This week, conservatives in the United States Senate blocked a $60 billion piece of President Obama’s American Jobs Act from advancing — a package that would have created a national infrastructure bank and funded needed infrastructure projects while putting 450,000 Americans back to work, paid for by a miniscule 0.7 percent surtax on taxpayers making over a million dollars a year. This follows the similar conservative blockage last month of $35 billion in aid to states that would have allowed states to save the jobs of hundreds of thousands of teachers and first responders. All told, Congress has now blocked three separate jobs bills over the past month (including their original rejection of the entire American Jobs Act), a striking display of intransigence on the part of conservatives who claim to be concerned about job creation. As jobs efforts stall in the nation’s capital due to this right-wing obstruction, state legislators from 48 states and counting are letting D.C. know their states need jobs now, and many are taking the lead on job creation themselves.
A pension debate in Rhode Island this fall could set the stage for how dozens of other states take up the issue when regular sessions resume in 2012. As Progressive States Network reported last month, calls for dramatic changes to public pension systems and social security are largely an opportunistic move by conservatives to advance a privatization and anti-tax agenda. The debate playing out in Rhode Island has turned into another unfortunate instance of this, driven by a take-it-or-leave-it proposal by State Treasurer Gina Raimando – a venture capitalist by trade – that would slash benefits and partially privatize the system. To support the proposal, a newly formed lobbying organization supported by financiers and business lobbyists is running a full-press political campaign that is choking out discussion of more reasonable alternatives.
As the Occupy Wall Street movement spreads across the nation and occupations promise to continue into the winter months, the physical presence of the protesters and their effective communication of the widely shared concerns of “the 99%” about the consolidation of wealth and political power is already having a significant impact on the public debate. Reeling from Occupy-inspired criticism and watching as hundreds of thousands of their customers move their money to smaller banks and credit unions, big banks like Bank of America this week backtracked on their plans to institute yet another proposed fee for debit card use. With gridlock in Congress continuing, the most significant political impact of the Occupy protests may ultimately be felt in statehouses, where the renewed national focus on the consequences of historic levels of inequality are showing signs of revitalizing prospects for a host of progressive economic policies, including one key demand of the protests: asking the 1% to pay their fair share.
As President Obama continues to push Congress to pass the American Jobs Act, the jobs crisis has motivated governors and legislators to act on their own in recent weeks at the state level. In many cases, with regular legislative sessions adjourned, this has meant special sessions being called to focus either in part or in full on passing measures that proponents say will spur job creation even in the absence of Congressional action. With revenue crises still affecting states and conservatives holding up the much needed federal jobs bill in Congress, most of the proposals being made in these special sessions are revenue-neutral, but the effect that many of them will have on actual job creation for their states is questionable at best.
This week, a 3 week-long protest against economic injustice and inequality in the Financial District in New York City gathered momentum as approximately 20,000 people joined a march in solidarity and similar protests against the excesses of Wall Street spread to almost every other state, fueled by a rising sense of urgency on the economy. The “Occupy Wall Street” protest in New York was bolstered by a huge rally on Wednesday organized by labor unions and community groups loudly proclaiming their support for the core group of protesters who have been occupying a plaza a few blocks away from the New York Stock Exchange. As progressive leaders and many elected officials — including state legislators — begin to lend their support to the still-fledgling protest, many are repeating one core message emerging out of the diffuse and leaderless movement: underscoring the increasingly deep economic divide in this country separating the super-wealthy from the 99% of Americans who have borne nearly the entire brunt of the Great Recession and its aftermath.
As protests on Wall Street spread across the country, the dire need for progressive solutions to financial corruption and savage inequality is capturing national attention. One aspect of Wall Street’s agenda that has not been sharply criticized enough is emerging as a defining issue in the presidential campaigns of challengers to President Obama: dismantling Social Security and public pension systems. Texas Governor Rick Perry has grabbed the most headlines by absurdly characterizing Social Security as a “Ponzi scheme,” and calling it a “crumbling monument to the failure of the New Deal.” Other presidential candidates are also trying to stake out positions to privatize retirement funds, and state policymakers who are leading ideological attacks on workers have targeted pension funds in an effort to pit union and non-union workers against each other.
Secretary of Labor Hilda Solis last week announced a new state-federal program to crack down on a form of payroll fraud that has run rampant over the last decade. Absent stronger enforcement of labor standards, employers are going to great lengths to cash in by defrauding their workers and leaving taxpayers with the bill. Just this week, a NYC construction firm has been accused of using front companies to dodge union contracts. The unions allege the company used low-wage workers to pocket $7 million in wages and benefits from 2007-2011. A much more common and mundane way for employers to pad their bottom lines is by misclassifying employees as independent contractors. Through misclassification, companies can simultaneously defraud workers of minimum wage and overtime and dodge a variety of state and federal taxes: payroll, income, unemployment insurance, and workers compensation. Prosecuting the practice, and deterring employers from engaging in it, is both a vital way to protect working families’ economic security and an important measure to alleviate state and federal revenue crises.
Conservative efforts to roll back reforms that benefit working families have hit a major snag – the voting public. Citizens in Ohio and Maine are taking advantage of the ballot initiative process in their states to fight back against right-wing legislation rammed through their statehouses this year that aims more to tilt the 2012 elections rather than actually serve any constituents. As record numbers of voters in some states sign on to petitions to repeal harmful and politically motivated laws, they are sending a clear message, one both reflected in polling and which is resonating across the country: that they will not allow their states to move backwards by stripping workers and voters of fundamental rights.
Most states have hundreds of tax expenditures on their books, ranging from tax credits to reduce poverty to exemptions benefiting homeowners to business subsidies. Some of these expenditures, like a sales tax exemption on groceries, have a broad social benefit and enjoy widespread public support. Yet the benefits of others, which are often created for specific companies or industry sectors while purportedly incentivizing local economic growth or job creation, are less clear. Many states have exemptions and credits that are decades old and in some cases outdated or underperforming, with no laws in place to review them and assess their actual impact in local communities. However, another year of severe revenue shortages and deep budget cuts now has many states scrutinizing the true value of these preferential tax treatments.
States looking to avoid making devastating budget cuts following the Great Recession have turned in recent years to closing tax loopholes, including requiring online retailers with a physical presence in-state to collect state sales taxes. Unsurprisingly, states who have pursued this approach have been fought every step of the way by huge corporations, specifically the online retail giant Amazon. This week, the battle came to a head in California, where lawmakers — who had earlier this year passed a measure requiring large online retailers to collect sales taxes — compromised in the face of a multimillion dollar effort by Amazon to take the issue to the voters in a ballot referendum by agreeing to delay the implementation of the law by one year.