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A few well-written words can convey a wealth of information, particularly when there is no lag time between when they are written and when they are read. The IPS blog gives you an opportunity to hear directly from IPS scholars and staff on ideas large and small and for us to hear back from you.

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Entries tagged "Senate"

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Paul Wellstone, We Miss You

October 25, 2012 ·

Ten years ago today, the two of us were an hour into the first big coalition meeting to oppose the impending U.S. war against Iraq, surrounded by dozens of leaders of a wide array of movements: peace, civil rights, women's rights, environmentalists, labor, social justice, and many others. Then, we noticed some people walking to the back of the room and returning with tears streaking down their faces.

Pinback button created in memory of U.S. senator Paul Wellstone, killed in a plane crash on October 25, 2002. Photo by Minnesota Historical Society. Someone interrupted the meeting with the tragic news. One of the great progressive leaders of our time, Senator Paul Wellstone, had just died in a plane crash campaigning in his home state of Minnesota. The room, just seconds before buzzing with ideas, fell silent. In shock, we took a few minutes to get into small groups and remember Paul, the people's Senator, the anti-war Senator.

We knew that Paul would have wanted us to get back to work quickly in this historic task, so after 15 minutes, we went back to creating what would become the broad, overarching coalition to fight the wars in Iraq and Afghanistan: United for Peace and Justice. UFPJ quickly grew to over 1,000 organizations, and we always thought of Paul as we walked into its meetings.

As we think back to that day, we are flooded with Paul memories. Paul proved that progressives without much money could win statewide elections. He visited every corner of Minnesota in a Volkswagen bus during his successful Senate campaigns. He was a stalwart internationalist and he had a poster of our IPS colleague Orlando Letelier, who was assassinated by the Chilean dictatorship, on the wall of his office.

Paul cared deeply about poverty. When he was contemplating a presidential bid in the late 1990s, he retraced the route of Bobby Kennedy's southern tour to highlight poverty and racism in this country. When IPS co-hosted Paul's report back from that tour at Howard University, he spoke with great passion about the human face of poverty and inequality in this nation. In the end, powerful back pain from his days as a wrestler precluded him from running for president in 2000.

Today, Paul would be protesting against the inhumanity and illegality of drone strikes. He would be demanding the end of the U.S. war in Afghanistan now, and he'd be explaining to people the wisdom of making major cuts to the U.S. military budget. He would be leading the charge for inequality-busting measures like the Robin Hood tax. He would be joining the protests against unjust budget-cutting deals by his colleagues. And, he would be standing with people fighting expulsion from their homes by predator banks.

Our great challenge today is to shift this nation's course from our current casino and militarized Wall Street economy to a democratic, peaceful, and green Main Street economy. Paul would be leading the charge.

Thanks to Occupy, Senate Looks at Inequality

February 15, 2012 ·

I had the opportunity to testify on inequality before the Senate Budget Committee last week. No one seems to recall the last time the committee devoted a whole hearing to this issue. So you can add this to the signs of the Occupy movement's impact on our political discourse.

The Occupy Movement launched on September 17th, and got to the Senate Budget Committee last week. Photo by David Shankbone.Here's a link to my written testimony. My oral statement is below.

On the Democratic witness side, I was joined by two excellent economists: Jared Bernstein, who served as Vice President Biden's economic adviser and is now with the Center on Budget and Policy Priorities, and Heather Boushey from the Center for American Progress. Jared gave an incisive summary of recent inequality and mobility trends, while Heather focused on some of the most disturbing impacts of extreme wealth concentration on health care, education, and other key middle class indicators.

The Committee's Ranking Member, Senator Jeff Sessions, and Republican witnesses tried to raise doubts about the inequality data, questioning whether things were really as bad as they look. I didn't envy them the task of being an inequality denier in the face of overwhelming evidence to the contrary. See below for the video and script of my remarks: 

 

Oral Testimony of Sarah Anderson Before the Senate Budget Committee, Feb. 9, 2012

Thank you very much for this opportunity. I believe inequality is the pressing issue of our time, and I applaud the committee for giving it this level of attention.

Let me begin by emphasizing the good news, which is that our nation has tackled this problem before. A century ago, we had extremely high levels of inequality comparable to those we are seeing today. But over several decades, policymakers managed to use fair taxation and effective social programs to build the world's strongest middle class. And there is much we can learn from that experience.

At the Institute for Policy Studies, we have particular expertise in one key driver of inequality that has not yet been mentioned -- and that is executive compensation.

For nearly 20 years, we've tracked the upward spiral in CEO pay. My written testimony includes several indicators. Let me just mention that the ratio between CEO and worker pay has risen from 42-to-1 in 1980 to 325-to-1 in 2010 and average S&P 500 CEO pay is about $11 million.

Beyond contributing to inequality, excessive compensation is a problem because the chance of hitting such massive jackpots gives executives incentives to behave in ways that may bump up short-term profits and their own paychecks, while undermining our nation's long-term economic health.

In our annual Executive Excess reports, we've looked at corporate behaviours such as tax dodging, mass layoffs, reckless financial activities, and offshoring jobs. All of these appear to boost CEO pay. But they have dealt one body blow after another to the American middle class.

Policymakers should also be concerned about executive pay because extreme inequality within firms is simply bad for business. It is now well-documented that when companies have massive gaps between their top and bottom earners it hurts employee morale and productivity and increase turnover rates.

Congress has taken some recent steps to rein in executive pay and I'd like to highlight two:

The first is the provision in the Dodd-Frank financial reform legislation that requires all U.S. corporations to report their CEO-worker pay ratios, which could encourage corporate boards to narrow these gaps. Unfortunately, there's been intense backlash from lobby groups representing CEOs, and the SEC has delayed this important transparency measure.

The second executive pay reform I'd like to highlight is a little-known provision in the TARP bailout bill that capped the tax deductibility of executive compensation at bailout firms at $500,000. A similar provision was included in the health care reform legislation for insurance companies. If such deductibility caps were extended to all U.S. corporations it would fix a loophole that encourages excessive pay. As it is now, the more they pay their CEO, the more they can deduct from their taxes.

Beyond the issue of executive pay, we clearly need a broader agenda to reverse extreme inequality. If you look back at the previous era, it's clear that one of their most important tools was progressive taxation.

In my written testimony, I have three charts that look back over the past century, showing that the decades of the highest top marginal tax rates were also the decades of the lowest levels of inequality and the highest GDP growth rates.

I end with seven tax reforms that could get us back to healthier levels of inequality. I'd like to highlight one that deserves more attention. This is the idea of placing a small levy on trades of stocks, derivatives, and other financial instruments. Such a financial transactions tax could both generate substantial revenue and discourage the short-term speculation that has driven up financial sector pay while contributing little to the real economy.

In conclusion, I want to acknowledge that reversing extreme inequality will be a long-term challenge. But we have transformed a highly divided nation into a more stable and equitable society before. And we can certainly do it again. Thank you.

The Midterm Elections and What They Will Mean for the Progressive Movement

October 5, 2010 ·

IPS associates Steve Cobble and Bill Fletcher Jr., as well as IPS fellow Karen Dolan discuss what the midterm elections might mean for progressives and our various issues.

One Year After the Recovery Act...

October 1, 2010 ·

With the Democrats facing a tough mid-term battle, the Obama Administration is doing their best to highlight the legislative achievements that the Dems have won over the past two years.

Today, Vice President Biden put outs a report that illustrates the progress that the American Recovery and Reinvestment Act of 2009 (aka ARRA, Recovery Act and the stimulus package/biIl) has made over this past year.

Since there is still so much confusion around the effectiveness of the Recovery Act, I decided to use this space to summarize some of the key improvements and impacts of the stimulus bill, with the help of The Washington Post, and the Center on Budget and Policy Priorities (CBPP):

  • Vice President Biden's report has noted that the Administration had spent 70% of the act's original $787 billion, it has been diligent in getting the funding into the hands of those who are creating jobs.

  • Even with efficient spending, stimulus grants and contracts have been relatively free of the fraud charges that routinely plague governement programs. Only two percent of awards under the program have received complaints.

  • Although the Gross Domestic Product (GDP) is a crude measure of the economic wellbeing of people, it is still one of the most popular wealth indicators used all over the world (Here is some more info). According to CBPP, our GDP would have been lower without the Recovery Act:

ARRA vs no-ARRA: GDP

  • According to the Congressional Budget Office and the Council of Economic Advisors, ARRA has created/saved approximately 2 million jobs over this past year.

  • CBPP has also calculated that without the Recovery Act, the unemployment rate would be much higher than the 9.6% we are seeing right now:

ARRA vs no-ARRA: Unemployment Rate

Furthermore, and this is usually the provision that has been ignored, the Recovery Act has provided funding for the TANF Emergency Fund, which is a program that has helped 37 states provide 250,000 subsidized jobs for unemployed parents and youth to weather the economic recession. Unfortunately, with a Senate unwilling to reauthorize the program, the funding ended yesterday (September 30) and many of these jobs will be terminated due to this ill-informed inaction.

It is true, the Recovery Act did not "solve" the economic crisis, and bring our economy back to pre-crisis levels. However, without it, our economic situation would be a lot worse than it is now. If anything, these highlights illustrate that more stimulus would probably lead to a more robust economic recovery.

People should also keep in mind that ARRA was passed last year without much Republican support in the Senate, and without any Republican support in the House.

So should we really be handing the keys of Congress back to the GOP, who have been strongly opposing the stimulus since the very beginning?

Senate Committee Holds Hearing on Africa

July 26, 2010 ·

Many African nations are approaching their 50th anniversary of independence this year, but have they achieved independence worth celebrating? The U.S. Senate Committee on Foreign Relations hearing on Africa exemplified a troubling trend among the world’s leading economic powers, characterizing relations with African nations in vividly imperialist terms. Sen. Johnny Isakson (R-GA) emphasized twice during the hearing that “Africa is the continent for America in the 21st century.” The troubling truth is that U.S. economic and military imperialism is accelerating, as the scramble to dominate African resources takes on a new dimension and direct competition with China intensifies.

The purpose of the Senate hearing was to review the nomination of eight new U.S. ambassadors to African posts, but the discussion remained focused on African economic trends, overshadowing important issues of human rights atrocities, political instability, and development initiatives in the countries in question: Burkina Faso, the Democratic Republic of the Congo, the Republic of the Congo, Zambia, Côte d’Ivoire, Sierra Leone, the Central African Republic, Gabon and Sao Tomé and Principe.  Sen. Russ Feingold (D-WI) and Isakson opened the hearing by optimistically depicting Africa’s economic potential, lauding its recent meager GDP growth of 4.9 percent, and encouraging the ambassadors to cultivate more bilateral trade relations. Each nominee in turn tipped his hat (yes, all were men) to this economic opportunism, pledging to support the interests of his respective African state “second only to American citizens and interests.”

Repeated promises of U.S. resources were also made to train and equip indigenous African security forces. Although only Thomas Dougherty, "Ambassador to be" of Burkina Faso, specifically referred to AFRICOM, the nominees’ repeated pledges for enhanced security almost certainly mean a renewed commitment to the ill-conceived command. The support for AFRICOM disregards serious concerns about the command’s methods and mandate. For example, the notion that increased military presence is what Africa needs to create security overlooks the root causes of conflict — poverty, disease, marginalization of certain groups — and the serious need for stronger civilian oversight and independent legal institutions. AFRICOM is known to train and equip numerous abusive regimes with grave human rights violations, such as the Gabonese military that killed several dozen people in Port-Gentil following the election results in September of 2009.

The bipolar Cold War mentality of the Senate Foreign Relations Committee was made most overtly apparent, however, in the sole question posed by the committee to each nominee. The question of utmost importance seemed to be, “Is China present in a growing capacity?” (Translation: "Should the U.S. feel threatened?")

Adding a moral dimension to the competition for resources, Isakson vilified the nation, warning, “China will use its friends and funds for, I think, more self-centered purposes.” It is a sorry joke to pretend that all U.S. activity on the continent is for legitimate, benevolent purposes.  In 2000, 71.6 percent of bilateral aid commitments to the continent required that goods and services needed for development be purchased from US companies. Economic colonization of Africa is alive and well, and the U.S. is as much a perpetrator as China.

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