HIRE Act Offers Tax Savings For Businesses

The HIRE Act was passed earlier this year to motivate companies to hire the unemployed.  Any business, regardless of size, which hires someone who has been unemployed for more than 60 days receives a $1,000 tax credit if that person remains for 52 weeks and they, more importantly, get a waiver of the FICA payroll taxes for that person.  That means saving 6.2% of their contribution to Social Security and Medicare.  This can add up to nearly $3500 for 2010.  The program expires at the end of the year.

Jim Barba of the Albany Medical Center was on a conference call yesterday with Treasury officials touting the success of the Act.  Thus far 248,000 people in Pennsylvania are among 5,600,000 nationally eligible for the tax credits.  The Albany Medical Center had a hiring freeze on for non critical employees until the HIRE Act was passed by Congress and signed into law by the President in March.  Since then they re-evaluated their decision and have added 157 new employees through June.  He estimates several dozen more came on in July.  This represents a savings of several hundred thousand dollars for a $1 billion company in central New York.  

Treasury officials said the top three job sectors for this growth are construction, retail and professional services.  Manufacturing continues lagging behind but has seen 136,000 eligible hires since March under the Act.  Not all new hires are being done because of this legislation and Treasury says it will be impossible to determine that extent until companies file taxes next spring.  They do want to get the word out that these new tax credits exist to spur more hiring and that was the purpose of yesterday’s call.  I asked what other steps they’ve taken since this was the first I’d heard of this action.  Thus far they have gone through the IRS to inform accountants and payroll servicing companies such as ADP.  I wonder how many small businesses might add employees if they understand the tax opportunity this law holds for them?  Unfortunately in a time where job creation is the nation’s highest priority Congressional Republicans have been blocking almost all attempts to spur job growth.  Any successes are to be trumpeted.

AdultBasic Sings the Blues

( – promoted by John Morgan)

Last week, advocates across Pennsylvania called on state lawmakers to preserve the adultBasic health insurance program.

AdultBasic provides affordable, no frills health coverage to adults earning up to 200% of the Federal Poverty Level. Before last week's statewide Day of Action, organized by the  Pennsylvania Health Access Network (PHAN), few people were aware that  the program is in jeopardy.

But it is, as PHAN and the Pennsylvania Budget and Policy Center documented in a new report – AdultBasic Sings the Blues – that was rolled out in conjunction with the adultBasic Day of Action.

At the heart of the funding crisis is the December expiration of an agreement under which the state's four Blue Cross/Blue Shield plans have contributed funding toward adultBasic since 2005. In recent months, the Blues have refused to renegotiate the Community Health Reinvestment (CHR) Agreement, even though they are sitting on surpluses that are more than $1 billion larger now than when the agreement was signed five years ago.

If no new agreement is reached – or new funding found – adultBasic health coverage will essentially disappear for nearly 46,000 Pennsylvanians at year's end.

The report calls on the Blues to continue funding adultBasic as part of their social mission until 2014 when the U.S. health reform law will be fully implemented. It also urges the General Assembly to put the CHR Agreement into law and asks the Pennsylvania Insurance Department to revisit its standards for evaluating the Blues' surpluses.

In response to last week's report, the Blues publicized their offer to state officials to continue funding adultBasic through June 2011 – a six-month extension on the Community Health Reinvestment Agreement. Such an arrangement, however, would require a freeze on new enrollees, reducing adultBasic enrollment from about 46,000 to 37,000 in June 2011. This will only add to the already overstretched waiting list, which stood at 397,671 in June and has grown by more than 300% since the start of the recession in December 2007.

Some might ask, can the Blues afford to continue funding adultBasic? The answer is a resounding yes.

Between 2002 and 2009, the four companies’ cumulative surpluses went from $3.5 billion to $5.6 billion, an increase of 61.4%. These surpluses grew two-and-a-half times faster than Pennsylvania wages – despite the Blues' contributions to adultBasic and the impact of the worst recession in a generation.

Check out our report on adultBasic today!

We also need your help to send a message of support for preserving adultBasic as a critical health care option for working Pennsylvanians without insurance. Take action today by signing an online petition or submitting a letter to the editor in support of adultBasic.

Is the Republican Victory Plan Another Great Depression?

by Stephen Crockett

It seems like the Republicans in Congress have decided that sabotaging economic recovery and employment growth is their best tactic for electoral gains in the November elections. Indications of this plan have been around since the Democratic victories in 2008. It seems that all doubt about facilitating the economic downturn as a path to political power for Republicans have been removed by recent legislative votes.

Economic recessions and depressions almost always result from insufficient “effective” consumer demand for goods and services produced domestically. In economic terms, wanting something is not “effective demand” . For a want to become a demand for goods or services, it must accompany the desire to buy with the ability to actually purchase.  Money is required.

Jobs are not created by just having large pools of investment money available. There must be the opportunity to invest in a business that will have customers who can buy the goods and services before the investment money flows into job creation activities. The Republican Right economic theory that economic prosperity and  employment ” trickle-down from the wealthy” has proven to be unsound by historical experience.

Tax cuts for the wealthy create huge investment money pools but not jobs. Our nation has plenty of money setting idle in corporate and personal coffers. Corporations have almost a trillion dollars setting essentially idle in corporate accounts at this time.

Republicans are seeking to extend the tax cuts for the wealthy by falsely stating that increases in taxes for the upper 2% of income earners would hurt demand and prolong the economic downturn. Experience and history prove otherwise.

Tax cuts at the highest marginal incomes brackets do concentrate wealth and political power in the hands of the economic elite. The resulting political power by the economic elite pushes government policy in directions that dramatically cut the percentage of the nation’s wealth and income held by the vast majority of Americans. This reduces the ability of most Americans to buy goods and services. As a result, the economy unwinds because customers do not have enough disposable income to keep the flow of goods and services at a healthy economic level. The former middle class disposable income now controlled by the economic elite funds speculation and unsound “bubbles” in the economy instead of a healthy economy because sound businesses now lack paying customers.

Deregulation helps corporations charge excessive prices. Not enforcing anti-monopoly laws permits price gouging. Not capping interest rates concentrates wealth and reduces consumer spending. Outsourcing jobs to foreign nations reduces incomes available to buy goods and services. Union-busting keeps wages and benefits down which undermines the purchasing power of workers.

Privatizing government services costs consumers more in out of pocket expenses once provided by government. This reduces disposable income for these consumers. When employers reduce benefits and increase co-pays, it increases the cost-of-living for workers. As a result, these workers have less disposable income to spend on goods and services.

Middle class tax cuts do help the economy because they increase the disposable income of those members of society who spend the vast majority of their incomes and have little left over to save. The money changes hands over and over again instead of setting idle. This is the multiplier effect in economics.

Extending unemployment benefits has a huge multiplier effect. This is because unemployment benefits are so low that essentially all of it gets spent on goods and services immediately.

Excessive concentration of wealth and income unwinds our economy. All the Republican policies for the past 100 years have been designed to concentrate wealth and income in the hands of the very few. Every time they reach the economic concentration levels that currently exist, we have a serious depression. This is a direct result of increasingly “Republicanized” governmental policies over the previous 30 years.

Economic concentration of wealth and income are currently at levels very similar to those just before the Great Depression in 1929. The only reason our current situation has not quite deteriorated to that of the last Great Depression is that the Republicans have not been completely successful in undoing the reforms put in place as a result of the New Deal.  Despite repeated attacks by Republicans our social safety net remains only damaged but not destroyed. It is not from lack of trying by Republican politicians.

Republican attempts to gut Social Security continue. Privatization keeps coming back to threaten the stability and viability of Social Security. Cutting Social Security benefits instead of increasing revenue seems to be the most effective avenue for the current attack. This approach is being pushed by most Republicans and some corporatist Democrats. A wiser economic approach would be to remove the income ceiling over which Social Security tax is not paid.

Why should almost all workers be taxed at over 13% while those making a million a year are paying closer to 1% and those making 10 million dollars a year are taxed at around 1/10th of 1% on their income? Social Security taxes are the most regressive tax system I know of in our current system. The poor and middle classes pay much, much more in percentage terms than the wealthy.

For decades, working people have been paying in far more than the current needs for each respective year of Social Security payments. These surpluses were “borrowed” by the federal government so they could fund annual deficits created by cutting taxes for the wealthiest Americans, cutting taxes on corporations by huge margins and nearly eliminating taxes on imports. It is only fair that corporations, wealthy Americans and foreign exporters selling in the American market pay higher taxes to fund these previous decades of “borrowing” since they reaped the benefits of that “borrowing”.

Republicans only want to look at cutting benefits instead of making Social Security taxes fairer by equalizing the Social Security tax rate for all income levels! These Republicans do not want to pay back the Social Security tax money borrowed by the federal government to fund tax cuts for the wealthy, fight two wars on credit and allow the near elimination of taxes on imports.

Sound economics says government should run surpluses in good economic times and deficits during economic downturns. Following this advice helps reduce the severity of economic cycles. Under the Republican Presidencies of Reagan and both George Bushes, we did exactly the opposite and created both the current downturn and the debt crisis. The vast majority of our total national debt developed under these three conservative Republican Presidents.

Currently, the Republicans in Congress have fought every measure to increase employment and help small businesses. They have fought all kinds of economic reforms that would curb corporate abuses of consumers, shareholders or workers. They have fought all attempts to curb excessive corporate political or economic power. They have been against any measures that would increase demand for goods and services or levels of employment.

By their actions, it is hard not to conclude that the Republicans want to worsen the economic downturn until it reaches Great Depression levels. The economic downturn was created by “Republicanizing” our economy and the Republicans want to blame the Democrats instead! With tons of corporate money behind them and a corporate dominated media helping them, it might just work.

Written by Stephen Crockett (host of Democratic Talk Radio http://www.DemocraticTalkRadio… and Editor of Mid-Atlantic Labor.com http://www.midatlanticlabor.com). Mail: 698 Old Baltimore Pike, Newark, Delaware 19702. Email: demlabor@aol.com.

News & Notes August 1, 2010

We’re already seven months into 2010 and Congressional Republicans continue blocking good legislation.  I’m not sure how they believe denying health care to the 9/11 emergency responders is patriotic.  Wasn’t it the GOP which made everything about ground zero holy?  Congressman Anthony Weiner made them pay for this vote:

State Senator Sean Logan revealed his true colors and went to work as a lobbyist for the University of Pittsburgh Medical Center.  Several people are scrambling to take his seat including Steve O’Donnell who ran for Congress in 2008, Marc Gergely, Bill Kortz, George Matta, Tina Doose, Joe Markosek and Jim Brewer.  A special election is assumed to occur with the general election in November.

Barbara McIlvaine Smith has rethought her retirement idea and decided to run for re-election to the State House.  I always look forward to her great smile when in the Capitol and am excited she will remain as a voice of reason and a vote for progressive reforms.

As a reminder to candidates I am busy writing a book and am not able to attend campaign events. I also will not be expending personal funds to cover campaigns unwilling to support The Pennsylvania Progressive and Democratic Talk Radio in return.

What’s up with Twitter?  I haven’t been able to sign on since last evening.  I’ll start going through Twitter news feed withdrawal pretty soon and that may not be pretty…

Politico and The Hotline seem to be at odds after one of the former’s people jumped to take the top job at the latter.  This morning Politico ran an attack piece at The Hotline calling it merely “warm.”  Hurt feelings anyone?

Pat Toomey donor and fund raiser Phyllis Schlafly made more outrageous statements against women this week.  At an event in Michigan Toomey’s gal pal said unmarried women support Barack Obama because “when you kick your husband out, you’ve got to have big brother government to be your provider.”  So remember that when your husband starts beating you up, commits adultery, and refuses to support his children:  it’s all your fault according to this Neanderthal.  Does Toomey agree?  He accepts her money so perhaps he does.

She proceeded to make a bad situation worse when she told Talking Points Memo this:  “All welfare goes to unmarried moms. They are trying to line up their constituency for Obama and Democrats against Republican candidates.”  I wonder how the millions of people who lost their jobs because of Congressman Toomey’s Congressional votes feel about being called “welfare Moms” because they’ve also lost their homes, retirement savings, dignity, self respect and are now the objects of Schlafly’s derision because their unemployment benefits ran out and they are on welfare?

Following the horrendous Supreme Court decision in Citizens United Congress is trying to pass the DISCLOSE Act hoping to close some of the huge holes punched into the democratic process by the Court.  Republicans are once again blocking this key legislation as they do everything which is non routine in Washington.

The GOP even voted against help for small businesses, one of its core constituencies.  Small businesses provide most American jobs and failing to allow them to hire will only prolong misery for millions of people in desperate need of jobs.

Charlie Rangel has served his constituents well but it is time for him to leave Congress.  Caught with his hand in the cookie jar he no longer fit to serve.  No one who breaks the rules, regardless of Party affiliation, should be honored by serving in Congress.  He screwed up big time and must leave.  He has done remarkable work for decades but, alas, the hubris got him too.

Pennsylvania residents are angry and outraged over shale gas drilling and the threats it poses to their water supplies.  Hundreds are turning out for public hearings and venting their frustrations at officials.  One farmer told how his goats died and the gas company told him he’d have to prove it.  Proving direct causal relationships is impossible in court and why do citizens have to prove this anyway?  The burden should be on the companies.

Meanwhile the state legislature is bending over for this industry but Pennsylvania is taking it up the arse.  The agreement among the industry and legislators is totally unfair, unsafe and a sell out.  Any State Re or Senator who approves this in the fall must be voted out of office in November.  Any who accept poison gas money have to be defeated.  Tom Corbett is at the head of that list as he has accepted more Marcellus Shale money than anyone.  We must hold these lawmakers accountable and we will here at this blog.  I will name names.

Andrew Breitbart appeared at a Tea Party event in Philadelphia yesterday and continued ignoring questions about his libel of USDA official Shirley Sherrod.  She has announced she is suing him and his website.  Perhaps Breitbart is finally getting his due after using his platform to destroy African Americans by doctoring and editing fraudulent videos.  The Tea Party should be ashamed to be associated with this man but he actually gives them credibility.

The Tea baggers seem to have no regard for those whom they invite to their events.  The farther someone is on the fringe of lunacy the more they like them.

State Treasurer Rob McCord issued a newsletter recently where he brags about the green investing being done with state funds.  I wasn’t much of a McCord supporter as I found him to be an arrogant asshole.  He says he has invested $125 billion in global clean technology since 2009.

Arizona has enacted their police state law and begun rounding up any persons they believe are undocumented.  People are being stopped for jaywalking and having cracked windshields.  In infamous Maricopa County 200 agents were released on the populace as soon as the law went into effect and round ups began.  No wonder so many legal citizens fled Arizona before this law took effect.  It took no time whatsoever for authorities in Arizona to begin violating people’s rights.  I won’t set foot in Arizona as long as this law is on the books.