Friday, January 14, 2011

Someone Forgot to Reinvent the Michigan Republicans

Same old divisiveness, same old cruelty that suggests the poor and working class should be first in line for "shared sacrifice" while we hand out more tax cuts for business interests. Meet the 96th Michigan Legislature, controlled by a Republican majority that is running the same old playbook they devised decades ago. First, we bust what is left of the unions...

New House Speaker Jase Bolger said a labor law review by his fellow Republicans would be conducted to gauge whether making Michigan a “right-to-work” state makes economic sense and would create jobs.

While Gov. Rick Snyder said throughout the campaign that having a right-to-work discussion would be too divisive at a time when he says management and labor have to work together, Bolger said Wednesday nothing should be off the table.

Right-to-work laws are becoming increasingly irrelevant with each passing day, a leftover theory from our manufacturing past that really doesn't apply in the new global economy. Manufacturing jobs are not moving to right-to-work states these days (and looking at the auto assembly and parts employment totals by state as of Dec of 2008, you wonder if that was an overblown myth in the first place); they are moving to Mexico and overseas, or they are being replaced with automation. Concessions made by UAW members in 2007 and during the bankruptcy restructuring in 2009 got us to wage parity with the foreign automakers, eliminating that tired argument. And if right-to-work laws somehow guarantee jobs, why is it that 5 of the top 10 states with the highest unemployment rates as of November of 2010 are right-to-work states?

Right-to-work is designed to keep wages low and thwart attempts for workers to organize, while further depressing what is left of a natural Democratic constituency. Win-win for those Republicans that are looking to serve the interests of business and score partisan points at the same time, so it's not surprising that it would be one of the first initiatives they would introduce.

Moving on, we reincarnate the specter of welfare recipients milking the system, because people with small children that have to jump through a myriad of hoops to pull in an average of $428 a month are somehow still living the high life out there. Cut 'em off now, make it retroactive...

House Republicans also intend to call a “strict” 48-month time limit for welfare benefits, which currently can be extended past 60 months if recipients are working or in job training. And he wants to review and correct what he called “abuse” of the Bridge Card food assistance program.

Bolger would start the clock retroactively to provide current and future recipients an absolute maximum of four years of assistance.

“Michigan should help its citizens break the cycle of dependency, not create one for them,” Bolger said.

Michigan's welfare rolls actually declined by 1.7 percent between June of 2008 and June of 2009, a period of time that saw our unemployment rate skyrocket as the national recession kicked into gear. Getting benefits is difficult in the first place; you must have minor children, and you cannot have more than $3,000 in assets or earn more than $812 a month. You also have to meet strict requirements as far as training and a job search is concerned. As a result, at the end of 2009, there were only 120,000 families on what is now known as "welfare" - and that funding comes mainly from the federal government.

$362.9 million in Family Independence Program benefits to more than 120,000 families and households with minor children. Of this total, more than $300 million of the benefit dollars were provided by the federal government, not state taxes. These benefits help families pay rent and house payments, property taxes, utilities, clothing and other living costs, and the money is primarily spent in local communities.

Republicans are targeting those families that somehow made it to the one-year extension apparently, claiming that it will save $45 million. And the key word here is indeed "families" - the only people left on what is referred to as welfare are those with children, and that $400 a month might be the only thing keeping them in a home. Singling them out to be the first to sacrifice is beyond cruel.

As far as Bridge Card abuse, you probably have heard the stories of a few of our more colorful scammers, sensational examples that make the local news. But as a percentage, the incidents of abuse are actually very small. With nearly 2 million people receiving food assistance, in 2009 DHS ran 7,143 investigations and found 5,214 cases of fraud. Not exactly your major crime syndicate in action. Rep. Dave Agema suggested putting pictures on cards at a high cost to taxpayers - but states that have tried that found it didn't make any difference in cutting down fraud, and discontinued the practice. While reports should be investigated, suggesting that "cracking down" should be a high priority is simply another canard to further demonize the poor.

The biggest attack on low-income families though comes in the form of eliminating the Earned Income Tax Credit, a tax break that goes to families with children, and is more often than not put right back into the economy. Even Nancy Cassis had a change of heart about eliminating that in 2008. So, while Republicans insist that businesses receive more tax cuts that may or may not be invested in Michigan, they are in effect raising taxes on low-to-moderate income working families - and that is guaranteed to remove that spending from our economy.

“While we recognize the desire for everybody in the state to share in the sacrifice, poor people are being asked to be the sacrificial lambs. The Michigan Earned Income Tax Credit, which helps low- and moderate-income working households, should not be the first credit considered among Michigan’s $36 billion list of tax expenditures, including tax breaks for big corporations.

Eliminating the EITC will put more of the tax burden on those who can least afford it – the families of minimum wage workers and those who do important work in our state including janitors, waitresses, home care aides and child care workers.

Also, the credit is a proven economic stimulus, and its elimination will hurt small business in local communities across the state. A report by the Anderson Economic Group finds that for each $1 in federal earned income tax credit, $1.67 is generated in economic activity.

In addition to targeting the poor, the House Republicans are also promising to review and possibly repeal tax credits in those areas that have created jobs in the past few years; "new or expanding businesses, filmmakers, battery makers, hybrid vehicle research and neighborhood enterprise zones", according to the Freep. Throw in brownfield redevelopment as well. It seems that Republicans are intent on eliminating recent efforts that have brought us success so they can rerun the same plan that failed Engler (and Michigan) in the early 90s, or perhaps this is a dog-whistle to the lobbyists to commence with the free lunches and campaign contributions in an attempt to protect your client's current tax breaks. Someone might want to keep an eye on that as the Republicans pick "winners and losers" during these reviews.

The wild card in all of this is still Rick Snyder - will he keep his promise to make sure that "no one is left behind", or will he simply become this century's version of John Engler? Time will tell.

If he wants to avoid that fate, he better get to work on reinventing the archaic policies of his own party first.