Selective Deficit Disorder Strikes GOP Caucus Again

Senate Majority Leader Harry Reid (D-NV) begged his Republican colleagues to support S. 1845, the emergency extension of the unemployment insurance benefits for long term unemployed individuals, but the GOP refused on the grounds that there were no “offsets” to pay for the extension. [Hill]  Thus the Republican filibuster of the bill was sustained on a 55-43 vote. [rc 24]

Instead of cooperating on behalf of the unemployed workers in their states the Republicans launched their wish lists of immigrant bashing, Affordable Care Act hating, and assorted complaints in the amendment process.

Senator Kelly Ayotte (R-NH) and others wanted to repeal section 403 of the budget act — this was the sweetener — a proposal to repeal adjustments to military retirement pay.  However, that was followed immediately by the old “Social Security number for benefits” trick, in short Senator Ayotte was for extending unemployment benefits but only IF Congress agreed this wouldn’t help the children of immigrants. [TP] [DB]  Indeed, the Republican Senators were amenable to the passage of the bill if they could get things like the handover of mineral rights on public lands to state governments. [DB] [Amendments]

“Selective Deficit Disorder”

When the old complaints are combined with the new demands for budgetary offsets we get the worst of both worlds — immigrant bashing + selective deficit disorder.   The unemployment insurance benefits extension certainly isn’t the first example of the Selective Deficit Disorder phenomena:

“In Washington, for instance, the disorder was on prominent display in Congress’s new farm bill. Citing deficit concerns, House Republicans crafted the bill to include an $8 billion cut to the federal food stamp program. Yet, the same bill increased massive subsidies that disproportionately benefit wealthy farmers and agribusinesses. In all, the conservative American Enterprise Institute reports that under the bill, annual subsidies could increase by up to $15 billion.

In this textbook episode of Selective Deficit Disorder, deficits were cited as a reason to slash a program that serves low-income Americans. However, those same deficits were suddenly ignored when it came to handing over billions to a corporate special interest.” [Sirota, Salon]

See how easily that works?  When the benefit is to accrue to those who are unemployed, under-served, unfed, or under-educated, the Republicans require cuts in order to achieve “deficit reduction.” However, when we’re talking of subsidies to industry, to the Oil Giants, or to agri-business conglomerates — it’s a different story — no offsets are necessary or even desirable.   Further, the offset proposed by Senator Ayotte is pure politics and very little substance.

A Little Background Music

Let’s focus down on Senator Ayotte’s “offset.”  “Ayotte and Portman are among Republican senators planning to announce today an amendment to pay for the jobless benefits extension by requiring those who seek additional child tax credits to have Social Security numbers. The measure is aimed at stopping undocumented immigrants from collecting the credits.” [Bloomberg]

This flap goes back to a 2011 Inspector General’s report for the U.S. Treasury which estimated that about $4.2 billion had been allowed for undocumented workers in refundable child tax credits.  [IGT pdf]

Politifact provides some background and context for this report:

“Here we should explain that the IRS routinely seeks to collect both federal income taxes and federal payroll taxes from illegal immigrants, who are required to pay regardless of their immigration status. Because such workers don’t qualify for a valid Social Security number, the IRS issues a nine-digit Individual Taxpayer Identification Number. An ITIN doesn’t authorize the user to work legally in the U.S., and doesn’t entitle him or her to Social Security benefits.

But in addition to collecting taxes, the IRS has increasingly been making payments to low-income workers who pay no federal income tax but qualify for “refundable” credits. Generally, illegal immigrants don’t qualify for Social Security, Medicare or other federal benefits, except for emergency medical treatment in hospitals. And since passage of the 1996 welfare reform law, they have been ineligible for the refundable portion of the Earned Income Tax Credit as well.” [Politifact]

In short, Congress dealt with the Bush Tax cuts, the restrictions of the Earned Income Tax Credits, but didn’t address the child tax credits.  However, when the economy took a nosedive in the wake of the Wall Street Casino Crash the numbers of families whose incomes dived along with the trend increased. And, now we get to the numbers game.

The Numbers Game

Conservative and other sources estimate the cost of extending unemployment benefit insurance for three months at $6.5 billion. [Forbes] Would Ayotte’s “offset” account for that amount?

Nupe.  The Joint Committee on Taxation’s report says the revision to child tax credits would ‘save’ about $1 billion in 2014. [JCT pdf] According to the JCT if the revisions were extended over a ten year period we’d be closer to the offset, and actually over a bit with a savings of $7.6 billion.

There are two flies in this ointment. First, the JCT assumes that the laws won’t be changed.  Secondly, there may be more ‘savings’ because the statutes underpinning the child tax credits were set to expire.  Now we’d have to calculate how much ‘savings’ accumulates from the expiration of the credits and how much of it comes from enforcement of restrictions upon who can receive the child tax credits in the first place.

At least superficially we know that there might be $1 billion in savings by a reduction in the number of families eligible for child tax credits in 2014, which is a bit less than 1/6th of the “offset” required to “pay for” the extension of unemployment insurance benefits.  Only if the three months extension were paid for over a decade would the cost be truly offset, and then some.   The $4.2 billion is already an antique figure, and no one is estimating that $4.2 billion could be recouped in a single year.

There’s probably nothing wrong with amending the child tax credit rules to make these credits align with the requirements for the Earned Income Tax Credit, but it’s misleading to assert that such a conformation would be a “pay for” in terms of the extension of unemployment insurance benefits over a three month period.

The Political Game

Unfortunately for the Republicans the ‘pay for’ advocated by Senator Ayotte and others serves to highlight their distance from the Hispanic community, which has already noticed the obstructionism and stalling in the House of Representatives on Comprehensive Immigration Reform policy.  The ‘pay for’ merely adds another arrow to the quiver for the Democrats.  Of all the offsets which might have been offered, the GOP chose to adopt the one which is most ardently opposed by some Hispanic leaders.  [Examiner LaRaza]

If one were to propose a counter-productive strategy it might be that the Party advocate a ‘pay for’ which isn’t exactly a ‘pay for,’ and which has the additional element of attacking a community toward which the Party was supposed to be making “outreach” efforts.

Thus we have a recent farm bill in which subsidies for industrial farming are retained, the profitability of the enterprises notwithstanding; and, a stance on unemployment benefit insurance which ties an unpopular tax adaptation to a social safety net program.  What other conclusion might we draw other than the GOP has decided it can hold its majority in the House of Representatives and perhaps gain control of the Senate in the 2014 elections, by merely serving corporate interests and passing enough anti-abortion bills to intrigue the movement conservatives?

Until this vision is demonstrated inaccurate the GOP will probably continue to have Selective Deficit Disorder, waving the Decrease the Deficit Banner when it seems expedient to do so, and showing its anti-immigrant colors when the base is in need of reassurance.

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