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With all the discussion swirling with regard to Jonathan Gruber, the stupidity of the American voter, and the funny scoring of Obamacare by the CBO, it’s worth it to note that CBO trickery is still ongoing.
Hats off to The Weekly Standard last month for delving into the question of true Obamacare costs. The Senate Budget Committee (SBC) took the time to analyze the Congressional Budget Office (CBO) projections related to Obamacare and this is what they found:
**”The Congressional Budget Office (CBO) has not actually scored the deficit impact of Obamacare since the summer of 2012″.
Why is this the case? Is it to leave rosier information available to the public so Obamacare backers can continue to peddle positive talking points and obfuscate the financial impact of this legislation?
The most recent CBO scoring was done using the 2013-2022 ten year budget window — and the estimate was that Obamacare would reduce the deficit by $109 billion at that time. So the SBC took the same growth rate used to tabulate that projection and applied it to a new, more relevant 10 year window, 2015-2024.
The SBC found that the surplus would have grown to $180 billion for 2015-2014… ”if nothing had changed in the interim” . And that’s the key. So much has changed in with regard to Obamacare in the last two years that the surplus will now be a deficit — but they don’t want you to know that yet.
What has changed since the summer of 2012? We had the fumbled rollout of the Obamacare exchanges in 2013. We also had Obama declining to enforce the employer and individual mandates on schedule per the law. Both of these significant items affect revenue and costs, and certainly make it clear that the CBO projections on deficit impact from 2012 are no longer meaningful, relevant, or accurate.
Interestingly, the CBO has found the time to make “technical adjustments to its baseline projections for federal health spending, has updated its economic forecasts, and has scored the legislation’s effect on labor markets.” But it just hasn’t gotten around to updating the impact of Obamacare on the deficit. In two years.
How does the CBO go about determining deficit impact? There are three areas that comprise this figure, which, added together, provides the deficit number in its totality. They are:
1) “‘Net changes in the deficit from insurance coverage provisions.’ That’s the spending side of Obamacare (or at least its net spending on insurance coverage provisions).”
2) “‘Net changes in the deficit from other provisions affecting direct spending.’ That’s the money that would have been used to fund Medicare (or, to a lesser extent, other federal health programs) but is now slated to be used to fund Obamacare instead.”
3) “’Net changes in the deficit from other provisions affecting revenues.’ That’s the taxes, fees, and penalties under Obamacare that don’t have much, if any, relation to insurance coverage provisions. (The taxes that do relate to insurance coverage provisions — namely, the tax on “Cadillac plans” and the fines for those who violate the individual or employer mandates — are instead included in the first area.)”
Only the first of those three areas has been updated — the spending side of Obamacare — and that was done in April of 2014. Noting the “lower-than-expected enrollment in the Obamacare exchange, changes in health cost assumptions, and reduced penalties collected from individuals and employers due to the president’s selective enforcement of the law”, the CBO updated its numbers regarding the “net spending on insurance coverage provisions”, from $1.171 trillion in 2012, to $1.383 trillion in 2014.
But what of the revenue side of the deficit numbers? That’s the part that has not been updated since 2012. This includes the revenue from Medicare, as well as “non-coverage-related taxes, fees, or penalties”.
By not updating these important revenue figures, the Senate Budget Committee (SBC) found that the CBO therefore “hasn’t incorporated the technical adjustments it has made to its baseline projections for federal health spending as they pertain to Medicare, its updated economic forecasts, or its scoring of Obamacare’s effects on labor markets”. That’s a huge problem. Essentially, they are still hanging onto pre-Obamacare roll-out projections and assumptions in these areas as it relates to revenue.
The Senate Budget Committee (SBC), therefore, has taking the time to calculate the revenue side of the deficit tally, specifically using the technical adjustments the CBO made to its baseline projections when it updated the federal health spending numbers earlier in 2014. Here’s the results of the analysis:
For the area related to Medicare and other federal health programs, (#2 above), the SBC found that the
“baseline changes reduce the amount of projected federal health care savings from the other provisions affecting direct spending in the legislation by a total of $132 billion over the 10-year period, from $979 billion under the CBO 2012 extrapolation to $847 billion based on the SBC staff calculation.”.
In other words, the expected revenue from Medicare and other federal health programs over the newest 10 year period is estimated to be $132 billion less than what was projected in 2012 before Obamacare started.
In the final area which deals “other provisions related to revenue”, such as taxes, fees, and penalties, the lack of expected revenue is even more substantial. (Interestingly, a recent TIGTA report analyzing the just the medical excise tax in this regard corroborates the finding that they are not meeting Obamacare revenue estimates).
Ultimately, the provisions “related to revenue” all concern the labor market — and not in a good way. As noted above, the CBO did score the affect of the labor market’s effect on Obamacare in order to update its federal health spending numbers. That was done in Feb 2014, and the CBO found that “by 2024 the equivalent of 2.5 million full-time workers will exit the labor force as a result of the law. The CBO estimates the law will reduce the total number of hours worked by 1.5 to 2 percent during the FY 2017–2024 period and will reduce aggregate labor compensation by 1 percent over the same period.”
Therefore, the Senate Budget Committee (SBC) took this updated labor analysis and applied it to the third area, specifically looking at how that reduction in aggregate labor compensation would affect taxable income. The SBC found that “based on these assumptions, Obamacare is now projected to get $262 billion less in (non-coverage-related) revenue because of its detrimental effect on job growth, a notion that wasn’t registered in the CBO’s July 2012 scoring.”
And what was the final tabulation of Obamacare’s impact on the deficit?
“So, compared to the deficit surplus of $180 billion for 2015-24 that a straight extrapolation from the CBO’s 2012 scoring would yield, current projections now indicate that Obamacare’s decreased spending (in relation to prior expectations) will reduce deficits by another $83 billion (bringing the estimated surplus to $263 billion), but those projected surpluses will be more than offset by the projected $132 billion decrease in Medicare revenue and $262 billion decrease in tax revenue due to lower job growth.
In all, therefore, CBO projections indicate that Obamacare will increase deficit spending by $131 billion from 2015-24. That’s a $311 billion swing from the extrapolated 2012 numbers, a $240 billion swing from the actual 2012 numbers, and a $255 billion swing from what we were told when Obamacare was passed.“
That’s a mighty big change in only 2 years. How will Obamacare make up the revenue? Will it be an increase in premiums? We still don’t know. Unlike last year, when Obamacare enrollment began on October 1, this year, Obamacare enrollment was held off until November 15 — 11 days after midterm elections.
As recently as this past Monday, the NYT reported that, the Administration lowered its estimate of enrollees by about 30%, “projecting that “9.1 million people would have such coverage at the end of next year. By contrast, the Congressional Budget Office had estimated that 13 million people would be enrolled next year, with the total rising to 24 million in 2016. In the past, the White House has used the budget office numbers as a benchmark for success under the Affordable Care Act.”
4 million fewer enrollees is a large difference in target numbers. So when will the CBO update its data so that the public can accurately ascertain Obamacare’s impact on the deficit?
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Mitch Romney’s appearance on Fox News Sunday the weekend before Election Day confirmed that he should not be a candidate for President in 2016. Indeed, his inability to answer any of Chris Wallace’s questions made it painfully clear why he lost his election bid in 2012.
The first question had to do with the old “outsourcing jobs” bit, which has been an omnipresent theme in several races, such as Quinn for Governor in Illinois, and Perdue for Senate in Georgia. The way Chris Wallace asked about it gave Romney the perfect chance to explain how the outsourcing attack is utter nonsense, but instead, he ignored the question and derided the Democrats for making ad hominem attacks.
Even though the aforementioned candidates won their bid, much of America still honestly believes the “exporting jobs” claim against Republicans — which is why the Democrats tried so hard with it. Had it been a different election cycle, it may very well have stuck better in those race. And Romney missed the opportunity to explain how “outsourcing” those relocated jobs can and do strengthen American business. But he didn’t.
He said nothing about how when the U.S. economy can’t compete in the world market with these lower level jobs here in the US, moving the jobs abroad increases global sales which grow the higher level (administrative, executive, engineering, research and development) jobs remaining here. And nothing about how, in some scenarios, not exporting jobs to stay globally competitive often means, as a result, firing people and closing the business outright. But Romney — the businessman, mind you — ignored all of this and acted as if the other side was right…but just mean.
The second question Romney messed up was in regard to immigration reform. Wallace suggested that the Senate passed a comprehensive plan but that the House GOP refused to pass it. Here, Romney ignored this point again, saying that well, if the GOP gets control of the Senate, they can make immigration laws too. That’s not the point He totally failed to discuss at all how the comprehensive immigration bill was a Democrat style bill which contained provisions unacceptable to the GOP regarding spending and border control. That is the entire reason why it has been rejected soundly by the Republicans.
The last question was in regard to Reince Priebus’ recently published “11 points”. Wallace asked Romney if he thought it was a mistake for the GOP to have made these points. Romney basically ignored it. He could have talked about how, once the elections are over and Republicans victorious, the GOP can move forward. He had the opportunity to build up the Republican brand, to wax poetic about why Republicans are better and use even some of the 11 points to discuss it. But he didn’t. He said nothing.
To use a baseball analogy, it was strike three. Romney is not a good contender. In an arena as easy as Chris Wallace and Fox News Sunday, it was extremely disappointing We need someone that knows how to answer the damn question. To articulate the positions of the GOP on their feet. To prepare the points that need to be made. To get the sentences out swiftly and succinctly. The nominee for 2016 needs to be able to think on his feet, defend liberty, promote prosperity, and speak the principles that we hold dear. Romney has proven, once and for all, that he is unable to do such a thing.
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During the ongoing court case between Judicial Watch and the IRS, the IRS recently filed a “Defendant’s Opposition to the Plaintiff’s Motion Seeking Recovery”, protesting the continued FOIA requests regarding Lerner’s tapes.
Some remarkable information emerged. In the document, the IRS wrote that they have not searched IRS servers because “the servers would not result in the recovery of any information.”
The IRS further claimed no search was performed on the back-up tapes, because there was “no reason to believe that the tapes are a potential source of recovering” any lost emails.
What’s more, the IRS stated no there had not been a search on the government-wide back-up system because they had “no reason to believe such a system … even exists.” (contrary to earlier statements), and that the IRS didn’t submit “declarations about any of the foregoing items because it had no reason to believe that they were sources from which to recover information lost as a result of Lerner’s hard drive failure.”
So what did the IRS do? The IRS described how it collected information from IRS employees likely to be involved, “loaded that information onto an electronic server, processed it, and searched it”, creating what it calls “the Congressional database” for the purposes of the investigation. It is from there, and only there, that the IRS “is reviewing all documents in the Congressional database to determine whether they are responsive to Judical Watch’s FOIA requests”. Not email servers. Not back-up tapes. Not back-up systems.
So the IRS made a separate database, created from information it selected to go into the database, and searches that — hoping that database and search is satisfactory enough for the courts.
The IRS also protested Judicial Watch’s Motion Seeking Recovery on these grounds:
I. Judicial Watch is not Entitled to Discovery
II. Judicial Watch’s Motion is Premature
III. Judicial Watch’s Request for Discover is Inappropriately Broad and Vague|
The IRS specifically argued in its document that “the discovery is the rare exception in FOIA cases and should only be allowed under extraordinary circumstances, such as agency bad faith or conflicting declarations. No extraordinary circumstances are present here, and Judicial Watch cannot manufacture extraordinary circumstances through hearsay, innuendo, and bald assertions.”
In case anyone was wondering whether or not extraordinary circumstances, agency bad faith, or conflicting declarations applies, here’s a quick summary timeline produced by IJReview.
August 2013 – Congress issues the first subpoena for Lois Lerner’s emails from 1/1/2009 through 8/2/2013
September 2013 – Lerner resigns from the IRS.
October 2013 – House Oversight Committee issues second subpoena for the emails.
February 2014 – President Obama asserts to Bill O’Reilly that there was “not even a smidgen of corruption” at the IRS.
March 2014 – The IRS states the the emails from Lerner’s computers were removed, put in storage, but that they “are in fact searching” for them.
June 2014 – The IRS states that it has lost emails of other employees, all of which had been subpoenaed as well.
July 2014 – The IRS admits that it was told that the drives were likely able to be repaired, but opted to destroy them instead.
September 2014 – The IRS states that emails from more than 20 employees, all of which were were subpoenaed, were lost due to drive crashes.
November 2014 – The IRS admits that it never looked for the emails in the first place.
This court case will continue to drag on and on, hoping that enough time will pass that Americans will forget or lose interest in this scandal. Kudos to Judicial Watch for continuing to insist on information and integrity.
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Romney’s appearance on Fox News Sunday this past weekend confirmed that Romney should not be a candidate for President in 2016. Indeed, his inability to answer any of Chris Wallace’s questions at all made it painfully clear why he lost his election bid in 2012.
The first question had to do with the old “outsourcing jobs” bit, which has been an omnipresent theme in several races, such as Quinn for Governor in Illinois, and Purdue for Senate in Georgia. The way Chris Wallace asked about it gave Romney the perfect chance to explain how the outsourcing attack is utter nonsense, but instead, he virtually ignored the opportunity by not answering and addressing Wallace’s question. All he did was basically state that the Democrats make ad hominem attacks…and that’s about it. Nothing about how those relocated jobs can and do strengthen American business. Nothing about how the U.S. economy can’t support many of these businesses anymore, so they have to go elsewhere. Nothing about how, in some scenarios, not exporting jobs to stay globally competitive often means, as a result, firing people and closing the business outright. But Romney — the businessman, mind you — ignored all of this and acted as if the other side was right.
The second question Romney messed up was in regard to immigration reform. Wallace suggested that the Senate passed a comprehensive plan but that the House GOP refused to pass it. Here, Romney ignored this point again, saying that well, if the GOP gets control of the Senate, they can make immigration laws too. He totally failed to point out that the comprehensive immigration bill was a Democrat style bill which contained provisions unacceptable to the GOP regarding spending and border control.
The last question was in regard to Reince Priebus’ 11 points. Wallace asked Romney if he thought it was a mistake for the GOP to have made these points. Romney basically ignored it. He could have talked about once the elections are won, the GOP can move forward. But he didn’t.
To use a baseball analogy, it was strike three. Romney is not a good contender. We need someone that knows how to answer the damn question, to articulate the positions of the GOP on their feet. To prepare the points that need to be made, get the sentence out swiftly and succinctly. The nominee for 2016 needs to be able to think quickly, defend liberty, promote prosperity, and speak the principles that we hold dear. Romney has proven, once and for all, that he is unable to do such a thing.
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Will the Republicans take the Senate? Election Day Links (to be updated periodically)
Republicans sense power shift; Dems rev up damage control
WASH POST: 97% CHANCE GOP TAKES SENATE
CNN 95%
NYT: 70%
PAPER: Where did O go wrong?
NYT: Irate Electorate…
Most ads on Obamacare…
WH Strategist: Dems Running from President ‘Look Like Chickensh*t’…
Guide to What to Watch for on Election Night…
Harry Reid’s fateful evening…
30 year old Republican set to be youngest congresswoman in history…
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The Legatum Institute’s 2014 Prosperity Index scored Norway as the most prosperous country in the world, with the United States ranked as the 10th. 142 countries that are ranked in the Index. Central Africa Republic is the least prosperous
There are eight factors that go into the ranking. They are:
Economy
Entrepreneurship
Governance
Education
Personal freedom
Health
Security
Social capital
The Legatum Institute has released the Prosperity Index for seven years. The top ten this year are:
1 Norway
2 Switzerland
3 New Zealand
4 Denmark
5 Canada
6 Sweden
7 Australia
8 Finland
9 Netherlands
10 United States
In 2008, the first year of the Index, the United States ranked 6th place. 2009 it was 9th place, 2010 and 2011 it was 10th place, 2012 it was 12th place, 2013 it was 11th place, and now in 2014 it’s back to 10th place.
Legatum is a private, United Arab Emirates-based, investment organisation and thinktank. It’s headquarters are in Dubai International Financial Centre. It is interesting to see such a scoring from a perspective on the other side of the world.
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The Tax Foundation released its yearly State Business Tax Climate Index. This index measures the impact of taxes on business activities by looking at how much the citizen is taxed and also the amount of compliance. Five taxes are considered: 1) individual; 2) corporate; 3) sales; 4) property; 5) unemployment insurance.
Wyoming lead the states in growth, with a GDP gain of 7.6%. At the bottom, predictably, are New York (49th) and New Jersey (50th). New Jersey saw GDP growth of only 1.1% last year, while New York’s was only 0.7%. According to the report, New Jersey secured last place because “suffers from some of the highest property tax burdens in the country, is one of just two states to levy both an inheritance and an estate tax, and maintains some of the worst structured individual income taxes in the country.” Contrast that with Wyoming, which has no corporate or individual income tax.
The most surprising finding from the report was that North Carolina, which previously ranked 44th, was now ranked 16th. According to the Tax Foundation, “North Carolina’s largest improvement was in the individual income tax component section, where legislation restructured the previously multi-bracketed system” with a top rate of 7.75% to a single-bracket system with a rate of 5.8% “and a generous standard deduction of $7,500.”
The WSJ also noted that, “North Carolina is also reducing its corporate income tax rate—to 6% this year from 6.9% last year. The rate could drop as low as 3% by 2017 if the state achieves certain revenue targets for its general fund. North Carolina also received credit in this year’s ranking for a simplified sales tax system.”
The ten best states this year are:
1. Wyoming
2. South Dakota
3. Nevada
4. Alaska
5. Florida
6. Montana
7. New Hampshire
8. Indiana
9. Utah
10. Texas
8 of these top ten do not have of the five major taxes noted above. Indiana and Utah do have five, “but levy them with low rates on broad bases.”
The ten worst states are:
41. Iowa
42. Connecticut
43. Wisconsin
44. Ohio
45. Rhode Island
46. Vermont
47. Minnesota
48. California
49. New York
50. New Jersey
They earned this spot because all of the states “suffer from the same afflictions: complex, non-neutral taxes with comparatively high rates.”
In sum, “Taxes matter to business. Business taxes affect business decisions, job creation and retention, plant location, competitiveness, the transparency of the tax system, and the long-term health of a state’s economy. Most importantly, taxes diminish profits. If taxes take a larger portion of profits, that cost is passed along to either consumers (through higher prices), employees (through lower wages or fewer jobs), or shareholders (through lower dividends or share value). Thus, a state with lower tax costs will be more attractive to business investment and more likely to experience economic growth.”
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The idea of “disparate impact” is an abomination that has taken root in the business world and is being pushed into other sectors as well, such as housing and labor. This idea holds that “a defendant can be held liable for discrimination for a race-neutral policy that statistically disadvantages a specific minority group even if that negative “impact” was neither foreseen nor intended. In such cases, defendants can be forced to pay for harm caused not by their own actions, but by economic and statistical realities, even if beyond their control.”
If we do not focus on substantially curbing or ending it, it will continue to grow, extorting huge sums from innocent companies and parties, creating an enormous economic burden on society, and allowing the tort bar to run amok. Yet it is vigorously being expanded by one man in particular: Thomas Perez.
There are many areas in business where charges of “discrimination”, often regarding race, could and are being made every day. Employment and mortgage origination are two of the most prevalent. The law requires — as it should — that for a company to be guilty of such discrimination, there must be an intent to discriminate.
But government agencies have found a way to overrule that requirement by developing the idea of “disparate impact”. Disparate impact allows if a protected class of citizens has a statistically lesser representation with respect to a business (hiring, mortgages origination, etc) it may be implied that the business has intentionally discriminated — because there is an adverse impact as a result. This is clearly irrational, since there may be many economic, societal, and local reasons for the particular statistical representation. Unfortunately, disparate impact puts the burden to show lack of discrimination on the employer, meaning he is guilty until proven innocent. In fact, in order for an employer to defend himself against such a charge, he would have to show that the “offending rule or practice” was a “business necessity”.
The current administration has been keen on applying disparate impact theory to a number of private companies, and appears intent on ramping up the practice. For example, Obama’s current Labor Secretary, Thomas Perez, had been particularly lucrative in this regard while serving as the Assistant Attorney General for the Civil Rights Division of the United States Department of Justice, his position prior to joining Obama’s cabinet. Last summer, National Review Online (NRO) covered some of Perez’s cases in recent years in his role of , noting that Perez “has applied that theory vigorously to force large settlements from financial companies even in cases where there was no evidence of actual racial discrimination”. In other words, employers can be sought after for violating the law, whether or not there was actual intent.
The White House in general, and Perez in particular, like disparate impact theory because it, as NRO noted, it “sets a very low bar for proving discrimination. Under it, prosecutors need not prove intent, merely that minorities have suffered a disparate impact from some action”.
This is the person who is currently the front-runner for Attorney General to succeed Eric Holder.
The Wall Street Journal has taken note of Perez’s penchant for “disparate impact” as well, calling it “Mr. Perez’s most controversial, and constitutionally questionable, position”, “as a measure of discrimination. According to this theory, if fewer blacks or Hispanics are hired than their percentage of the “relevant” population, then the employer must have discriminated, even if all hiring procedures were fair and racially neutral.” Again, intent need not actually be proven, but merely the affect of a practice or policy is enough to gain the attention of disparate impact advocates.
Current labor leaders have expressed unease with the possibility of now-Labor Secretary Thomas Perez assuming the role of AG, as his bias is pervasive:
“Ryan Williams of Worker Center Watch said that the labor secretary’s brief stint at the Labor Department has been defined by divisiveness and political ideology, rather than effective leadership or unbiased regulation. He pointed to the department’s funding of union front groups known as worker centers as an example of his bias.
“Perez has been charged with enforcing existing labor law. Unfortunately, he’s chosen only to enforce the law when it applies to employers, not to the Administration’s union allies,” Williams said in a release. “While the politicization of federal agencies is running critique of the Obama administration, the Justice Department is the one agency that should remain above the fray of politics, and Perez has demonstrated that he is incapable of serving as a neutral arbiter of the law.”
Patrick Semmens, a spokesman for the National Right to Work Foundation, said that Perez’s record gives no indication that he will abandon his politics to administer the law in a neutral manner.
“Tom Perez as Attorney General is a scary thought. If Perez is allowed to operate the Department of Justice the way he has run the Labor Department, he will consistently put the priorities of the president’s key political backers ahead of the rights of regular Americans,” he said.”
Housing is another area where “disparate impact” theory has entered the arena more frequently. In 2013, “The U.S. Department of Housing and Urban Development issued a regulation on “disparate impact,” codifying a long-used legal precedent that says the Fair Housing Act prohibits practices that result in discrimination “regardless of whether there was an intent to discriminate.”
A challenge to “disparate impact” policy in housing has been given the green light by the Supreme Court earlier this month, the third time to do so in the last 2 years. But the Obama administration has been so desperate to keep SCOTUS from potentially ruling against it, it vigorously mounted pressure to have the prior cases dropped. Guess who was the key player in the first case? Thomas Perez. Both the WSJ and The Weekly Standard covered this extensively, noting how Perez “made a Supreme Court case disappear”.
Forbes describes the deals more in depth: “The disparate-income case the Obama administration scuttled also had perverse implications for the supposed victims of discrimination. In Magner v. Gallagher, antidiscrimination advocates accused Minneapolis of reducing the stock of affordable housing for minority residents by aggressively enforcing housing codes. Those codes, of course, also benefit poor residents by insuring their dwelling units are safe. In the end, future Labor Secretary Thomas Perez, then an assistant U.S. Attorney, flew to Minneapolis and worked out a settlement to prevent the case from being heard.
In the second challenge, Twp. of Mount Holly v. Mt. Holly Gardens Citizens in Action, the Soros-funded Open Society Foundation, Ford Foundation and other groups contributed money to a developer to provide low-income housing units and settle a lawsuit challenging the New Jersey city’s redevelopment program.”
For the newest case to be heard next year, Texas officials were “sued under the U.S. Fair Housing Act over tax credits for low-income building projects. The question is whether people can sue by showing a practice had a “disparate impact” on racial minorities, or whether they must meet a higher standard by proving intentional bias.” That will be decided on next year. Will Thomas Perez be the next Attorney General by then?
The battle for Thomas Perez will wait until after midterm elections. He follows the footsteps of Eric Holder in theory and tactic and expanding “disparate impact” theory is one of his most important gimmicks. This is one fight that should be watched closely.
by | ARTICLES, BUSINESS, ECONOMY, OBAMA, POLITICS, TAXES
Businesses are constantly make decisions about where its people need to be do their jobs. They follow the incentives to be the best company, to manufacture their product in the strongest and least intrusive way. Oftentimes that means, at some point, part of their operation moves abroad.
Opening up new foreign markets doesn’t lose jobs. Relocating work overseas typically is a reaction to proximity to supply chains, developing interests in new consumer markets, and keeping costs low for customers here — much more than the mantra that “shipping jobs overseas” is about labor costs and profitability for the business owner.
A business owner has to do what is best for his company. His competitor is doing the same thing — what he needs to do to survive. If the business policies in the United States are making it difficult to succeed and compete, that’s not the fault of the business owner. Those who wish to level this attack at business owners would do well to first take a critical eye to the policies that affect businesses here.
Businesses “ship jobs overseas” only if it needs to be done. Rarely does it have to do with the fact that labor is cheaper abroad. Blame can be placed squarely in the government imposed obligations and regulations and the pervasive anti-business climate. Businesses do not go into business to comply with government dictates — but to make things, provide a product, a service. If some of the processes to stay in business are found better abroad, the owner will follow suit in order to survive and thrive.
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Thomas Perez was Obama’s Labor Secretary pick 15 months ago, and he’s emerging as top contender for Attorney General as well. Is it any wonder that he gave a major speech at the National Press Club this week to share his vision of America? Entitled, “Calling for an Economy That Works for Everyone”, Perez discusses the concept of “shared prosperity”.
How many times did he use that phrasing? Try 20 times. These phrases were bold in the speech:
*”An economy that works for everyone is one where prosperity is broadly shared.”
*”The principal unfinished business of this recovery is to ensure that prosperity is broadly shared, and that we build an economy that works for everyone.”
So what is “shared prosperity”? Perez describes, “Step one involves tearing up the talking points and understanding history. Shared prosperity is not a fringe concept cooked up by socialists. Historically, both parties have embraced it with their words and their actions. In fact, it’s a principle as American as apple pie, and it’s the linchpin of a thriving middle class.”
He then cites Teddy Roosevelt, Goldman Sachs CEO, and Janet Yellen as supporters of this concept.
Perez went on to describe three major initiatives which consisted of: raising the minimum wage, more federal spending on infrastructure, and immigration reform. Perez states that a majority of small businesses support a minimum wage increase. He further declared that “shared prosperity” is found in “big bold policy initiatives”, such as “comprehensive immigration reform” (hint: amnesty). Perez claims that immigration reform would raise the GDP 5.4% over the next 20 years and raise wages for workers. This is in contrast to the CBO report that suggests wages would actually be lowered.
Other facets of Perez’s vision of prosperity include: paid leave, job training, and the “importance of the worker voice”, via collective bargaining. Perez particularly praised the collaborative efforts of the SEIU and UAW, calling unions a “critical step” in “shared prosperity”.
Additionally, Perez’s “shared prosperity” called for leadership. Perez’s vision is that of Obama’s: “First, we need leadership from Washington. And if Congress won’t do its part, President Obama has demonstrated that he’ll use his executive, regulatory and convening authorities — his pen and his phone, as he says — to provide that leadership.”
Interestingly, (coincidentally?), “Shared Prosperity” was “Resolution 6” at the Annual AFL-CIO Conference in August 2013. This was held less than a month after Perez became Labor Secretary, and many of its tenets sound remarkably like those championed by Perez, such as:
“• a secure job that pays a living wage in a safe workplace for all who seek one;
• a voice at work—through our unions and through collective bargaining with our employers”
The resolution further describes, “The values of shared prosperity are locked in conflict with the agenda of financial elites and global corporations. But in the end this conflict is self-defeating. A world of radical inequality is not in anyone’s long-term interest. That is why we seek a global economy where worker rights and the environment are protected, an economy where global finance is regulated and put to work to increase shared prosperity.”
You can read the entire agenda here. And apparently, the Washington State Labor Council was so impressed with this idea, they announced their own “shared prosperity” agenda in January 2014. Will other state councils follow suit?
“Shared prosperity”, however, is really nothing new. Hillary Clinton discussed this very concept in a campaign speech from 2007, entitled “ECONOMIC POLICY: Modern Progressive Vision: Shared Prosperity”. And at a campaign fundraiser in 2012, Obama also called for “shared prosperity” in his own speech when he asked folks in Chicago: ““Do we go forward towards a new vision of an America in which prosperity is shared? Or do we go backward to the same policies that got us in this mess in the first place?”.
As our current Secretary of Labor, Perez wished to implement this vision of “shared prosperity” into labor practices for America. If Perez is on the short list for Attorney General, how does he feel about the law? One more excerpt from his speech:
“Leadership also means enforcing the law fairly and independently. At the Labor Department, we’re being more strategic and aggressive than ever about cracking down on wage theft, misclassification and other violations. During the Obama Administration, we’ve recovered more than $1 billion in back wages. We’ve taken enforcement to a whole new level — not only because it gives workers the pay they’ve earned, but also because it levels the playing field and helps the vast majority of employers playing by the rules. Laws are only as effective as the political will of those enforcing them.”
Thomas Perez’s previous position before becoming Labor Secretary was serving as the Assistant Attorney General for the Civil Rights Division of the United States Department of Justice. No wonder he is a front runner to succeed Eric Holder.
