ECONOMY
Redistributing To The Rich

Seizing on comments Sen. Barack Obama (D-IL) made to "Joe the Plumber," Sen. John McCain (R-AZ) campaign has argued that Obama's economic policies would redistribute the wealth of hard working Americans and provide "just another government giveaway to others." "The redistribution of wealth is the last thing America needs right now. The goal is not to redistribute wealth, but to create it," McCain said during an event in Manchester, NH. But as the Tax Policy Center points out, "today's tax code is riddled with examples of government 'taking' money from one taxpayer and giving it to another." "[F]or decades, government has used the tax code for much more than raising money. These days, redistributing tax revenues are the principal way government encourages people to do what it wants and discourages them from doing what it doesn't," TPC wrote. In fact, during the last eight years, President Bush's regressive economic policies  have effectively redistributed the nation's wealth to the richest Americans. According to a recent report released by the Organization for Economic Cooperation and Development (OECD), "the United States has the highest inequality and poverty in the OECD after Mexico and Turkey, and the gap has increased rapidly since 2000." Unfortunately, McCain's proposed economic policies would give even more wealth to the richest Americans, exacerbate the nation's income inequality, and further erode opportunities for social mobility. 

BUSH REDISTRIBUTED TO THE WEALTHY: An analysis by the Center for American Progress Action Fund shows that President Bush's economic policies have "redistributed wealth to the richest Americans and left the majority with stagnating wages and declining household incomes." Looking at the effects of the first three Bush tax cuts, the Congressional Budget Office concluded that "the percentage by which the effective tax rate was cut for high-income families was nearly twice the rate cut for those in the middle of the income spectrum." Meanwhile, the administration's failure to raise the minimum wage coupled with its poor enforcement of federal wage and hour laws, trade agreements, and union rights further undermined the economic security of middle and lower-income Americans. Data prepared by the IRS from tax returns filed during the post-9/11 recovery (2002 to 2006) reveals that household income grew by $863 billion during the period. "The 15,000 families at the top of the income scale saw their annual incomes go from about $15 million a year to nearly $30 million," accounting for more than 25 percent of all of the growth in income for the entire country. The remaining 1.7 million families in the top 1 percent of households accounted for nearly another 50 percent. But while the "top 10 percent of families accounted for 95.3 percent of the nation's income growth between 2002 and 2006," the average real income for families in the bottom 90 percent of households increased by about $300 to a little less than $30,700."

MCCAIN WOULD DOUBLE DOWN: McCain claims that "in this country, we believe in spreading opportunity." But his Bush-like economic policies would only further America's income inequality. In fact, by extending Bush's tax cuts to the wealthy and proposing $175 billion in tax breaks to America's largest corporations, McCain's regressive economic agenda would redistribute wealth to the richest Americans during a period of stagnating wages and growing economic anxiety. The bottom 60 percent of taxpayers would see only 12 percent of the benefit from McCain's plan to extend Bush's tax cuts, while over 100 million middle class households would receive nothing from McCain's proposal. Moreover, even though corporate profits increased by an estimated 66 percent between 2000 and 2006, McCain's plan to slash the corporate tax rate to 25 percent from 35 percent would give even more benefits to America's richest corporations. According to a Center for American Progress Action Fund analysis of McCain's plan, the 200 largest companies stand to gain $45 billion a year from McCain's proposal. Highly profitable industries like energy companies and merchandising and retailing companies would receive billions from additional tax breaks.

MOBILITY THREATENED: America's income concentration is at its highest level since 1928. According to the OECD report, "the richest 10 percent earn an average of US$93,000 -- the highest level in the OECD. The poorest 10 percent earn an average of US$5,800 -- about 20 percent lower than the OECD average." But income inequality is cause for even more concern than the simple numbers suggest, since it also has an effect on mobility. In fact, just "7 percent of children born to parents in the bottom wealth quintile make it to the top quintile in adulthood," and "36 percent of children born to parents in the bottom wealth quintile remain in the bottom as adults." As OECD Secretary General Angel Gurria has pointed out, "greater income inequality stifles upward mobility between generations, making it harder for talented and hard-working people to get the rewards they deserve."

Under the Radar

CIVIL LIBERTIES -- 'PUBLIC' WARRANTLESS WIRETAPPING REPORT MARKED 'CLASSIFIED': When Congress updated the Foreign Intelligence Surveillance Act (FISA) last summer, lawmakers largely caved to the Bush administration's demands. One of the few areas where Congress actually demanded accountability on the part of the Bush administration was the inclusion of a "key-provision" requiring "the inspectors general of U.S. intelligence agencies to produce the first-ever public report" on the administration's wiretapping program. But as Newsweek reports, "[W]hen the inspectors general recently submitted their first 'interim' report to Congress under the measure, it wasn't made public." In fact, "the brief document, written by CIA inspector general John Helgerson, was marked classified." House Intelligence Committee Chairman Rep. Silvestre Reyes (D-TX), responded to Helgerson with a letter asking him to "please explain why you're not following the law." Further, Reyes asked that Helgerson issue a "preservation order" to ensure that the Bush administration doesn't destroy records pertaining to the wiretapping program "before they walk out the door" in January 2009. It is not clear why the report was deemed secret. According to Newsweek, "Sources familiar with the [secret] interim report said there is nothing all that sensitive about it" because the document simply "outlines the 'scope' of the review that the inspectors general plan to conduct in preparation for the final report."

HUMAN RIGHTS -- U.S. RANKS 36TH ON PRESS FREEDOM LIST: Reporters Without Borders (RWB) released its annual Press Freedom Index yesterday. According to the new report, "press freedom in many places is particularly damning for one country that purports to be a beacon for the rest of the world as far as human-rights protections and freedom of thought and of expression are concerned. That country is the United States." RWB ranked America 36 out of 173 countries, a spot also shared by Bosnia and Herzegovina. Iceland ranked first, with Ghana, Slovenia, Trinidad and Tobago, Surinam, and Jamaica also ranking higher than the United States. In one of the main conclusions from the report, RWB found that "[i]t is not economic prosperity but peace that guarantees press freedom." The report also singled out "wars carried out in the name of the fight against terrorism" as a cause for the steep decline in press freedoms around the world.

ECONOMY -- COX, GREENSPAN, SNOW AGREE: FREDDIE MAC AND FANNIE MAE DID NOT CAUSE THE FINANCIAL CRISIS: According to many conservatives, the current financial crisis was caused by Freddie Mac and Fannie Mae making loans to low-income Americans. Yesterday, during a House Oversight Committee hearing, Rep. John Mica (R-FL) revived this argument. However, when Chairman Henry Waxman (D-CA) asked the witnesses at the hearing - former Fed chairman Alan Greenspan, SEC chairman Christopher Cox, and former Treasury secretary John Snow -- "do any of you believe that [Fannie and Freddie] were the cause of this financial crisis," all three said no. Federal housing data backs up this conclusion -- it was "the private sector, not the government or government-backed companies," that was behind the soaring subprime lending crisis. Dean Baker, co-director of the Center for Economic and Policy Research, noted that while Fannie and Freddie "certainly contributed to the bubble, it is absurd to point to them as principle culprits," as "their market share actually fell as the [subprime] bubble grew," dropping from 50.1 percent in 2002 to just 34.8 percent in 2006.

Think Fast

35 percent: The share of Americans who are "now 'very concerned' that they or someone else in their household will be out of work and looking for a job within the next twelve months," according to a new CBS News/New York Times poll. The percentage is a 12-point increase from last week.

Sen. Chris Dodd (D-CT) said President Bush should consider nominating his successor's Treasury secretary to facilitate a "seamless transition" during the financial crisis. Dodd said Bush should send the nomination to the Senate in time for a "lame-duck" session in mid-November.

"After the White House intervened, the Environmental Protection Agency last week weakened a rule on airborne lead standards at the last minute so that fewer polluters would have their emissions monitored," McClatchy reports today. The White House Office of Management and Budget forced the EPA to slash they number of sites it would regulate by 60 percent.

In its final weeks, the Bush administration will try to "revive a stalled crackdown on U.S. companies that hire illegal immigrants." If a federal court agrees, the government "could begin mailing notices to 140,000 employers regarding suspect Social Security numbers used by an estimated 8.7 million workers, pressuring businesses to either resolve discrepancies or fire workers within 90 days."

"The U.S. is the only industrialized country where youths are less likely than their parents to earn a [high school] diploma," a new report from the Education Trust finds. Nationally, one in four children drop out of school before graduating, according to the report.

And finally: Will Ferrell reprised his role as President Bush and joined Tina Fey as Gov. Sarah Palin (R-AK) for a "Saturday Night Live" election special yesterday. In the segment, Bush offered an unwanted endorsement of the McCain-Palin ticket and declared the White House a "bummer-free zone." Todd Palin was also dispatched to find Sen. John McCain (R-AZ), who was hiding in the Adirondacks to avoid being photographed with Bush. Watch it here.

Good News

Sen. Ted Kennedy (D-MA) has been "orchestrating meetings with lobbyists and lawmakers from both parties to craft legislation that would greet the new president with a plan to provide affordable medical coverage to all Americans, a measure he has called 'the cause of my life.'"

State Watch

CALIFORNIA: Prop. 2 ballot initiative gives farm animals "the opportunity to spread their hooves and claws, rather than being confined to restrictive cages."

NEW JERSEY: "Without a large infusion of federal aid to struggling homeowners, New Jersey could see its rapidly growing foreclosure problem spread from its cities to its more affluent suburban areas."

TEXAS: "Texans earn more than they did eight years ago, but their health insurance premiums have jumped six times faster than their wages and gone up faster than the national average."

Blog Watch

THINK PROGRESS: Former Federal Reserve Chairman Alan Greenspan uses the Bush excuse: Financial crisis was "broader than anything I could have imagined."

WONK ROOM: Sen. Norm Coleman's (R-MN) plan for economic recovery: A variety of spending freezes.

YGLESIAS: Idaho, carbon hero.

TAPPED: When it comes to unemployment in America, the levies are breaking.

Daily Grill

"Just and open societies protect and rely on the freedom of the press. That freedom is enshrined in the First Amendment to the United States Constitution, because freedom of speech is integral to a free society."
-- White House statement on World Press Freedom Day, 5/1/08

VERSUS

"On a list of 173 entries...the United States comes in only at number 36."
-- San Francisco Chronicle, 10/23/08, on the annual Press Freedom Index