount of time the Bureau of Labor Statistics just arbitrarily makes the assumption they "gave up looking for work". But how could the BLS possibly know who's still looking for work and who was evicted and living in a homeless shelter? The BLS just bases their conclusions on who's exhausted all their unemployment benefits.

The Bureau of Labor Statistics denies this, saying they do not get any data from the state's unemployment offices (and rely on bogus household surveys), but yet the BLS posts the exact numbers of those who are receiving state and federal benefits in their monthly reports (subject to change every month when updated).

Secondly, only those who once had a two-income family (like a husband and wife, with one that's employed and earning enough to pay for food, rent, auto loans, car insurance, and school tuition) can the scenario that this article presents be possible. Or maybe the young women who are going to school also live at home with their parents, and they pay for their school and living expenses. Or maybe they work in a strip club.

But they didn't just "drop out" of the labor force, like kids "drop out" of high school. This maligns the unemployed as quitters or failures. As if they "dropped out of society", or voluntarily quit an assigned task, or failed at completing something. As if they were "losers".

In the real world, when some loses their only source of income, they look for a job to pay for food and shelter, unless they have the luxury and good luck to have someone else pay for their living expenses. They don't just "drop out" and casually return to college to improve their jobs skills.

American society has always maligned those who lost jobs and couldn't find employment through no fault of their own: “Three or four million heads of households don’t turn into tramps and cheats overnight, nor do they lose the habits and standards of a lifetime. They don’t drink any more than the rest of us, they don’t lie any more, and they’re no lazier than the rest of us. An eighth or a tenth of the earning population does not change its character which has been generations in the moulding, or, if such a change actually occurs, we can scarcely charge it up to personal sin.” – Harry Hopkins, Federal relief administrator under Franklin D. Roosevelt – 1933

The New York Times article today also says "412,000 young women have dropped out of the labor force entirely in the last two and a half years", but how can that be? Almost two and a half years ago in October of 2009 15.7 million Americans were unemployed when the unemployment rate was 10.2%. Only 412,000 young women are unemployed today?

And since then, all those people have already exhausted all unemployment benefits that they may have once been entitled to and qualified for - - - so most are no longer being counted. Since October of 2009 only 3 million jobs were created, and many more people have been laid off since that time. And now 7.2 million are currently receiving either state or federal benefits.

Also, since October of 2009 six million young people have already graduated from high school or college (not counting drop-outs), and most are still not finding jobs - - but instead, many are participating in Occupy protests.

The number in that New York Times article today is way out of line with reality. And to call them "drop outs" is disrespectful.

Break down:

  • Nearly 18 million Americans have at some point received federally funded extended unemployment benefits since 2008.
  • In October of 2009 the Bureau of Labor Statistics reported that the national unemployment rate was at 10.2% with 15.7 million Americans out of work.
  • In May of 2010 there were 10 million receiving either state or federal UI benefits.
  • In December of 2011 we have 7.2 million who are currently receiving either state or federal benefits, and 13.3 million are current being reported by the BLS as being unemployed.
  • Almost a total of 18 million received UI benefits and 6 million Americans also graduated from high school and college in the last two and half years, but only 3 million jobs were created.

Related Posts:

Where did 15 million jobless Americans go?

Simple Math Proves Jobs Report a Lie

Wednesday, December 28, 2011

Social Security Disability - Last Resort for the Unemployed

More than 10 percent of Americans between the ages of 50 and 65 apply for Social Security disability benefits right after they run out of unemployment insurance.

Unemployed workers with significant and persistent illnesses or injuries can qualify for SSDI despite the fact that some applicants would continue to work if they still had a job.

As more jobless people run out of unemployment insurance, they are turning to a last resort to make ends meet: government disability benefits.

Two new studies cited by The Wall Street Journal find that when jobless Americans exhaust their unemployment benefits, they turn to Social Security disability benefits to survive. The number of Americans receiving Social Security disability benefits has risen to 10.6 million since 2002 -- an increase of 47 percent, the WSJ reports.

With more and more people coming to depend on Social Security, the program's long-term prospects are starting to seem endangered. Most people who start receiving disability insurance stay in the program until they retire, and the average person in the disability program ultimately receives more than $240,000 in benefits, according to a 2006 study by economists David Autor and Mark Duggan cited by the White House's Council of Economic Advisers.

More than 10 percent of Americans between the ages of 50 and 65 without access to $5,000 apply for Social Security disability benefits right after they run out of unemployment insurance, according to the White House's Council of Economic Advisers. By contrast, less than 1 percent apply for the disability program when they are still about 50 weeks away from exhausting their unemployment benefits. A November report by Boston College research economist Matthew Rutledge reached a similar conclusion, finding that jobless Americans are more likely to apply for disability benefits once they are about to run out of unemployment insurance.

Out-of-work Americans are now without jobs for longer than ever. The average duration of unemployment reached a record high of 40.9 weeks in November, according to the Bureau of Labor Statistics. And it's thought that cutting unemployment benefits doesn't only hurt the people receiving them. The United States would lose nearly 500,000 jobs by the end of 2014 if Congress does not continue the extension of unemployment insurance, according to the CEA.

News that jobless Americans are relying on more disability benefits arrives as Social Security is increasingly coming under attack. Texas governor Rick Perry called Social Security a "Ponzi scheme" at a Republican presidential debate, and Rep. Paul Ryan, who many consider an intellectual leader of the Republican party, has said he agrees.

Congress recently agreed to extend unemployment benefits and the payroll tax cut for two months, but as the battle has become more partisan, it is unclear whether House Republicans will agree to extend unemployment insurance for another year.

Per the White House report:

An important potential avenue for leaving the labor force, especially for older job seekers, is to apply for disability benefits through the Social Security Disability Insurance (SSDI) program. SSDI applications generally rise when unemployment is high.

Unemployed workers with significant and persistent illnesses or injuries can qualify for SSDI despite the fact that some applicants would continue to work if they still had a job.

According to recent research, the average SSDI enrollee stays in the program for many years and ultimately receives benefits of over $240,000 (Autor and Duggan 2006). Workers on SSDI rarely return to the labor force, resulting in a loss to society of the economic contribution those workers could have made. Thus, keeping the long-term unemployed in the labor force should be a priority.

Krueger and Mueller (in progress) find that applications for SSDI by unemployed workers older than age 50 increase as these workers get close to exhausting their unemployment benefits. This increase is driven by applications from individuals with limited assets, defined as those who reported that they would be unable to come up with $5,000 if needed to cover unexpected expenses in the event of an emergency; application rates change very little for individuals with greater access to resources.

By providing workers who might otherwise apply for SSDI more time to find a job, EUC and EB apparently keep more of the long term unemployed actively in the labor force and thus increase the potential length of their productive work life.

The extended benefits programs do not appear to have had a differential impact on the relative job-finding rates of unemployed persons who have been out of work for different lengths of time. Job-finding rates are consistently lower for those who have been unemployed longer, but the rates for the different cohorts delineated by unemployment duration have stayed roughly parallel since 2003.

* As reported by the Wall Street Journal, via the Huffington Post

Related Post: Republicans versus Social Security

Small Business Owners: "It's Lack of Demand, not Regulations!"

For one small-business "advocate", it has become an article of faith that “uncertainty” about new regulations and higher taxes is frustrating the ambitions of small-business owners. (Neither are true, or at least, not their #1 concern.)

A “massive federal regulatory nightmare,” is how the head of the National Federation of Independent Business, Dan Danner, puts it on the organization’s Web site, one that “stifles innovation, grinds small businesses down and prohibits job creation.”

And Republicans in the House have used these concerns to wage an aggressive campaign against federal regulations sanctioned by existing law as well as any proposal to raise taxes in order to reduce the deficit. But it turns out that these concerns are not shared by as many actual small-business owners as you might expect.

In a recent poll released by the Hartford Financial Group, when small-business owners were asked to name the single biggest barrier to success, only 9 percent cited government rules and regulations. Just 2 percent cited “too many taxes or uncertainty related to taxes.” The Washington Post reported recently that economists say regulation has little impact on job creation over all. Read the New York Times article: Do Small-Business Owners Feel Overtaxed and Over-regulated? A Survey Says No

In the face of the country’s unemployment crisis, many Republicans have portrayed regulations as the economy’s primary villain.

The Washington Post asks, "Does government regulation really kill jobs? Economists who have studied this question say the overall impact on employment is minimal.

But House Republicans have identified 10 “job-destroying regulations” they want to repeal, and a steady stream of bills have been proposed to block environmental rules governing everything from cement plants to boilers.

GOP candidate Mitt Romney has vowed that on his first day as president, he will “tear down the vast edifice of regulations the Obama administration has imposed on the economy.” The White House, meanwhile, says it is making a determined effort to assess how rules are affecting jobs.

But data from the Bureau of Labor Statistics show that very few layoffs are caused principally by tougher rules. Whenever a firm lays off workers, the bureau asked executives the biggest reason for the job cuts. In 2010, 0.3 percent of the people who lost their jobs in layoffs were let go because of “government regulations/intervention.” By comparison, 25 percent were laid off because of a drop in business demand.

In many cases retrofitting and monitoring plants to meet EPA environmental standards actually creates jobs. In reality, it's really cheaper labor overseas and automation that are the biggest job killers. That, which helped create high unemployment and/or low domestic wages, which reduced "demand". It's not high taxes or federal regulations that's hurting small businesses, never mind the massive corporations.

Large corporations have long complained that spending money following rules means there’s less left over to invest in research or expand their businesses. But recently it was reported by the New York Times that from a CEO's perspective, long-term research and development is a lousy investment. Research projects cost a lot of money and often fail. And even when they do work, some other company can come along and copy all the best ideas free.

A retired CEO of DuPont said it's tough to get investors to think more than two years ahead — at most. “The stock market pays you for what you can do now,” he said. As a result, DuPont isn’t the only American company changing the way it does R&D. Corporate research labs at IBM, AT&T, Xerox and others have also been slimmed way down or cut altogether.

The Republicans argue that getting rid of regulations will directly create jobs. President Obama has heard versions of this argument from powerful business lobbying groups and CEOs.

Economists who have studied the matter say that there is little evidence that regulations cause massive job loss in the economy, and that rolling them back would not lead to a boom in job creation. Firms sometimes hire workers to help them comply with new rules. In some cases, more heavily regulated businesses such as coal shrink, giving an opportunity for cleaner industries such as natural gas to grow.

“Based on the available literature, there’s not much evidence that EPA regulations are causing major job losses or major job gains,” said Richard Morgenstern, a senior fellow at the nonpartisan think tank Resources for the Future who worked at the EPA starting under the Reagan administration and continuing into President Bill Clinton’s first term.

A decade ago, in a landmark study, Morgenstern and others looked at the effect of regulations on four heavily polluting industries — pulp and paper mills, plastic manufacturers, petroleum refiners, and iron and steel mills — between 1979 and 1991.

The researchers concluded that higher spending to comply with environment rules does not cause “a significant change” in industry employment. When jobs were lost, they were often made up elsewhere in the same industry. For every $1 million companies spent, as many as 1.5 net jobs were added to the economy.

The White House has tried to be particularly sensitive about the burden on businesses when rules are added. This year, Obama issued an executive order that agencies pay close attention to how rules might affect employment.

Do small businesses in the U.S. create most of our jobs? According to the Census Bureau the vast majority of small businesses have 9 employees or less. In 2008 there were 27,757,676 total firms.
  • Of these only 21.8% have any employees at all.
  • Of the firms that have employees 78.8% have 9 employees or less.
  • Of the 6,049,655 employer firms in 2007 61.2% had sales receipts of $999,999 or less (so the owner isn't pay themselves a million-dollar salary.)

Jared Bernstein says in a post that most people don't work for small businesses, and that such businesses are not the engine of job growth. He cites 2008 census data, which says 61 percent of American companies are small businesses with fewer than four workers — but more than two-thirds of the American work force is employed by companies with more than 100 workers. You can tweak the definitions, but even if you define “small” as fewer than 500 people (as the federal government does, basically), you still find that half the work force is employed by large businesses.

On Fox News Eric Bolling had said that 96% of the U.S. Chamber of Commerce's members are small businesses. But what he also deliberately failed to mention was that only 11% of all small American businesses actually belongs to the U.S. Chamber of Commerce, which is generally considered to be a conservative organization, and is one of the largest lobbying groups in the U.S., spending more money than any other lobbying organization on a yearly basis. (Read Millionaire Tax Hurts Small Businesses - DEBUNKED!)

Someone like Karl Rove can incorporate himself as a consultant, obtain legal "limited liability" for his personal actions, call himself a "small business", not hire anybody, and join the U.S. Chamber of Commerce. There are many "small businesses" like this.

According to a recent poll released by the Hartford Financial Group, when small-business owners were asked to name the single biggest barrier to success, only 9 percent cited government rules and regulations. Just 2 percent cited “too many taxes or uncertainty related to taxes.” (The Washington Post reported recently that economists say regulation has little impact on job creation over all.)

For years, economists and the Bureau of Labor Statistics and the Treasury Department and countless others have been telling policymakers that business aren't hiring because of a lack of demand for their goods and services, a concept that even Republicans used to understand. But because they don't like Nobel Prize-winning economists and official government data, or because they're intentionally sabotaging the economy for political gain — or both — Republicans have pretended not to hear. Even when corporate executives and small business owners have said lack of demand is the problem, Republicans have pretended not to notice.

Economists from across the political spectrum have also weighed into this debate and reached the same conclusion. Bruce Bartlett, a senior advisor in both the Reagan and George H.W. Bush administrations, said that “no hard evidence” has been offered for claims that regulation is the “principal factor holding back employment.” And in a Wall Street Journal survey of economists, 65 percent of respondents concluded that a lack of demand, not government policy, was the main impediment to increased hiring. (Read the full article at the U.S. Treasury.)

Here's how absurd the GOP's blame-everything-except-demand economic analysis is: A new survey (PDF) of small business owners conducted by the National Federation of Independent Business finds that not only do more small business owners identify lack of demand as the biggest impediment to growth than any other factor, most of those who identify "uncertainty" as an impediment really mean lack of demand.

It's interesting to note that the National Federation of Independent Business favors the standard conservative agenda of lower taxes and deregulation. Indeed, the group has become a purely partisan operation, fighting more for Republican electoral victory than small-business growth. For example, it opposed the president’s jobs bill, even though independent analysts estimated it would significantly increase economic demand, and the federation’s own survey shows that “poor sales” — a k a weak demand — is a much bigger problem for its members than taxes or regulations.

The NFIB's political action committee, SAFE Trust PAC and the NFIB Direct Response Director John Buchanan, claim to be a nonprofit, nonpartisan organization, but they support Tea Party candidates, and the right-wing advocacy organization overwhelmingly supports Republican candidates. It's business partners include the likes of Dell, FedEx, and Bank of America.

But even the NFIB found that "25 percent named "demand" as their single greatest impediment versus 22 percent who named "uncertainty"...and that no "other impediment is nearly as significant." Just 11 percent, for example, named "regulatory or legal issues their most significant impediment," contrary to non-stop Republican rhetoric about onerous government regulations. And only five percent identified a "lack of skilled employees" as their biggest problem. (Engineers in China earn what an employee of McDonalds earns in the U.S., so having a skill or college education doesn't guarantee a job in the U.S. either.)

The Republicans love to claim that "uncertainty" about taxes and regulations is keeping businesses from hiring, so it isn't hard to imagine them taking comfort in the fact that "uncertainty" was the second-most-frequently mentioned impediment to growth — or trying to concoct some excuse for claiming it was really first. So here's where things get interesting: It turns out that when small business owners say "uncertainty" is an impediment to growth, they mean economic uncertainty, not political uncertainty. And by economic uncertainty, they mean uncertainty about demand.

Jared Bernstein also points out regarding job creation that "it’s not small businesses that matter, but new businesses, which by definition create new jobs. Real job creation, though, doesn’t kick in until those small businesses survive and grow into larger operations."

And those larger multi-national corporate conglomerates have an army of well-paid litigation lawyers and tax attorneys to skirt the laws and avoid taxes. At the very most, government regulations might sometimes reign in the CEO's multi-million dollar salaries paid as stock options whenever they increase shareholder value by cutting jobs and paying the least "effective" tax rate for corporate taxes.

It's been proven time and again, for the past two centuries, that the larger corporations have had little-to-no regard about the air we breath, the water we drink, the safety of their products, or worker safety. Their bottom line and profits is their first and only concern. The owners don't build their factories in their own backyards, but usually in impoverished areas where the taxes are low and workers are desperate for work...or where there's little-to-no regulation and where wages are low, like in China.

Without regulations, American children would be poisoned with lead like they are in China.

And remember, those that advocate for big corporations can't also advocate for small businesses (privately owned small entrepreneurships). Whenever possible, small businesses are usually destroyed by their bigger corporate competitors in many different ways for the larger market share, or they are just bought out. Mergers and Acquisitions and legal monopolies are still alive and doing very well in America.

* For more about small business concerns, read this New York Times piece.

My related posts:

Tuesday, December 27, 2011

Republicans versus Social Security

(Excerpted and edited from a post by Jared Bernstein)

You will really learn nothing accurate, or even true, about the nation’s system of so-called entitlement programs from listening to the GOP - - - it’s pure rhetoric. It plucks heartstrings with words like opportunity (good) and entitlement (bad), but we learn nothing about how we as a nation will tackle a basic problem of advanced societies: economic security for those past their working years.

Advanced societies have all implemented solutions that draw some resources from the current workforce to help provide for the current generation of retirees. There’s an economic rationale: the generation that came before helped build the productive infrastructure that produces today’s economic output, so it only makes sense for them to benefit from it.

And then there’s a social rationale: most of us want to provide something–a foundation, not a mansion—for our elderly: we respect the inter-generational contract that is Social Security.

Is Social Security efficient? Very much so; I challenge anyone to identify a private mechanism that is more so.

Mitt Romney railed against an "entitlement society" - When Romney asks, “Will the United States be an entitlement society or an opportunity society?” it is vapid and misleading. It's not just a false choice, but an illogical one. It's just like saying “we must decide whether to grow food or eat food.”

Newt Gingrich proposed allowing younger workers (still decades away from retirement) to bypass Social Security and instead choose private investment accounts that would be subject to stock market gyrations (rather than invest their future retirement in the safer investment of U.S. Treasury bonds in the Social Security Trust Fund).

Ron Paul calls Social Security and Medicare unconstitutional. Michele Bachmann called Social Security "a tremendous fraud". Rick Perry said Social Security is a Ponzi scheme. Paul Ryan wanted to issue vouchers for Medicare so that we would have to fend for ourselves after working and paying into the system for decades.

Government has, and always will, play an integral role in enhancing opportunity, in offsetting market failures that thwart opportunity, from poverty to pollution. Progressives, Democrats, Independents, and all clear-thinking people must not allow this debate to float miles above the real world.

Moderator: And we must not allow the Republicans to dominate the narrative, or believe the multi-millionaire commentators on Fox News...that's would be allowing the fox to guard the henhouse.

GOP Candidates - Millionaires Representing Millionaires - It should also be noted that it's become common knowledge that all these Republican presidential candidates, like everyone in the GOP, represent the interests of large corporations and those earning over a million dollars a year.

And it is no coincidence that they're also all millionaires themselves. They don't want to pay Social Security and Medicare taxes, because unlike the rest of us, they don't need Social Security and Medicare.

And unlike the rest us, who pay these taxes on 100% of our wages and salaries, theirs are capped on the first $110,000 they earn. Not only should we continue these programs when we get too old or sick to work, but we should also eliminate the cap that millionaires currently enjoy.

Paul Ryan lied to his constituents by saying removing the cap on Social Security taxes for the rich wouldn't extend the program.

For years the Republicans have been looking for a way to kill destroy smash end eliminate cut de-fund "reform" Social Security and Medicare, so why would Republican voters vote for a Republican candidate, and vote against their own self-interest?

* Jared Bernstein is a Senior Fellow at the Center on Budget and Policy Priorities, the former Chief Economist and Economic Adviser to Vice President Joe Biden, and a former member of President Obama’s economic team.

Protect Social Security and Medicare

Social Security broke 'cause Nikki Haley is a drunken floozy?

Monday, December 26, 2011

'Anonymous' Hacks Credit Card Data - Gives to Charity

Associated Press—Members of the loose-knit movement "Anonymous" claimed on Sunday to have stolen a raft of emails and credit-card data from U.S.-based security think tank Stratfor, promising it was just the start of a weeklong, Christmas-inspired assault on a long list of targets.

Strategic Forecasting, Inc., more commonly known as STRATFOR, is a global intelligence company founded in 1996 in Austin, Texas by George Friedman who is the founder, chief intelligence officer, and CEO of the company. He wrote the Op-Ed piece Global Economic Downturn: A Crisis of Political Economy

Fred Burton is also STRATFOR's Vice President for Counter-terrorism and Corporate Security. The company's publicity list includes Fortune 500 companies and international government agencies. The hacker group Operation AntiSec made it public on December 24, 2011.

One alleged Anonymous affiliate said the goal was to use the credit data to take a million dollars—including, apparently, from individuals' accounts—and give the money away as Christmas donations. Images posted online claimed to show the receipts.

A Twitter account tied to Anonymous posted a link to what they said was Stratfor's tightly guarded, confidential client list. Among those on the list: The U.S. Army, the U.S. Air Force and the Miami Police Department.

The rest of the list, which the hacking movement said was a small slice of its 200 gigabytes of plunder, included banks, law-enforcement agencies, defense contractors and technology firms.

"Not so private and secret anymore?" the group taunted in a message on the microblogging site.

Austin, Texas-based Stratfor provides political, economic and military analysis to help clients reduce risk, according to a description on its YouTube page. It charges subscribers for its reports and analysis, delivered through the web, emails and videos.

Stratfor said in an email to members that it had suspended its servers and email after learning that its website had been hacked.

"We have reason to believe that the names of our corporate subscribers have been posted on other websites," said the email, passed on to the Associated Press by subscribers. "We are diligently investigating the extent to which subscriber information may have been obtained."

The email, signed by Stratfor Chief Executive George Friedman, said the company is "working closely with law enforcement to identify who is behind the breach."

"Stratfor's relationship with its members and, in particular, the confidentiality of their subscriber information, are very important to Stratfor and me," Mr. Friedman wrote.

Calls to Stratfor went unanswered Sunday and an answering machine thanked callers for contacting the "No. 1 source for global intelligence."

Lt. Col. John Dorrian, public-affairs officer for the Air Force, said that "for obvious reasons" the Air Force doesn't discuss specific vulnerabilities, threats or responses to them. "The Air Force will continue to monitor the situation and, as always, take appropriate action as necessary to protect Air Force networks and information," he said in an email.

Miami Police Department spokesman Sgt. Freddie Cruz Jr. said that he couldn't confirm that the agency was a client of Stratfor, and he said he hadn't received any information about any security breach involving the police department.

Anonymous said it was able to get the credit details in part because Stratfor didn't encrypt them. Hours after publishing what it claimed was Stratfor's client list, Anonymous tweeted a link to encrypted files online. It said the files contained 4,000 credit cards, passwords and home addresses belonging to individuals on the think tank's private client list.

It also linked to images online that it suggested were receipts for charitable donations made by the group manipulating the credit-card data it stole.

"Thank you! Defense Intelligence Agency," read the text above one image that appeared to show a transaction summary indicating that an agency employee's information was used to donate $250 to a nonprofit group.

One receipt—to the American Red Cross—had Allen Barr's name on it. Mr. Barr, of Austin, recently retired from the Texas Department of Banking and said he discovered last Friday that a total of $700 had been spent from his account. Mr. Barr, who has spent more than a decade dealing with cyber-crime at banks, said five transactions were made in total.

"It was all charities, the Red Cross, CARE, Save the Children. So when the credit-card company called my wife she wasn't sure whether I was just donating," said Mr. Barr, who wasn't aware until an AP reporter called that his information had been compromised when Stratfor's computers were hacked.

Wishing everyone a "Merry LulzXMas"—a nod to its spinoff hacking group Lulz Security—Anonymous also posted a link on Twitter to a site containing the email, phone number and credit number of a U.S. Homeland Security employee.

The employee, Cody Sultenfuss, said he had no warning before his details were posted. "They took money I did not have," he told The Associated Press in a series of emails, which didn't specify the amount taken. "I think why me? I am not rich."

One member of the hacking group, who uses the handle AnonymousAbu on Twitter, claimed that more than 90,000 credit cards from law enforcement, the intelligence community and journalists—"corporate/exec accounts of people like Fox" news—had been hacked and used to "steal a million dollars" and make donations.

It wasn't possible to verify where credit card details were used. Fox News, which is owned by Wall Street Journal parent News Corp., wasn't on the excerpted list of Stratfor members posted online. But other media organizations including MSNBC and Al Jazeera English appeared in the file.

Anonymous warned it has "enough targets lined up to extend the fun fun fun of LulzXmas through the entire next week."

* Moderator: Unauthorized charges on a credit card can be disputed and taken off the account holder's bill, and the bank must take the loss. If Congress won't properly regulate, fine, or tax the banks, what better way to redistribute the banks ill-gotten gains?

Sunday, December 25, 2011

As the Population Doubled, Tax Rates have Declined

Since the Bush Tax cuts and two wars, and then later with the economic collapse in 2008, we've had mass unemployment and lower property values. So it's no wonder we now have a budget crisis and a revenue problem, but not necessarily a "spending problem".

Today we have some of the lowest tax rates in U.S. history, yet the Republicans and Tea Party have kept falsely claiming otherwise, saying we are over-taxed...when just the opposite is true. (Historical Tax Rates on the Rich from 1862 to 2011)

More people (with a natural population growth) makes for "bigger government", and why a fair balance of taxation and necessary domestic spending is needed to maintain programs like Social Security and Medicare, while maintaining what's necessary for the defense of the country. But it's in the defense industry where we have the most fraud, corruption and waste.

However, while government (people) continues to grow, corporate tax rates, the capital gains tax rates, and the top income tax rates have been steadily in decline for decades.

But rather than raise the tax rates, or cut anything in defense spending, the Republicans want to cut and privatize programs that we paid all our lives into, such as Social Security and Medicare.

If we just taxed people on their annuities, trust funds, gifts, dividends, estates (generation-skipping), and capital gains on stock trades as REGULAR INCOME according their top marginal federal income tax brackets, wouldn't that be fair? (How the 1% bilks the 99%)

Because of the many loopholes in the U.S. tax code, on average, the largest U.S. multi-national corporations and banks already pay a lower effective tax rate in corporate taxes (14% to 18%) than they would in China (25%). It's not over-regulation or taxes that keeps businesses from hiring, they just don't have to.

And shouldn't we tax Kim Kardashian and Paris Hilton their fair share? (Gift Taxes on the Fabulously Rich)

In 1950 we had a population of 152,271,417 with a top corporate tax rate rising to 52%. The top marginal rate for income was 91% and capital gains was taxed at 25%. (Tax rates during the Fabulous Fifties)

In 1977 capital gains on stocks (etc) was taxed at 49% (Historical Tax Rates on the Rich from 1862 to 2011), now it's only 15%.

Today in 2011 we have a population of 312,827,260 (double from 60 years ago). Corporations are paying an average "effective" tax rate of less than half they than did in 1950. (Low Wages Kills Jobs, Not High Taxes).

Historical Corporate Tax Rates:
From 1969
(the highest) to the Present (near lowest)
Year/s Tax Rate
1969 52.8%
1970 49.2%
1971 - 1978 48%
1979 - 1986 46%
1987 40%
1988 - 1992 34%
1993 - 2011 35%

Currently the top marginal rate for "regular" income is 35% (before deductions) and capital gains is taxed historically low at 15% (Capital gains is where the top 1% earns most of their income).

The GOP and Tea Party wants "smaller government". Do they mean they want less people?

Year U.S. Population (Size of government)

Tax Rates

(Not including estate and gift tax rates)

1913 97,225,000 The Revenue Act of 1913 - The Tariff Act imposed the federal income tax following the ratification of the Sixteenth Amendment. Less than 1% of the population paid federal income tax at the time. From 1913 to 1921 capital gains were taxed as ordinary income until 1922.
1922 110,049,000 The top marginal rate on individuals fell from 73 to 58% by 1922, but preferential treatment for capital gains was introduced at a rate of 12.5 percent (and was never this low again until the Bust tax cuts in 2003).
1950 152,271,417 The Revenue Act of 1950 increased the top corporate rate to 45%. The Korean War induced Congress to re-impose an excess profits tax, effective from July 1950 to December 1953. The tax rate was 30% of excess profits with the top corporate tax rate rising to 47%, then later to 52%. Top marginal was 91% and capital gains was 25%
1964 191,888,791 The Revenue Act of 1964 - Reduced top marginal rate from 91% to 70%, reduced corporate tax rate from 52% to 48%.
1978 222,584,545 The Revenue Act of 1978 reduced individual income taxes, reducing corporate tax rates (the top rate falling from 48% to 46%), effectively reducing the rate of taxation on realized capital gains to 28%.



The Tax Reform Act of 1986 - The top tax rate was lowered from 50% to 28% while the bottom rate was raised from 11% to 15%. Capital gains rates were 28%.
1997 267,743,595 The Taxpayer Relief Act of 1997 - The top capital gains rate fell from 28% to 20%.
2011 312,827, 260 George W. Bush tax cuts since 2001 and 2003 - The top corporate and top marginal tax rate is now 35%. Capital gains is only a mere15%.

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Saturday, December 24, 2011

Defending the FedEx Driver

Just before Christmas 2007, package-delivery company FedEx was slammed with a $319 million tax bill. The Internal Revenue Service ruled the company had misclassified about 13,000 drivers as independent contractors when, the IRS said, they really were employees.

Federal Express, whose presence in Washington is as ubiquitous as its delivery trucks, is experienced at exploiting loopholes to evade tax liability. Unlike its main rival UPS, FedEx classifies the men and women who drive its trucks as independent contractors, thereby obviating the company of the obligation to pay employment taxes.

The company is also an expert at avoiding income taxes. When it recently reported $1.9 billion in profits, it used 21 different tax havens to trim its tax liability to less than .0005 percent of its income.

FedEx also spent 42 times (4200%) more on lobbying Congress than they did in taxes. See US Uncut

FedEx’s success in getting favorable tax treatment is due in part to its successful efforts to influence lawmakers with lobbyists on Capitol Hill. The company’s PAC and employees have given $8.7 million in federal campaign contributions over the past ten years, with $797,000 of it going to members of the tax committees in the House and Senate. The company also spent $71 million in lobbying expenditures during that same ten-year period.

What got the IRS and FedEx into a tussle was the package company's assertion that drivers were contractors who operate their delivery routes as independent businesses, even though the drivers use FedEx equipment, wear FedEx uniforms and work under explicit FedEx rules.

The government argued that mis-classification of workers deprives it of billions of dollars of tax revenue annually. The Government Accountability Office has estimated the amount at $4.7 billion a year.

The FedEx bosses argued that a ruling against FedEx would upset precedents that have been in place since the 1990s.

Worker advocates counter that employers have gone too far in pushing taxes and payroll costs onto workers, effectively forcing them to subsidize their bosses.

And UPS drivers get paid more than FedEx drivers - - UPS drivers are Teamsters Union members - - FedEx does not have any union in the company except for its pilots. But if a company will cheat the government on taxes, they'll also cheat their employees.

And does FedEx also over-work their employees?

For years corporate America has been bragging about "increased worker productivity". Companies have kept wages down by doing more with less. They eliminated positions and scaled back on their payroll by delegating extra duties to their workers, and never compensating them for the extra work (Or else they were out-sourced to countries like China for people willing to work for $1 an hour).

The bosses will rarely give you a "thank you" or a warm pat on the back for a job well done, even after piling up the extra work on their employees. Instead, if someone complains, the boss reminds them of how lucky they are to even have a job. Sometimes they'll subtlety threaten them by saying, "Well if you can no longer do the job, we might have to find someone else who can."

Is that what happened to this guy in the video below?

I don't condone the man's behavior but I can certainly understand the frustration of being over-worked and under-paid, just to increase the value of a CEO's stock-options for performance for profits. I think millions of Americans feel this frustration today, and why so few have empathy for the unemployed because of their own personal hells that they're going through on their jobs.

Most of us are under a lot of pressure at work, but we try to handle the pressure, and not to take it out on the customers - - it's unethical and is disrespectful...and could cost us our jobs. And no company wants employees like that. But people are also human, and the young man's actions may have been taken out of context. As far as we know, he otherwise might have been a likeable guy and model employee until this incident was caught on tape.

Maybe there had been a prior altercation...maybe the customer had been rude, demanding, and insulting in the past. We might never know. But even though that in itself doesn't present an excuse for the young man working for FedEx, because maybe he could have simply left the box at the gate (if it was open) and/or rang the bell (if it worked).

And with record deliveries this year, FedEx may have been under-staffed and everyone was working under a great deal of pressure to accomplish their assigned tasks. Especially around the holidays when package volume increases exponentially.

The YouTube user goobie55 who posted the video said that his monitor, not surprisingly, arrived broken and had to be returned. But a well-placed security camera left him with a bit of retribution. After posting the clip, the video quickly went viral, receiving over 5 million views in just five days.

Judging by the wide arched drive-way, the tall iron fence, and the well groomed street, the customer didn't look to be hurting financially, and the monitor was insured and replaced by FedEx; so I consider it to be only a minor inconvenience for the customer when compared to the FedEx driver's livelihood. He may have children to feed.

FedEx's Senior vice president of U.S. operations Matthew Thornton said that FedEx has met with the customer, who has accepted the company’s apology. “This goes directly against all FedEx values,” Thornton said.

Thornton also said that because of employee privacy rules, he cannot disclose what will happen to the deliverer, noting only that he is “not working with customers” at the moment. (I hope he gets off with only a stiff warning.)

If fair wages were paid with more reasonable expectations of what an average human being is capable of doing well, instead of constantly pushing for ever more, there might be less burn-out on the job and more people loving the work they do...and doing it better, with less complaints from everyone.

And maybe people wouldn't go "postal".

Friday, December 23, 2011

The End of 99 Weeks for UI Benefits

UPDATE: January 4, 2012 - As far as I can tell, the UI cuts are coming from EB (State extended benefits), which come after federal extended benefits expire (EUC). In Nevada I think it's going down from 20 weeks of State benefits to 13 weeks. SEE THE GRAY BOX AT THE END OF THIS ARTICLE FOR MORE DETAILS.

Someone I know in Nevada was on EUC and was just approved for only 13 weeks of EB, even though Nevada has a 13% unemployment rate. We were trying to find out why she didn't get all 20 weeks even though she got the max in regular State benefits (26 weeks) and four tiers of EUC (53 weeks) - - - 20 more weeks of EB would have given her all 99 weeks, but for some odd reason she'll only get 92.

Regular State    3,611,966
EUC                 2,926,135
EB                      571,848

SOURCE (scroll down) The Bureau of Labor Statistics claims they get no information from State unemployment offices when determining the unemployment rate, yet they have these numbers.

POLITICO: "Congress passed a two-month extension of the payroll tax break on Friday, sending the compromise bill to President Barack Obama, who will sign it into law. The bill cleared on a quick voice vote in both chambers of Congress with no objections. The deal only came after House Republicans relented Thursday afternoon and agreed to pass the two-month extension as long as Senate Democrats appointed conference committee negotiators. The legislation also includes an extension of unemployment benefits [the funding of the federal program for those who might normally qualify] a fix to Medicare reimbursement, and a tweak to the payroll tax system to help small businesses."

But the bill also marks the beginning of the end for a maximum limit of 99 weeks of unemployment insurance. Although the deal reauthorizes federal unemployment programs, it does not make a change needed to prevent the loss of 20 weeks of benefits in most states over the course of 2012. The reduction in benefits represents Democrats' quiet embrace of part of the GOP's proposed reforms to the unemployment insurance system.

"We couldn't get it done otherwise," Senate Majority Leader Harry Reid (D-Nev.) said on the matter during a press conference.

On top of that, the House plan is loaded with riders that have nothing to do with unemployment, payroll taxes, or jobs.

Shortly after the House vote, the White House announced that Obama would give a statement at 12:15 p.m. and then, less than an hour later, leave for Hawaii, where his family awaits to celebrate the holidays. I heard his statement: It was brief and he didn't take questions...and he never mentioned cutting 20 weeks of UI benefits for the unemployed. Merry Christmas Mister President.

Seemingly everyone but Arthur Delaney at the Huffington Post had overlooked the fact that this short-term stopgap allows extended unemployment benefits to expire in several states:

A top ranking Democrat in the House of Representatives on Tuesday defended his party’s support for cutting 20 weeks of unemployment benefits, a position that has escaped much notice in the payroll tax cut debate consuming Washington.

Democrats want the House to pass a Senate bill that would postpone the January expiration of federal unemployment programs for two months. But even if it is reauthorized, one of those programs will automatically phase out next year, unless Congress changes federal law to allow states to keep it, a provision not included in the Senate bill [...]

The Extended Benefits program is the last stop on the unemployment insurance train for the very long-term jobless. It provides up to 20 weeks of assistance to workers who exhaust 53 weeks of federal Emergency Unemployment Compensation and 26 weeks of state benefits. But the Extended Benefits program is only available in states where the unemployment rate has risen significantly over the past three years. Unemployment has remained stubbornly high since 2008, but it hasn’t risen, which will make most states ineligible for Extended Benefits early in 2012.

It stuns me that the mainstream media or all the congressional politicians never mentioned this in any if their talking points.

It was re-affirmed again by Arthur Delaney when he writes how the Democrats defended the 20-week cut: A top-ranking Democrat in the House of Representatives on Tuesday defended his party's support for cutting 20 weeks of unemployment benefits, a position that has escaped much notice in the payroll tax cut debate that has consumed Washington for the past few weeks.

"There are things in this bill as we pointed out that we had to make concessions on," House Minority Whip Steny Hoyer (D-Md.) said Thursday in response to a question from the Daily Delaney Downer. "That's the process. We understand that. Unfortunately there are an awful lot of tea party activists who were elected to the Congress who don't understand compromise. That provision is one of the provisions that Rep. Sander Levin (D-Mich.) had concerns about."

As the only member of Congress who seemed previously to be irked by this, House Ways and Means ranking member Sander Levin has been appointed as a conferee in the House-Senate conference on the long-term bill. Hopefully he will make this a priority. He recently called the provisions in the Senate bill “wholly inadequate.”

And because the “look-back” on the Extended Benefits provision is three years, unemployment hasn’t increased in most of those states under the time requirements, which means that the 99ers will fall back to the 79ers -- but could gradually be reduced to the 59ers by the end of 2012. Here's how it is now until December 31, 2011.

26 weeks regular state-funded benefits
Tier I - up to 20 weeks Federal benefits
Tier II - up to 14 weeks Federal benefits
Tier III - up to 13 weeks Federal benefits
Tier VI - up to 6 weeks Federal benefits
     =  79 weeks sub-total
up to 20 weeks State Extended Benefits ( SEB )
= 99 weeks total MAX combined benefits

Originally, the Senate bill changed this to a four-year look-back, which would have preserved Extended Benefits in the high-unemployment states. As it is, it’s probably going to phase out, unless it gets changed in the one-year version before the end of February next year.

But 11 states will lose access to Extended Benefits in just the next two months – Minnesota, Michigan, Massachusetts, Maine, Oregon and Indiana in January, and Wisconsin, Tennessee, South Carolina, Rhode Island, and Ohio in February.

Important: Your State Unemployment Office website will have details on who qualifies for extended benefits and when and how benefits will be paid.

Just like the Republicans refer to ObamaCare as "socialized medicine", they think anything the government does collectively for the good of all is Socialism. To them, Medicare and Social Security is also Socialism. They think unemployment benefits is robbing from the very wealthy (or from those who have jobs) to give to the very lazy (those without jobs). And for those who rely on TANF (the very poor), this is the worst form of Socialism.

But yet, at the same time, the GOP also thinks that subsidies for the very wealthy, Michelle Bachmann, big tobacco, or big oil is perfectly OK. They believe that making the corporations in the defense industry fatter than they already are is perfectly reasonable in this post cold war era. They also believe that by not supporting these subsidies is somehow "un-American". Just as the CEO of ConocoPhillips.

And why are the Republicans so adamant about defending and protecting the very banks that caused this recession?

In January 2009 a Republican sponsored bill called for a complete payroll tax holiday, meaning the tax rate would be reduced to ZERO. The current version, meanwhile, would keep the rate at 4.2 percent, rather than allow it to return to the pre-2010 level of 6.2 percent. (Presently it would cut the employer's contributions even more, by half to 3.1 percent). So why had the Republicans been against it now?

The GOP's current "jobs bill" is just more of the same: blaming the poor and unemployed for our economic problems, and included goodies to benefit big oil and corporations. Here is H.R.1745 (the Jobs, Opportunity, Benefits, and Services Act of 2011) that was proposed by Republican Dave Camp (Midland, MI) PDF. If you're a lawyer, you might understand it. Example:

(a) IN GENERAL.—Section 1202(b)(2) of the Social
4 Security Act is amended—
5 (1) in subparagraph (A), by inserting ‘‘and’’ at
6 the end;
7 (2) in subparagraph (B), by striking ‘‘, and’’
8 and inserting a period; and
9 (3) by striking subparagraph (C).
10 (b) EFFECTIVE DATE.—The amendments made by
11 subsection (a) shall take effect as of the date of enactment
12 of this Act.

The GOP's bill includes spending cuts in government programs – not tax increases on "job creators" – to fully pay for extending the current payroll Social Security tax relief and unemployment insurance "reforming" entitlement programs....such as cutting the total number of weeks for unemployment benefits. (See the bill at Speaker.Gov)

The bill permanently "reforms" the federal unemployment insurance program. The bill uses a two-step process to gradually reduce current maximum weeks of benefits, first from 99 to 79 weeks, then to 59 weeks. The GOP says that unemployment services should "focus on helping Americans get back to work". Even the Wall Street Journal, admits in its headline that jobs are scarce.

Currently Nevada (Democratic Senator Harry Reid's state) has the highest jobless rate of 13%.

But Republicans seem to think that the unemployed are just lazy...even unemployed Republican voters. Republican Senator Orrin Hatch of Utah says: “I don’t see why you have to go more than 59 weeks...they just stay home and watch television.”

Republican Senator Jim DeMint (South Carolina Tea Party) said we should not extend unemployment benefits because "people are gaming the system and refusing to take jobs because they get unemployment benefits and food stamps."

There are dozens of examples of this attitude coming from the GOP, even though there are currently only 3 million jobs available for 27 million unemployed Americans if you count all the "discouraged workers. And in a country this large, how do you match 3 million people with skills with the jobs being advertised...especially if they're bound to their location by a rental agree, lease, or mortgage? Or they no longer have the funds to re-locate to another city or another state?

But regardless, extended compensation DOES NOT discourage the jobless from seeking out new work. A new report that finds workers who are eligible for benefits search for work more vigorously than workers who are not eligible.

"Since Congress enacted federal unemployment benefits, time spent looking for a job has tripled among the long-term unemployed who are out of work as a result of job loss," the report says. (PDF) (Article)

The amount of time the long-term jobless who are eligible for benefits spend looking for work increased 203% compared with previous years. For unemployed workers who are likely ineligible for benefits (because their unemployment was not caused by job loss) the amount of time they spent searching for work increased only 120%.

The GOP's jobs bill also requires all state and federal UI recipients to be in a GED program if they have not finished high school (with exceptions for older workers), and participate in reemployment services to help them get back to work. (Like working two months for free under the Georgia Plan).

That should be both discriminatory and illegal, as people who have already paid into the unemployment insurance system should still be eligible, as those restrictions weren't in place before they were laid off from their jobs.

The GOP's jobs bill also allows states, if they desire, to perform drug screening and testing as a condition of providing UI benefits. Without probable cause, this should also be discriminatory and illegal as it doesn't apply to others who also receive federal dollars, such as those receiving government contracts, grants, and salaries, such as government workers.

Why don't we drug test members of congress and CEOs? Will everyone receiving Social Security also be subjected to mandatory drug resting? Why would the states want the burden of this added cost?

As part of the GOP’s Plan for America’s Job Creators, the measure also includes several other key provisions. One is that it accelerates a decision from Obama on the Keystone XL energy pipeline, requiring, within 60 days, for the permit to be granted unless the president determines the project is not in the national interest. (The Republicans, always concerned about big oil.)

The GOP claims that the measure "will create thousands of American jobs and increase America's energy security." The proposed Keystone XL tar sands pipeline would carry the dirtiest oil on the planet from the Canadian tar sands across our country to ports and refineries along the Texas Gulf coast...from there it could be exported anywhere in the world.

The oil will most likely will be speculated on by investment banks like Goldman Sachs on the commodities market, driving up the price, and then sold to China. It won't be sold to us for "dirt cheap" and stored in our reserves.

The Keystone XL project would provide, at most, 6,000 temporary construction jobs, very few of which would be local hires, according to an analysis performed by the U.S. State Department.

Cornell University's Global Labor Institute did its own evaluation, concluding that the project would employ between 2,500 and 4,650 construction workers. "Most jobs created will be temporary and non-local," the institute says.

Even TransCanada, the Canadian pipeline company that wants to build the pipeline, has said it would create "hundreds" of permanent jobs. That's what TransCanada's vice president for pipelines, Robert Jones, told CNN a few weeks ago.

Other goodies in the GOP's "jobs bill", provisions that they dangle as "jobs" for their reason for this bill:

  • The measure extends 100 percent business expensing through 2012 [continue corporate loopholes]
  • Adds the EPA Regulatory Relief Act (H.R. 2250) which lowers the tax on businesses from 35% to 25% and allows them to bring back their overseas profits without being subjected to taxation (or lower taxation at 5.25%)
  • Ratify trade agreements with Colombia, Panama, and South Korea [outsourcing more jobs for cheaper labor]
  • Making it easier to obtain visas [for the importation for those with degrees for cheaper labor]
  • Less FDA restrictions for the medical device approval process and fees for prescription drugs [more profits for unsafe products]
  • American Energy Initiative by passing legislation to expand energy exploration and production [more oil profits]
  • Adopting a budget that reduces government spending by almost $6 trillion over the next ten years [by cutting Social Security and Medicare but not defense spending]
  • Repeals $8 billion in ObamaCare {who cares about poor sick people?]
  • "Reforms" the Temporary Assistance for Needy Families Program by closing the current “strip club loophole” to ensure that welfare funds cannot be accessed in strip clubs, liquor stores, and casinos by blocking welfare electronic benefit transfer (EBT) cards from working in ATMs there. (I live in Las Vegas and cheap meals can be found in some casinos.)
  • Changes the co-pay structure for civilian federal retirees ["structure" must mean "cuts" "reform".]
  • Prohibits millionaires from receiving unemployment insurance and food stamp benefits (This one, I like.)
  • And of course they want the tax breaks for the rich made permanent.


Other quick facts about extended unemployment benefits (as of December 2011):

  • According to a new report by the Obama administration, 17.9 million Americans have received federal EUC and state EB benefits since the inception of the programs in 2008. Currently 3 million are receiving EUC and 600,000 are receiving EB. SOURCE
  • If you include other household members, more than 50 million people have benefited from EUC and EB, including almost 13 million children. About 1.3 million of these people might have lost their benefits by the end of January 2012. By the end of 2012, an additional 5 million people could exhaust their benefits. The White House Report - PDF
  • Robert Redford writes: "Should we extend middle class tax relief and unemployment benefits at a time when our workers are struggling with hard times?"
  • 7.4 million Americans are currently receiving either regular state or federal extended unemployment benefits. SOURCE
  • 27 million unemployed Americans will not benefit at all from any amount of a Social Security tax cut. SOURCE
The article in the Huffington Post: "Due to the timing of increased joblessness, in January, the program will expire in Minnesota, Michigan, Massachusetts, Maine, Oregon and Indiana. In February, Extended Benefits will drop off in Wisconsin, Tennessee, South Carolina, Rhode Island, and Ohio, according to an analysis by worker advocacy group the National Employment Law Project."

In the HuffPo Hill Newsletter yesterday - "NIGHT DOWNER! Extended unemployment benefits for the very long-term jobless are expiring this month in Minnesota, Michigan, Massachusetts, Maine, Oregon and Indiana, per agreement between congressional Republicans, Democrats and the Obama administration."

Besides Minnesota and Tennessee (which I find no mention of the two month extension), it appears the other states will still have benefits for another 2 months. I went to all their state's UI websites and provided the links below. 

The websites, as expected, were obtuse with their information and difficult to navigate. I had to use their search engines in two instances to find information. I believe all 50 states make filing for benefits as difficult and as confusing as possible to discourage filing for unemployment claims.

People who file UI claims in the states listed below are probably much more familiar with the websites and know their situation better that me.

Minnesota - There are two extended benefits programs in Minnesota. Federal Emergency Unemployment Compensation (EUC) – Congress has moved the phase out to the end of February 2012. Federal-State Extended Benefits (EB) – will "trigger off" at the end of the week of January 8th through 14th. You cannot be paid for weeks after the program "triggers off". If you are receiving benefits from the EB program, you will not be paid for weeks after January 8th through 14th.

Michigan - Congress has passed and the President has signed an extension of the expiration dates for the Extended Benefits (EB) and Emergency Unemployment Compensation (EUC) Programs through February 2012.

Massachusetts - The Temporary Payroll Tax Cut Continuation Act of 2011 extends the expiration dates of the Emergency Unemployment Compensation (EUC) and federal-state Extended Benefits (EB) unemployment insurance (UI) programs. The legislation extends the deadlines by which claimants can apply for EUC and EB benefits through March 6, 2012 but does not add any new weeks of benefits.

Maine - Congress and the White House have come to agreement on a two-month extension for federal unemployment programs. Without this extension, the Emergency Unemployment Compensation (EUC) program would have begun to phase out and the Extended Benefit (EB) program would have ended in early January. This extension means that the these programs will stay in effect for the next two months. The legislation did not add more weeks of benefits; it only extends the amount of time available to file a claim for benefits from these two programs. 

Oregon - On Friday, December 23, 2011, the President signed a bill extending the Emergency Unemployment Compensation (EUC) extension program. The bill does not add additional funds, or tiers, to the EUC program; it extends the filing dates in which an individual can apply for EUC, or move on to the next tier. The extension allows individuals to file a new EUC claim, or to establish a new tier of benefits, through the week ending March 3rd, 2012.

Indiana - Congress has approved a two-month extension of the federally-funded extended unemployment insurance benefits. If you are currently receiving unemployment insurance benefits, you may continue to file your weekly voucher as normal.

Wisconsin - Under federal law, Unemployment Insurance (UI) benefit extensions were set to expire on March 3, 2012.

Tennessee - Unclear, no info found.

South Carolina - State Extended Benefits prolong benefits up to 13 additional weeks. State Extended Benefits are available if you have exhausted all regular unemployment insurance and all Emergency Unemployment Compensation, First, Second, Third, and Fourth Tier on or after February 15, 2009. 

Rhode Island - In January 2012, the Federal Emergency Unemployment Compensation (EUC) program will begin to phase out. EUC is built on four tiers of benefits, with claimants completing one tier before advancing to another. Under the phase-out plan claimants will be allowed to continue to collect on their current tier of benefits, but will no longer be able to advance to the next benefit tier.

Ohio - The legislation extends deadlines for the EUC program from December 31, 2011 to March 10, 2012. Eligible individuals may continue to collect benefits until August 15, 2012. This program continues to offer a maximum of 53 weeks of extended unemployment benefits. The new legislation did not add any more weeks of benefits.