Tag Archives: Dean Heller

Heller Rides (His Hobby Horse) Again

Hobby HorseThe U.S. Senate voted Tuesday evening on a cloture motion to stop the Republican filibuster of H.R. 4660, (Commerce, Justice, Science, and Related Agencies Appropriations Act, 2015 ) and the cloture motion was agreed to on a 95-3 vote.  The three Republicans voting to sustain the filibuster?  Paul (R-KY), Lee (R-UT), and Nevada’s own Dean Heller (R-NV). [roll call 200]

And, why might he have done this? Perhaps we have the answer in the following statement posted to Senator Heller’s web site:

“U.S. Senator Dean Heller (R-NV) has filed “No Budget, No Pay” as an amendment to the CJS Appropriations Bill (H.R. 4660).  The Heller No Budget, No Pay Amendment calls on Congress to adopt legislation requiring passage of a yearly budget and all twelve appropriations bills each fiscal year in order to receive pay.”

This particular hobby horse is a favorite toy for the Senator.   However,  proposal comes with a bit of a problem for the Constitution First Crowd — it’s unconstitutional.  See the 27th Amendment: “No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.”   And, while the proposition has a lovely tinkly sound for fiscal conservatives it is no more grounded in reality than Tinker Bell.

In an article speaking for the ethereal proposal, former Comptroller General David Walker inadvertently included the core of the problem for the No Labels folk: “Congress has only passed spending bills on time four times since 1952. The last time Congress passed both a concurrent budget resolution and all required spending bills on time was 1996.” [Politico]  And, there’s another historical problem:

“In four of the last five election years in which the Republicans held at least partial control of Congress (1998, 2002, 2004 and 2006), they didn’t pass a budget resolution. That includes three years in which Republicans controlled both chambers.” [WaPo 2012]

There’s some irony in a Republican proposal to “solve” a problem created by … Republicans.  What might we call an unconstitutional, ahistorical, and flimsy proposal which is full of “sound and fury signifying nothing?”  The usual label is Grandstanding.

The idea has a lovely ring on the hustings, makes for great sound bite fodder, but as evidenced by the underwhelming support received by Senator Heller during vote #200, it has about Zilch chance of passage.

 

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Heller and the ALEC by the back door minimum wage issue

Heller 2Yesterday’s post concerned Senator Dean Heller’s (R-NV) decision to support the Republican filibuster of an increase in the federal minimum wage, focusing primarily on the economic effects and the number of Nevada workers who might be immediately affected.  However, there was a second element to Senator Heller’s objection to the measure — that the states should be the ones to raise the minimum wage levels in their jurisdictions.   As if they would?

What might prevent a state from opting to increase the minimum wage?  ALEC.

The American Legislative Exchange Council is actively working toward the goal of enacting legislation reducing minimum wages and overtime pay, or stopping localities from doing the same:

“Since 2011, politicians backed by the American Legislative Exchange Council, which has hit the headlines for previous campaigns on voting rights and gun laws, have introduced 67 different laws in 25 different states on the issue.

The proposed laws are generally aimed at reducing minimum wage levels, weakening overtime protection or stopping the local creation of minimum wage laws in cities or states. Using language similar to “model bill” templates drafted by Alec, they were put forward by local politicians who are almost always Republican and affiliated with the powerful conservative group.” [TRS] (emphasis added)

Eleven of those bits of “model legislation” eventually became law, including in New Hampshire, Arizona, and Idaho.  For state legislators not inclined to do their own drafting, ALEC has conveniently provided a piece of fill-in-the-blank model legislation (pdf) for them.  In fact, according to the National Employment Law Project, ALEC is steadfastly opposed to  (1) minimum wage laws, (2) living wage legislation, (3) minimum wage laws for starting workers, (4) increases in overtime pay.  There is model legislation to preempt state efforts in all these areas. [NELP pdf]

However Jeffersonian Senator Heller may wish to sound about “state’s rights,” the design should be reasonably clear — conservative forces backed by deep pocketed corporate sponsors want to eliminate minimum wage legislation, prevent living wage bills, and preempt state and local efforts to enact protections for working people.  So, from the bully pulpit inside the Beltway, Senator Heller is free to pontificate about the desirability of state leadership in this economic realm BUT the practical effect is to toss the issue back into the state legislatures wherein ALEC can work its magic.

Nothing would please the Austerians more than to play the divide and conquer game — happily believing that lower labor costs will entice enterprises into low wage regions.   If, for example, Nevada were to eliminate its minimum wage, then in combination with other states with such draconian statutes, that would create pressure on other states to do likewise in order to be ‘competitive.’  We know this to be a pie in the sky solution because factors like transportation, infrastructure, work force experience and training, and resource availability are essential in the business location formula.  However, it does create the mixture necessary for a race to the bottom in wages and benefits. Just the sort of thing to make corporate revenues whistle and sing to the analysts.

The second problem with this plan is that while labor costs may be a major factor in manufacturing, they are not as crucial in other economic sectors.  We’ve looked at two types of retail operations before (restaurant and grocery); the important element for these small businesses is speed of service.  Long waits and long lines do not profitability make.   The more labor intensive the enterprise the more labor costs will be a factor, and this is illustrated by looking at the labor costs as a percentage of revenue for sole proprietorships, those little businesses the GOP purports to champion.)

The percentage for food service and bars is 36.74%, for agriculture 37.60%, for construction 53.64%, for health care 77.74%, for manufacturing 38.15%, for retailing 19.40%.  [BizStats]  We can drill down into the retail sector and find that the percentages are 20.43% for clothing stores, 13.66% for food and beverage establishments, and 6.48% for gas stations.   Indeed, for all those little sole proprietorship Mom and Pop stores to whom the Republicans appeal for support — the highest percentage never goes above 35%. [BizStats]

If we draw back and look at a large picture of productivity and worker compensation there’s not much to support Senator Heller’s apparent inclination to race to the bottom there either.

Labor productivity, as defined by output per hour, increased in 63% of the 52 service related and mining industries according to a BLS Study (pdf) using 2011 figures.  “Unit labor costs fell in 11 of 47 service providing industries Unit labor costs declined more frequently in industries where productivity rose, as productivity gains offset movements in hourly compensation.” [BLS pdf]

If productivity is increasing and unit labor costs are decreasing, then why would Senator Heller and his allies in ALEC want to eliminate minimum wage laws and prevent living wage legislation?

Let’s hazard the guess that the impetus to get even more productivity (more work per hour) at even less cost has everything in the world to do with Wall Street and not a heck of a lot to do with Main Street.

Nothing so delights the financial markets as the prospect of creating more “shareholder value” by reducing the inputs — reduced costs for materials, reduced costs for fixed assets, reduced costs for depreciation, reduced costs for employee (read: worker not CEO) compensation.  As the lady once said of the turtles:  It’s earnings reports, earnings reports, earnings reports, all the way down to the bottom.  [CarnegieScience]

And there we have it. It’s workers — racing all the way to the bottom, with no federal minimum wage to underpin their economic security — it’s American workers being told that if their counterparts in China are willing to work for $1.74 per hour then they are being “overpaid” here.  And — with Senator Heller’s state’s rights excuse greasing the downward ramp.

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Heller: 0.01% trumps Nevada’s 15%

Heller 2As of 2012 there were some 161,317 workers in the state of Nevada who would be directly affected by an increase in the minimum wage, out of a total workforce of approximately 1.068,842.  Of the 161,317 directly affected 139,064 were aged 20 or above.  [EPI pdf] A bit of punching on the plastic brains (read calculator) shows that 15.1% of Nevada’s workforce would be directly affected, and that 86.2% of these workers were NOT teenagers.

So, why would Senator Dean Heller (R-NV) vote to sustain the Republican filibuster of the minimum wage increase bill in the U.S. Senate? [Senate]

Senator Heller offered two explanations: (1) “Heller’s vote was rooted in his belief the minimum wage should be determined by individual states and not the federal government, “and this particular legislation is no exception,” according to his spokeswoman Chandler Smith.” [LVRJ] (2) “Smith added Heller was persuaded by a Congressional Budget Office estimate that the legislation “could cost our economy 500,000 jobs.” [LVRJ]

Let’s take the second part first — Senator Heller seems to have read one half of the report, or one half of the CBO’s conclusions.  The conclusions created a “mixed message:”  A popular Democratic proposal to raise the minimum wage to $10.10 an hour, championed by President Obama, could reduce total employment by 500,000 workers by the second half of 2016. But it would also lift 900,000 families out of poverty and increase the incomes of 16.5 million low-wage workers in an average week.” [NYT]

Evidently, it doesn’t take too much precision to convince Senator Heller to embrace half a report.  He missed the part wherein there were two options ($9.00 and $10.10) and he obviously missed this portion of the text:

In CBO’s assessment, there is a two-thirds chance that the effect of the $9.00 option would be in the range between a very slight increase in the number of jobs and a loss of 200,000 jobs. If employment increased under either option, in CBO’s judgment, it would probably be because increased demand for goods and services (resulting from the shift of income from higher-income to lower-income people) had boosted economic activity and generated more jobs than were lost as a direct result of the increase in the cost of hiring low-wage workers. [CBO pdf]

There’s our old friend “aggregate demand” again, if more workers have more money there will be more demand for goods and services and hence more employment.  Unfortunately, Senator Heller is still locked into his mantra “less regulation, more tax cuts (especially for the 0.01%), “rein in government spending” (unless that means loopholes for corporations), and supporting comprehensive energy policies (read: support the oil and gas giants and the Canadian XL Pipeline).” [Heller]  None of this is substantiated by the conclusion reached in the February 18, 2014 version of the report issued by the CBO. Nor is the conclusion all that solid.

“Once fully implemented in the second half of 2016, the $10.10 option would reduce total employment by about 500,000 workers, or 0.3 percent, CBO projects (see the table below). As with any such estimates, however, the actual losses could be smaller or larger; in CBO’s assessment, there is about a two-thirds chance that the effect would be in the range between a very slight reduction in employment and a reduction in employment of 1.0 million workers.”

With all due respect to those who toil diligently at the CBO to provide economic analysis, a conclusion that there is a 66% chance of a range of employment displacement from “very slight” to 1 million isn’t all that robust.   However, this seems sufficient to support Senator Heller’s proclivity for hugging his favorite talking points.

At the risk of over-simplifying his position, the core of it is essentially Trickle Down Hoaxsterism with Austerity for All and Prosperity for A Few.   Somehow we are to believe that cutting taxes (especially for the 0.01%) and deregulating Wall Street will “create jobs” … sometime…somewhere.  Meanwhile, social safety net programs are subsidizing the poverty level wages being paid by major corporations. [HuffPo]

Meanwhile back in the real world, and in the state of Nevada — of those 161,317 workers directly affected by an increase in the minimum wage increase 68,247 are non-Hispanic whites, another 54,572 are Hispanic, and 12,957 are African American.  [EPI pdf]

As to the argument that minimum wage jobs tend to be part time, the EPI statistics don’t support that myth either — 81,115 are full time employees.  56,971 are mid-time employment, i.e. from 20 to 34 hours per week, and only 23,230 are actually part time jobs with 20 hours per week or less.    Nor are the people working a minimum wage jobs necessarily “drop outs” — 64,606 are high school graduates, 40,187 have some college or post secondary education, 5,824 have an associate’s degree, 12,051 have bachelor-level degrees; leaving 38,639 with less than a high school diploma or its equivalent.  [EPI pdf]

The notion that when speaking of minimum wage workers we’re talking about teens, females, and drop outs isn’t sustained by the actual numbers, in fact, while there are more Nevada women holding down minimum wage jobs (83,079) there are 78,238 men trying to maintain life on the minimum wage in Nevada. [EPI pdf]

We might summarize by concluding that Senator Heller would far rather support further tax cuts for the 0.01%, and more deregulation of the Wall Street Casino, and yet more “austerity” for those who work for corporations paying below living wages, than he would care to support legislation to support at least 15% of Nevada’s working men and women.

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Backpedaling In the Brush: Heller, Bundy, and the Radical Right

BundyOh my, there is something to be said for not jumping on the Fox Faux News bandwagon in seemingly opportune moments — and Senator Dean Heller (R-NV) may be feeling a bit of that now?  [NVP]

Only days ago Senator Heller was calling Cliven Bundy and his Brigands “patriots.” [Roll Call]  Senator Reid’s commentary on this latest manifestation of the radical right (domestic terrorists) was “too broad a brush” for Senator Heller who was concerned about federal lands in Nevada and the proportionality of BLM operations.

And then Mr. Bundy started talking…..

He talked about people (read African Americans) in North Las Vegas. He talked about people sitting on porches with nothing to do. He talked about people getting government subsidies instead of picking cotton.  He talked about how “maybe they were better off” in those good old days…. [NYTUpdate: The Rachel Maddow Show provided context for Mr. Bundy’s remarks which explains the radical racism forthcoming from the “sovereign citizen” rancher.  (video)

Senator Heller moved quickly from characterizing Mr. Bundy and his cohorts as “Boy Scouts and Grandmothers,” to back pedaling as fast as he could: ” Chandler Smith, a spokesman for Mr. Heller, said that the senator “completely disagrees with Mr. Bundy’s appalling and racist statements, and condemns them in the most strenuous way.” [NYT]

The Nevada Democratic Party reacted swiftly, and noted that Senator Heller wasn’t the only Nevada Republican to associate him or herself with the Bundy Cause Celebre:

“These comments are reprehensible, and every Republican politician in the state of Nevada who tried to latch on to Cliven Bundy’s newfound celebrity with TEA Partiers and the militia movement should be ashamed of their actions.  If Dean Heller, Cresent Hardy, Niger Innis, Michelle Fiore, Adam Laxalt and every other Republican politician who tried to attach themselves to this man seemed desperate a week ago, now they look downright pathetic.  Every Republican elected official who risked inciting violence to gain political capital out of Cliven Bundy now owes the people of Nevada an apology for their irresponsible behavior of putting their own political future ahead of the safety of Nevadans.”

There were others.  There was Assemblyman Jim Wheeler (R-Douglas), and Senator Don Gustavson (R-NV14, Humboldt, Lander, Mineral, Pershing, Nye [part], and Washoe [part]) and Assemblyman John Ellison (R-NV33, Elko, Eureka, White Pine, Eureka) and Assemblyman Ira Hansen (R-NV32, Humboldt, Pershing, Lander, Mineral, Esmeralda, Washoe [part]) joining in the call for “a probe of the armed incursion” by the Bureau of Land Management, along with Assemblywoman Michele Fiore (R-NV4) [Ralston]

Why would anyone be particularly shocked that Cliven Bundy would receive accolades and support from any of these self identified and self described conservative Republicans?

Assemblyman Wheeler earned some notoriety last October when he told a Story County GOP crowd he’d ‘hold his nose and vote for slavery if that’s what his constituents wanted.’ [LVSun]  Which is probably why we generally don’t want the majority voting on minority rights.

Senator Gustavson happily signed onto the “10-4″ pledge as a member of the 10th’ers. “I have always been a strong supporter of the 10th Amendment and the Constitution itself including all of the “Bill of Rights”. I was a co-sponsor to AJR 15, (Claims sovereignty under the Tenth Amendment to the U.S. Constitution) during the 2009 Session of the Nevada Legislature. It is time for Americans and the States to take back their constitutional rights!

Assemblyman Ellison is the Hero of the Battle of Bunkerville, to some, — “If the(re) was a hero in the Bundy Ranch standoff it was Nevada Assemblyman John Ellison who when most other Nevada political leaders were heading as far away from the range war as possible, Ellison charged in and just may have prevented the standoff from exploding.” [CTV]  Assemblyman Ellison might have wanted to join the more cautious members of his party and distance himself from the racists and militia radicals who constituted the ‘protesters’ in Bunkerville — before Mr. Bundy started talking?

Assemblyman Hansen has something in common with Mr. Bundy, both have refused to pay fines for illegal operations.  Assemblyman Hansen has an ongoing feud with the Nevada Department of Wildlife who fined him for placing snare traps too close to a highway. They fined him, he refused to pay. [RGJ]  Sound familiar?

Assemblywoman Fiore seemed happy to bask in right wing praise for her TV time discussing the situation with Cliven Bundy, [CL] She’s also happy to tell us she’s a lifetime member of the NRA, who is pleased to support open carry on school campuses. [TNV] [HJ] Perhaps the question should be not why she’s backing the likes of Cliven Bundy, but why it took her so long?

And, no, the Nevada Democratic Party probably won’t be getting any apologies from these people or explanations as to why they chose to support a radical, racist, law breaker any time soon.

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A Well Tuned Whine at the Bundy Ranch

Bundy 2Just what do you say to lawbreakers when they refuse to cooperate with legal decisions?  In Public Lands Council vs. Babbitt the U.S. Supreme Court decided that, yes, the Bureau of Land Management did have the Constitutional authority to enforce the provisions of the Taylor Grazing Act of 1934, 43 USC 315.  What do you say to a freeloading rancher who lost in a Federal District Court in July 2013 (pdf) and again in October 2013 (pdf)?

Nevada’s own freeloading rancher, Cliven Bundy, doesn’t have any “right” to graze his cattle on public land. The land is not his property. He has no deed for the property, it is not for his sole and exclusive use.  [TWN]  There is no “land grab” because the land never belonged to Mr. Bundy in the first place.  How much simpler can the issue be? It is public land, the administration and management of the land is established in 43 USC 315, the law was confirmed as Constitutional by the U.S. Supreme Court on May 15, 2000 in a 9-0 decision from Chief Justice Rehnquist’s court.  [Oyez Project] And, not one but two Federal judges have informed Mr. Bundy he has no case.

It isn’t too difficult to come to the conclusion that Mr. Bundy is all for the U.S. Constitution — until a law he doesn’t personally like is declared Constitutional.  He may be all for law and order — until the law doesn’t suit his purposes.  What do we call the people who violate or ignore laws with impunity?  The answer is commonly “anarchists.”

Senator Dean Heller (R-NV) has another answer. He called them “Patriots.” [Roll Call]   Heller offered yet another example of his “Government as Bully” perspective, “I take more issues with BLM coming in with a paramilitary army of people, individuals with snipers, and I’m talking to people and groups that were there at the event, and to have your own government with sniper lenses on you, it made a lot of people very uncomfortable.”

Let us parse.  What’s a “paramilitary army of people?” On March 15, 2014 after twenty years of trying to get Mr. Bundy to comply with orders,  the Bureau of Land Management informed Mr. Bundy, by letter, that his cattle were “trespassing” and would be impounded.  Mr Bundy’s response — to ask the Clark County Sheriff’s Department for “protection.”  Bundy gives interviews by the hay wagon load and fans the fire of his displeasure. [WaPo]  Members of so-called freedom-fighters gather in Bundy’s support.   Bundy family members confront law enforcement personnel, and one is tazered after he kicks a police dog.

That “paramilitary army” of people were law enforcement personnel, BLM employees, and cowboys hired to round up and impound the cattle.

On the other side, a very visible group of Bundy supporters is the Oath Keepers organization, closely associated with the Tea Party, and infamous for proudly announcing what orders they will not obey. The organization includes members of the 3%’ers and former Arizona sheriff Richard Mack who refused back in the 90’s to enforce the Brady Laws.  [MJ]

Perhaps Senator Heller was ‘inartful’ using the term Paramilitary, but the word usually means an organization the structure, training , culture, and function of which is similar to the military, but is NOT considered a part of a state or federal military branch.  So, who has gathered a “paramilitary army of people?”  From the photographs of the scene the honors appear to go to Mr. Bundy.

But, Senator Heller is disturbed that people have their own government with sniper lens on them. It makes them uncomfortable.  At the risk of flippancy, when is it acceptable to have those who have broken the law for 20 years feel “comfortable?”

The radical right gives every appearance of wanting another drama — another Ruby Ridge, — another Waco, — another armed confrontation with authority, especially federal authority.  Senator Heller’s unfortunate use of the word “Patriot” offers sustenance to the fantasies of the radical right wing which feeds on these scenarios, and revels in the scripted Hollywood versions like Red Dawn.

Senator Harry Reid (D-NV) is more accurate calling antigovernment types like Bundy “domestic terrorists.” [previous post]  Certainly, there are euphemisms which might make the lawbreakers and their allies more “comfortable,” perhaps we could call them “puerile anti-authority activity advocates?”  However, it is not particularly helpful to apply euphemisms to assuage the tender sensitivities of extremists while ignoring the deleterious ramifications of their intentions, and covering their lawlessness with a patina of polite phrases.

The strident whining of the radical right extremists with its cacophony of hypocritical complaints is out of tune with a nation of laws — not of men.

 

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Questioning, Questionable, Values

** Senator Dean Heller (R-NV) would like to do something about the backlog of paperwork stalling veterans’ benefits, and has signed onto the 21st Century Veterans Benefits Delivery Act (S.2091) also sponsored by Senators Bob Casey (D-PA), David Vitter (R-LA), Jon Tester (D-MT), Martin Heinrich (D-NM) and Jerry Moran (R-KS).  Details of the bill can be found at Senator Casey’s web page.   Just a thought — but before we send “boots on the ground” into another armed conflict it might be advisable to consider the requirements necessary to provide services to the veterans of that conflict BEFORE leaping into the fray?  Do we really value the service of our members of the Armed Forces?

** Oh, spare me the rhetorical flourishes!  “Cliven Bundy’s standoff with the Bureau of Land Management over the agency’s roundup of his cattle will go down in history as a high-profile clash of Old West values with today’s federal regulations on the use of public lands and natural resources.” [LVRJ]  Or, might we opine that the squabble will be added to the list of Cranky Old Welfare Queens who want to graze their privately owned cattle on public land — at public expense?  And, what, pray tell, is an “Old West value?”  Before contributing a Hollywood stereotypical opinion on the matter — please note that the original ‘cowboys’ were vaqueros, Mexican, Spanish speaking cattle hands.  As for land use issues — the introduction of barbed wire restricting open range was a particular sore point [LIOW] exacerbating the trouble between farming and ranching interests.  Or, is Bundy harkening back to the Good Old Days when his hands could apply wire cutters to fencing around crop lands, decimating the neighbor’s alfalfa crops?  Was THAT an old west value?

**  The real face of poverty in America?  Recommended reading: Clarence Page’s contribution on the subject, reprinted in the Las Vegas Sun.  While the Republicans may be using “Urban” as a code word for African American, and “welfare” takes on a darker hue, the numbers are revealing —  of those participating in the WIC nutrition program 10.3% are Native American, 2.72% are Asian, 19.3% are African American, and 60.94% are White. [USDA]

Families receiving TANF aid are 31.8% White, 31.9% African American, and 30% Hispanic ethnicity. [HHS]

Do we value the lives of our neighbors — or just a little more or less so depending on the pigmentation?

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Senator Heller’s Happy Land: Retirement Income?

hellerSenator Dean Heller (R-NV) had this to say during the Senate Banking Committee’s hearing on retirement security:

“A growing number today’s workers are preparing for retirement through defined contribution plans, like 401(k)s, and Individual Retirement Accounts (IRAs), that allow families to accumulate financial assets from investments in stocks, bonds and mutual funds.  These retirement accounts, along with the development of rules allowing for increased after-tax contribution allowances in Roth plans, are further expanding individuals abilities to contribute earnings to their retirement plan.  Although these are positive developments, many Americans are still struggling to save for retirement.  Senator Dean Heller (R-NV) March 13, 2014″

True… sort of.  Did we notice the part about “workers are preparing for retirement through defined contribution plans?”   Senator Heller makes this sound like a ‘happy thing.’  In fact, there are some serious disadvantages to those defined contribution plans.

In a defined contribution retirement plan (1) the worker/investor takes all the risk; (2) unless the worker annualizes their account balance they can outlive their benefits; (3) benefits may not bear any relation to the working pay; (4) is more expensive to administer than a defined benefits plan; (5) outside service is not easily translated into a larger retirement account balance; (6) employees are not necessarily rewarded for continuing to work if the account balance is deemed sufficient or they want to transfer to a new employer’s program; (7) there is no post retirement benefit increase; (8) it is difficult to transfer a lump sum account into a steady monthly or annual income stream. [IllinoisMRF pdf]

In other words, for an employee to derive the full benefit from a defined contribution retirement plan that individual has to be a pretty savvy investor, and  has to think of him or herself as a ‘non-career’ employee.  There is also a bit of a calendar game going on.  Imagine the difference between a person’s retirement investment portfolio if the person were to retire in the wake of the Mortgage Meltdown of 2008 when the market closed at a low of 6,594.44 on March 5, 2009, [USecon] and the individual who retired as of 3:00 pm yesterday afternoon when the DJIA was 16,075. [Money]

There’s nothing which seems particularly ‘positive’ about putting family retirement plans into the hand of the Wall Street Casino and hoping they accumulate — and peak at just the right time — unless some ickiness happens like fund managers investing in Enron, or Lehman Brothers, or… whatever.

Timing is crucial. If we look at the real world, and the reality of savings in America then the Work Until You Drop Rule could easily come into play:

“The reality is that many DC plan participants are unable to retire or must find a way to generate additional income because their investments failed to meet their needs. A recent study by Fidelity Investments revealed that workers 55 and older had an average 401(k) plan balance of $233,800 in 2011. If those investors retired and put all of their money into high-risk investments (the only way to generate decent returns), they might be able to generate 6% per year. That’s about $14,000 in income.” [Smith InVest]

To put this in perspective, 2014 federal poverty level guidelines put a two person family at 100% of the poverty level based on an income of $15,730, and that would be if they placed their money in high yield high risk investments.

However, Senator Heller is correct, there has been a shift into the defined contribution plans, as noted in EPI testimony to the panel:

“In the private sector, defined-benefit pensions were largely replaced by defined-contribution plans, shifting costs and risks from employers to individual workers. In 1989, 62 percent of full-time private-sector workers had retirement benefits and these were divided roughly equally between those with defined-benefit pensions and those with defined-contribution plans, including roughly 20 percent of full-time private-sector workers who had both. By 2010, 50 percent of these workers had a defined-contribution plan and 22 percent had a defined-benefit plan, including roughly 13 percent who had both (Wiatrowski 2011).” [EPI]

And here’s the part wherein the rubber of Republican theoretical and ideological rhetoric meets the road of reality:

“In theory, the shift from defined-benefit pensions to defined-contribution plans could have broadened access by making it easier for employers to offer retirement benefits. However, participation in employer-based plans, which peaked at just over half (52 percent) of prime-age wage and salary workers in 2000, fell to 44 percent in 2012. This occurred even though the baby boomers were entering their 50s and early 60s, when participation rates tend to be high (Copeland 2013; Morrissey and Sabadish 2013).” [EPI]

What is the result of this shift?  Can we use the Inequality and Uncertainty tags?

“As 401(k)s replaced traditional pensions and the population aged, assets in individual and pooled retirement funds grew faster than income. By 2010, average savings in retirement accounts had surpassed the value of annual household income. However, retirement insecurity worsened as retirement wealth became more unequal and outcomes more uncertain (Morrissey and Sabadish 2013).”  [EPI] (emphasis added)

Here’s what that looks like with real numbers:

Mean household savings in retirement accounts increased from around $24,000 in 1989 to around $86,000 in 2010. However, the growth was driven by a small number of households with large balances. Median savings—the savings of the typical household with a positive balance—peaked at around $47,000 in 2007 before declining to $44,000 in 2010 in the wake of the Great Recession, even as the baby boomers were entering their peak saving years (Morrissey and Sabadish 2013).  [EPI] (emphasis added)

And about those ‘tax incentives’ to which Senator Heller refers as ‘positive developments’ — what of those?

“Retirement account savings are very unevenly distributed. In 2010, a household in the 90th percentile of the retirement savings distribution had nearly 100 times more retirement savings than the median (50th percentile) household, which had a negligible amount. The top 1 percent of households had over $1.3 million in retirement account savings. All told, households in the top fifth of the income distribution accounted for 72 percent of total savings in retirement accounts (Morrissey and Sabadish 2013). Assuming upper-income households receive tax subsidies at least proportional to their share of savings, this suggests that the lion’s share of tax subsidies for retirement savings go to high-income households.” [EPI] (emphasis added)

And so, in Heller’s Happy Land, the rich get richer and the “lion’s share of tax subsidies for retirement savings go to high income households.”   There seems to be something of a theme going on here — Lion’s Shares and Subsidies for the Top 1% — the Republican Concern Core.

Meanwhile, the Wall Street sector enjoys a cut of the savings at every jog and turn.  No wonder Senator Dean “Banker’s Boy” Heller is pleased with the trends?

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Default Dean Adds To His Tea Party Creds

Dean Heller DoubleOn Halloween 2013 Senator “Default Dean” Heller (R-NV) voted to sustain the Senate Republican filibuster of  Congressman Mel Watt’s nomination to be the Director of the Federal Housing Finance Agency. [roll call 226]   “Default Dean” added another Gold Star to his Tea Party Helper chart with his next vote, another vote to sustain a filibuster — this time of the nomination of Patricia Millett to fill a vacancy on the D.C. Circuit Court of Appeals. [roll call 227] * see previous post and The Republican Argument is Bogus. (pfaw)

Some Republicans groused that Rep. Watt, a Yale Law graduate with extensive experience in North Carolina politics, and a Congressman from N.C. in several sessions “lacked the experience to administer an agency as large as the FHFA.”   By the end of the day on October 29th it was obvious there were going to be Senate Republicans who would block an “up or down” vote on Watt’s nomination. [Reuters]

It would be instructive at this point to mention that the Federal Housing Finance Agency is the outfit that oversees Fannie Mae and Freddie Mac, the Mortgage Twins, and the objects of GOP calls for a full privatization of the secondary mortgage market.  Additionally, it should be noted that Rep. Watt’s nomination is the second to be blocked by Senate Republicans; former N.C. banking commissioner Joseph Smith withdrew his nomination to head FHFA in 2011 in the face of GOP opposition.  Finally, Rep. Watt is on record as supporting measures to allow bankruptcy judges to trim the principal owed on home loans.  It appears that this position is sufficient to render his service on the House Financial Services Committee inadequate to Republican purposes.  [BloombergNews]

Given the opposition to both Smith and Watts a sentient person could logically conclude that in this instance the GOP doesn’t want the FHFA to be fully functional.   If the deregulation of the secondary mortgage market is the desire outcome, and the repeal of the oversight agency is impolitic, then the obvious way to impede the regulatory process is to keep the agency headless.  That sentient person could also conclude that St. Peter’s nomination would be blocked, on the grounds that his previous experience was only as a “community organizer” and that his most recent housing experience comes solely from his residency in a gated community.

Senator Heller’s opposition fits neatly into this scenario when we notice that he is a supported of S. 1217 — a bill to privatize the secondary mortgage market.

“In 2008, Fannie Mae and Freddie Mac were taken into government conservatorship and given a $188 billion capital injection from taxpayers to stay afloat. As a result of this bailout, the private market has almost completely disappeared, and so nearly every loan made in America today comes with a full government guarantee.  Despite this unsustainable situation, there has still been no real reform to our housing finance system since the financial crisis.”  [Heller]

The statement from Senator Heller doesn’t whitewash history — it merely leaves out a significant piece — like anything that happened prior to 2008.  Prior to 2008 the Mortgage Twins were hybrid-privatized secondary market financial agencies, and in the process of behaving like privatized secondary market finance operators they succumbed to the same avarice infecting the rest of the secondary home loan market — cutting back on home loan requirements and passing along risky financial products in the name of “managing risk.”   Further, there was a ‘silent agreement’ implicit in the operations of the Mortgage Twins before 2008 that the products it sold into the financial market did have the imprimatur of the federal government.

To boil things down to the core — what Senator Heller’s support of S. 1217 means is that he wants a return to the pre-2008 system, without any federal regulation of the secondary mortgage market at all.  Why would Senator “Default Dean” Heller want to confirm any nominee to head the FHFA when he’s supporting a bill that would eliminate Fannie Mae, Freddie Mac, and the FHFA within five years of the bill’s passage?

S. 1217 is warmly supported by the American Bankers Association and the Mortgage Bankers Association, and why shouldn’t it since it contains the following lovely loophole:

“Amends the Securities Act of 1933 and the Securities Exchange Act of 1934 to exempt covered securities insured by FMIC from Securities and Exchange Commission (SEC) regulation in general and from credit risk retention requirements…”  [OC]

The “FMIC” is supposed to be modeled on the FDIC, and notice that according to S. 1217,  introduced by Senator Bob Corker (R-TN), if the FMIC issues any “securities” those are exempt from regulation by the SEC.   Those who like deregulation of the financial markets will love this one.

Time and again, Senator Heller is fond of telling anyone who happens to be within range that he “voted against the bailout” as if he were somehow beyond the pressure of the lobbyists from the Mortgage Bankers Association and the American Bankers Association — and yet rarely can one find a Senator so ready and willing to carry the water for MBA and ABA interests.

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Five Reasons Senator Heller’s Vote Is No Surprise

Heller 2Senator Dean Heller (R-NV) was one of 18 members of the United States Senate to vote against a bill to end the government shutdown, and to avoid the “fiscal cliff” of default. [roll call 219] This comes as no surprise. Absolutely no surprise.

For all of Senator Heller’s posturing as Mr. Moderate, his voting record has been indicative of a banner representative of Tea Party America.

#1. NO on the bill to avoid default and end the government shutdown. (H.R. 2775)  Roll Call 219.  Why would anyone be  surprised? Senator Heller also voted against the bill to end the 2011 stalemate.  [RGJ 8/11] In the 2011 vote Senator Heller was one of 26 members voting to dive over the edge; in 2013 he was one of 18.

#2.  NO on the TARP bill.  Otherwise known as the Emergency Economic Stabilization Act, and perjoratively called the Bank Bail Out, there were two votes on this measure in the House.  After it failed on the first attempt the stock market tanked. [roll call 674] Thus advised of the economic and financial consequences of a failure to put some props under the financial sector, the House held a second vote.  Once more, then Representative Heller voted against the measure. [roll call 681]   If there has been a bit of campaign material I’ve received from Mr. Heller that has not reminded me that he was “against the bank bailout” I must have missed it.

There was much to despise about the TARP bill, however, the hard sad unavoidable fact was that our credit markets had ground themselves into a solid freeze in October 2008.  While this isn’t a particularly good analogy — think of an engine which has run out of oil — at some point the lack of liquidity creates a seizure.  There was an appalling lack of liquidity, and we were in the midst of an equally appalling seizure in capital markets.  Representative Heller voted not to add any oil to the motor.

#3. Senator Heller has been a consistent proponent of the so-called Balanced Budget Amendment.  Of all the naive and misleading proposals offered to the American public, this ranks among the most egregious.  In 2011 he joined Senator Jim DeMint (R-Heritage Action) to introduce this bit of fiscal insanity. [DB]  A “balanced budget amendment” would do nothing to help state governments, it would do nothing to promote tax equity, and nothing to make the federal government operate like the state governments. [DB] And, NO, this is NOT like your family budget! as explained here, and here.

#4. He co-sponsored S. B. 712 with Senator Jim DeMint which would have summarily  repealed all of the provisions of the financial regulation reform enacted in the Dodd-Frank law. [DB]  Rep. Michele Bachman (R-MN) introduced similar legislation in the House of Representatives.  Under the ubiquitous heading of “gettin’ rid of guv’ment regulation,” Senator Heller would have undone every effort made by the Dodd-Frank Act to rein in corporate greed, require banks to maintain adequate capital, require financial institutions to adopt plans for unwinding failed banks, and protect consumers from mortgage and other financial frauds.

What doesn’t say “Tea Party” better than teaming up with former Senator DeMint and Representative Bachmann?

#5 Senator Heller has taken a consistent position in opposition to the Affordable Care Act.

“Senator Heller would gladly allow the insurance industry to continue to offer those junk  “defined benefits” plans, to exclude infants and children with “pre-existing conditions,” to spend less than 80-85% of the premiums they take in on actual medical treatment and services.   He would repeal the tax cuts available to small businesses which offer health care insurance to their employees, and would allow the infamous “Do-nut Hole” in prescription medication coverage to reopen.”  [DB]

All the benefits of the Affordable Care Act notwithstanding, Senator Heller would happily vote to repeal the ACA.

The titans of the financial sector and the major insurance corporations haven’t been Senator Heller’s only concern, he’s also taken the side of Big Oil, voting in July 2010 to protect BP from oversight in the wake of the Gulf Oil Spill, and voted not once but 8 times to protect tax breaks for the big oil corporations.  [DB] See votes 153, vote 78, vote 80, vote 1140, vote 835, and vote 40.

Still wondering where Senator Heller stands in relation to what remains of the Republican Party?

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Heller’s Horrors vs. The Constitution

ConstitutionIt seems there are some “Constitutional conservatives” who haven’t perused that august document, and Senator Dean Heller (R-NV) is one of them?  His response to the shutdown of the Federal government? Enact his “No Budget No Pay” bill. [Heller]  Lovely — there’s just one little problem with not paying members of Congress until the houses pass a budget — it violates the 27th Amendment.  “No law, varying the compensation for the services of the Senators and Representatives, shall take effect, until an election of Representatives shall have intervened.”  The Amendment was among the original ideas from the Founders, finally enacted in 1992, and it was intended to prevent members of the House and Senate from jacking up their salaries right before elections.

Then there’s the matter of raising the debt ceiling:

“Without a serious discussion about reducing our debt, I have to agree with then Senator Obama, who called an increase in the debt ceiling a ‘sign of leadership failure’ and a move that shifts the ‘burden of bad choices’ to future generations. Our nation cannot afford to continue raising the limit on our nation’s credit card without making the difficult decisions that prevent the country from incurring even more debt,”said Senator Dean Heller.”  [KRNV]

Oh, here we go again! The Think Of The Children Argument.  News Flash for the Junior Senator — raising the debt ceiling has NOTHING to do with incurring debt.  It has everything to do with paying the debts we’ve already racked up.   Senator Heller appears to believe this debt magically increased during the incumbency of President Obama.

“When President Obama came to office, our nation’s debt was more than $10 trillion. Five years later, our debt is nearly $17 trillion and growing fast. Democrats and Republicans must come together and agree on a long-term solution that places our nation on the path to fiscal solvency. Reducing wasteful spending and reforming the tax code are good places to start. As Senator Obama said in 2006, ‘Americans deserve better,’” said Senator Dean Heller.” [KRNV]

There was no magic involved. There is, however, some magical thinking.   First, when the Obama Administration took over in January 2009 it assumed the costs of the military operations in Iraq and Afghanistan.  Since the costs of these efforts are no longer glossed into “supplemental appropriations,” we’re going to have to look at the $800 billion gorilla in the room — the outright cost of operations in Iraq.   Then there’s the not-so-small matter of paying the veterans’ benefits to those who served in Iraq and Afghanistan. The total expense involved in these military efforts is projected to cost about $4 trillion. [Marketwatch]

Secondly, the United States (including Senator Heller) decided it was a dandy idea to cut taxes in war time — a reversal of what had been previously considered fiscally responsible thinking.  Let’s look at the elements driving the current level of debt one more time:

Source of National Debt

Thus, about 50% of the national debt which concerns Senator Heller so profoundly is a result of military operations in Iraq and Afghanistan and the Bush Era tax cuts (supported by Senator Heller.)  The darker blue segment of the graphic indicates the lost revenues from the Recession created by the collapse of the Housing Bubble.

Senator Heller would prefer not to compare the Bush and the Obama Administrations when it comes to policies which “place our nation on a path to fiscal solvency.”  If he did, he’d be highlighting the following information:

Bush Obama SpendingAnd here we have the answer to the question: Whose new policies created more federal spending? Was it Bush’s $5.07 trillion, or was it Obama’s $1.44 trillion?

As for which side of the aisle was more attentive to future spending levels, the staff of the Washington Post analyzed FY 2014 budget proposals and published the results:

Budgets Compared 2014Whose spending levels were lower over the next decade?

None of these analyses will prevent Senator Heller from continuing to bleat out the same talking points the GOP has been promoting with consistent enthusiasm — The Debt Is Rising! The Debt Is THE Problem!  Equally consistent has been the Republican demand that the social safety net (Social Security, Medicare, SNAP, TANF) be the target for cuts — not the Department of Defense; unless of course we’re speaking of increasing educational, housing, and health benefits for members of our military and veterans.

Now the Republicans threaten to shove the nation over the fiscal cliff, to which Senator Harry Reid (D-NV) responded:

“A vote to avert default is simply a vote to pay the bills. It’s not a vote to spend more money, to authorize new programs or to buy new things and more. It’s a vote to pay the bills the federal government has already incurred – bills for roads and bridges we’ve already built and warships we’ve already commissioned, as well as wars we’ve waged with borrowed money and tax breaks we’ve charged on the national credit card. A vote to avert default is a vote to pay the bills for all those things.”

That pretty much sums it up: (1) Pay the bills… (2) Pay the bills… (3) Pay the bills… as the Constitution says in Amendment 14 section 4.

*For the wonks in the audience, there is an excellent summary of debt ceiling legislation from the Congressional Research Service available in PDF.

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