As political battles over budgets and deficits continue to rage in D.C. and statehouses across the nation, the dominant rhetoric continues to be that the vast majority of the nation must bear the burden of “shared sacrifices” – fewer teachers, hospitals, and other social services – while the wealthy continue to enjoy substantial tax cuts. In other words, working families have to cope with a financial crisis created by Wall Street while those that got us here in the first place pay no price.
This past week, 154 legislators from 26 states joined together to send a message to the 11th Circuit Court of Appeals now considering a lawsuit against the Affordable Care Act: that the framers of the Constitution themselves would have supported the law, and that they will not sit idle while the health security of their constituents is endangered by continuing partisan political attacks against legislation from the right wing. The legislators’ amicus brief supports the constitutionality of the Affordable Care Act, arguing that the district court ruling was “based on a fundamentally flawed vision of the constitutional role of our federal government and its partnership with the States – a vision that contradicts the original meaning of our Founding charter.”
Public education and child advocates in Texas have found an uncommon ally in this year’s budget debates: the Texas Association of Business (TAB), the largest business advocate in the state. A budget bill passed by the Texas House of Representatives on April 4 included dramatic cuts to education, providing $8 billion less funding than state law requires. Among the most austere provisions is the complete elimination of state funding for pre-kindergarten programs. TAB published a report making the case that quality public education is vital for the state’s economy, and that pre-kindergarten programs in particular actually help contain education costs in the short term. Association president Bill Hammond said, "If we don't have an educated workforce, the jobs will leave. We are not meeting the needs of the future."
In recent weeks, state legislatures and voters alike have continued to push back against last year's Supreme Court decision in Citizens United, which took away the power of government to limit independent spending in elections and effectively overturned laws in 24 states that banned independent political expenditures from corporations and/or unions. In addition to legislative initiatives requiring shareholder approval of corporate political spending or expanding disclosure requirements for independent expenditures, two other tactics to limit the damage of Citizens United are also quickly gaining momentum: local referenda supporting an anti-corporate personhood amendment to the U.S. Constitution and shareholder resolutions urging corporations to adopt political accountability.
At the end of March, the New York Times published an explosive story finding that General Electric (G.E.), the nation's largest company which reported $5.1 billion in profit last year from operations in the U.S., would not pay a dime in federal taxes. Similarly, ExxonMobil posted profits exceeding $45 billion last year, but as a result of aggressive tax avoidance strategies, paid no federal income tax in 2009. Almost as shockingly, in a 2008 report, the Government Accountability Office discovered that two out of every three U.S. corporations paid no federal income taxes from 1998 through 2005.
Several elected officials across the states have approached budget shortfalls with extremely short-sighted and economically damaging proposals, including lavish tax breaks for corporations, slashing unemployment benefits, heinous cuts to programs that primarily benefit middle class and working families, eliminating earned income tax credit (EITC) programs, and privatizing services and institutions across the board, such as mental health services, prisons, and infrastructure. These types of policies will only serve to worsen fiscal pressures, exacerbate the economic pain of the middle class, increase inequality, and heighten the current regressivity of state tax structures, which, on average, place a heavier burden on low and middle-income earners than the rich. This is demonstrative of a disturbing and pervasive recent trend: tax breaks for the affluent and corporations, and austerity for the rest.
As the prospect of a federal government shutdown looms in Washington D.C., states are nervously preparing for the impact it could have on their already strapped budgets and their fragile economic recoveries.
In early March, New Mexico progressives achieved a notable victory after the state legislature approved SB47, a bill to develop an annual tax expenditure budget, to accurately assess how much the state spends on tax breaks for various industries and companies. The bill's movement is complimented by heightened legislative momentum around accountability across the states. Such reforms, including increasing disclosure of state spending on subsidies, contracts, and corporate tax breaks, are especially necessary considering the bleak fiscal and economic circumstances states continue to confront.
In recent weeks, public workers have been targeted in states across the nation by a corporate-funded, national right wing movement seeking to capitalize on the effects of the economic downturn on state budgets by stripping workers of many hard-won rights, including the right to collectively bargain. Now, the same groups who have campaigned to demonize public workers are deploying a new tactic to intimidate those who dare speak out in support of the middle class: broad and politically motivated Freedom of Information Requests seeking the personal emails of professors and other employees at public academic institutions.