By Hillel Aron
By Joseph Tsidulko
By Patrick Range McDonald
By David Futch
By Hillel Aron
By Dennis Romero
By Jill Stewart
By Dennis Romero
IF THE REPUBLICAN CONGRESS HAS a guiding principle, it must be that the government that governs least governs worst.
By now, the modus operandi of this Congress is clearly established: First, ignore a national problem, either because doing something about it would annoy your betters (be they the president or the guys who write your campaign checks) or because your ideology, which states that government should do nothing except help the rich get richer, blocks you from doing anything except helping the rich get richer. Thus, the Congress has performed no oversight or conducted any investigations of a government project that’s gone bad (the war) and another that didn’t go at all (the rescue of New Orleans during Hurricane Katrina). Thus, the Congress has done nothing about medical costs and the rising number of Americans with no insurance.
But there come times — usually just before elections — when public demand and fear of electoral wipeout force the Congress to act. Which brings us to the Congress’ modus vivendi: Address public needs just enough to survive elections, but in a way that still benefits your betters. That explains the Republicans’ prescription-drug program, Medicare Part D, which picks up some of the costs of seniors’ medications. A major factor in keeping drug prices high is Medicare Part D itself, which forbids the government from negotiating lower prices from the pharmaceutical companies, which are, of course, a mainstay of Republican campaign finance.
And it explains the latest masterpiece from the Republican House — the bill, passed at 1:30 a.m. last Saturday, that raises the minimum wage, and also makes cuts in the estate tax so large as to guarantee the defunding of half the government should this bill ever make it through the Senate. On the wage side of the equation, the bill would raise the federal minimum from $5.15 an hour — the subbasement level at which it’s languished since 1997; the lowest level in terms of purchasing power that the minimum wage has been at in the past 50 years — to $7.25, a raise that would be phased in over the next three years. On the estate-tax side, the measure would schedule reductions to go in place by 2011 that would decrease the tax from 55 percent on the largest estates to the rate of capital-gains taxes (currently 15 percent) for estates worth between $10 million and $25 million, and to 30 percent for estates larger than $25 million.
According to the calculations of the Center on Budget and Policy Priorities and the Economic Policy Institute, the number of workers who would benefit directly from the wage hike — that is, whose hourly wage is under $7.25 — is 6.6 million. The number of estates that would benefit from the reduction in taxes in the year it would take effect (2011) is 8,200. The workers, on average, would gain about $1,200 a year. The beneficiaries of the estate-tax reduction would gain, on average, $1.4 million. For what the Tax Policy Center estimates to be the richest eligible estates, the 900 worth more than $20 million in that year, the gain, on average, would be $5.6 million.
Who still believes in John Stuart Mill? The goal of House Republicans, apparently, is the greatest good for the smallest number.
OF COURSE, THAT GOAL HAS REAL consequences for the hundreds of millions of Americans whose incomes are in the middle of the income spectrum. The cost of showering all these millions on the Paris Hiltons of America would be somewhere between $300 billion and $750 billion, depending on widely varying baseline comparisons, during the first decade that the cuts are in effect. That means either a bigger federal deficit or offsetting cuts that could come out of the federal programs for health care or schools or Lord knows what.
And that’s just the large type. When we get to the small print, we discover that the minimum-wage hike will slash incomes for thousands of low-wage workers in California and five other states — the ones that have passed laws requiring employers to pay tipped workers (such as waiters) the full state minimum wage. If the new bill becomes law, restaurant owners would be able to withhold that wage by the amount of the tips their employees receive.
The Republicans, of course, didn’t want to raise the minimum wage at all. But Democrats — whom every poll shows leading the Republicans by at least 10 points when the public is asked which party it wants to control the next Congress — were hammering Republicans for their failure to raise the wage over the past nine years, while voting seven times to raise congressmen’s salaries, by a total of $31,000, during that time. House Republicans facing strong challengers (their number rises daily; the AFL-CIO is currently targeting more than 40 House seats held by Republicans) didn’t want to break for their summer recess without passing some kind of minimum-wage hike. Already, union activists, shepherding low-wage workers, had demonstrated at a number of their district offices, and the airwaves were filling with ads contrasting the Republicans’ hardhearted stinginess toward the working poor with their serial generosity toward themselves. Polling from the Pew Center this April showed public support for raising the federal minimum at 82 percent. Lest summer be hot and fall dangerous, they had to find some way to pass a hike. The way they found is almost certain not to become law, since the Senate has made clear it will kill the bill over the estate-tax cut, but then, the purpose of their bill is to take the heat off themselves, not those struggling to make ends meet.