This week, Apple CEO Tim Cook was questioned in a Congressional Hearing about his company’s complex scheme to avoid paying taxes.  According to Mr. Cook, the company’s stash of billions of dollars in overseas shell corporations was not tax dodging – it was ingenuity.  And, just in case anyone actually fell for the tech company’s creative explanation, Mark Gongloff of the Huffington Post shared an incredible chart, which illustrates exactly how unjust our nation’s tax system has really become.

The chart was produced by the Senate Permanent Subcommittee on Investigations, and it shows how the sources of federal revenue have changed over several decades.  In 1950, corporations contributed over 30 percent to our nation’s revenue, and individual income and payroll taxes made up about 45 percent.  But today, corporations only contribute 17 percent, and individuals are paying for over 60 percent of federal revenue.

So, despite all the Republican claims about the U.S. having the world’s highest tax rate – corporations are contributing less to our nation than ever before.  Yet, corporate executives like Tim Cook have the audacity to say we should be celebrating their “ingenuity.”  These companies make the huge profits they have been raking in by using the commons that our tax dollars develop and maintain.

Without roads and bridges, communications systems and utilities, corporations couldn’t get their products into the hands of hard-working Americans.  They should be paying for the privilege to do business here.  American tax payers should not be picking up a larger share of the tab, while corporate executives hold on to an ever-increasing share of the profits.  Let’s tell companies like Apple that we’ll celebrate their ingenuity just as soon as they start paying their fair share.

Originally published at ThomHartmann.Com.

On Tuesday, a “sinkhole” suddenly sank in Washington D.C. three blocks from the White House. Not a metaphor, but a massive hole in the road as “long as a Ford Explorer,” double the width of a train car and 17 feet deep. The asphalt eroded around a metal plate covering potholes in the street and collapsed over a sewer line that was laid in 1897. The sinkhole will take at least five days to “repair.”

There is an idiocy about our current national politics that is simply stupefying. We are sitting idly, watching, and suffering, as our nation disintegrates into a run-down backwater. Our airports are a global disgrace. Our railroads, broadband, energy grid are all outmoded by international standards. A bridge falls every other day. Our sewage systems are overwhelmed by normal use, and collapse in the extreme weather that has become the national norm. Sinkholes now are becoming a life-threatening peril.

At the same time, over 20 million people are in need of full-time work. The construction industry has still not recovered from the housing collapse. The federal government can borrow money at interest rates near zero. Yet instead of grabbing this opportunity to rebuild the country, Washington is focused on cutting budgets, an austerity that clearly costs jobs and impedes the recovery.

Any business leader with a wit of sense would say this is the perfect time to borrow money to rebuild the country, making investments now that will make us more competitive in the future. That’s why the head of the Business Roundtable, former Republican governor John Engler, says it. At the top of his wish list for the economy is borrowing money to invest in roads and infrastructure. The resulting growth will more than repay the virtually free money. We’ll end up with a more competitive economy, a healthier and modern infrastructure that will make lives easier and safer, more jobs, more income, more taxes and less debt.

This is literally a no-brainer. Yet when president proposes even a modest infrastructure bill, the Republican Congress rules it dead on arrival.

If desired, Congress could even get the investment done without adding to the debt. The Federal Reserve purchases $40 billion of mortgage-backed securities every month. Yes, every month. (It also purchases another $45 billion of Treasury bonds). This is designed to keep interest rates low – and is part of the multi-trillion dollar rescue of the big banks, helping them slowly shed the garbage in their basements.

This program – known as “quantitative easing” to befuddle observers – helps to sustain the recovery, despite the counterproductive budget austerity. But flooding the banks with money is a very inefficient way to create jobs and growth. Banks can sit on the dough, or worse, speculate across the world, gambling with what is literally the “house’s money.” Cheap money is more likely to spur mergers and acquisitions rather than new jobs.

A functional Congress would create a national infrastructure bank, designed to make vital investments in rebuilding the country. It could issue bonds that the Federal Reserve would purchase with interest rates near zero. If the Fed spend $20 billion on infrastructure bonds, it would help insure against blowing up the next bubble, while actually putting people to work doing work that has to be done.

Wall Street, of course, objects to this heretical notion. If the Fed is going to print money, then the big banks make certain they are at the door with their hands out. But there is no reason for Congress not to act – other than the bitter truth, as New York Sen. Richard Durbin famously exclaimed, that the big banks “own the place.”

“Internal improvements” used to have conservative support. Alexander Hamilton championed them. So did the Whigs under Henry Clay. Republican Abe Lincoln built the transcontinental railroads and the land grant colleges; Eisenhower the interstate highways. A lot of money was wasted. A lot of insiders got rich. But the country benefited from creating a modern, increasingly efficient infrastructure.

Now the need is pressing; the money is cheap – or free. The work is needed. It is simply idiotic that the Congress refuses to act.

We know Republicans scorn aid to the poor. Food stamps, infant nutrition, preschool, they argue, offer not a safety net, but in Rep. Paul Ryan’s words, a “hammock.” The Tea Partiers seem intent on sacking sensible regulation of the air, water, public health and worker safety.

But repairing roads and rail, building modern airports, keeping our broadband and energy grid at world class standards, making sure the sewers don’t leak, strengthening the sinews for the extreme weather that is upon us – this isn’t an ideological question. It is just common sense.

That this isn’t getting done now reveals exactly how extreme, how corrupt, and how destructive our current politics are.

The upcoming Trans-Pacific Partnership (TPP) agreement is using a process that is rigged from the start. It is not being negotiated by governments for the benefit of their people, it is being negotiated by executives (or future executives/lobbyists currently in government) largely for the benefit of the giant corporations they serve. The process has these giant corporations “in the loop” but groups citizens, working people, consumers, the environment, human rights groups and especially democracy are not part of the process. That can only go one way: if you don’t have a seat at the table you are on the table — the meal.

Chile’s TPP Negotiator Quits, Warns Citizens

Rodrigo Contreras, Chile’s lead TPP negotiator recently up and quit to warn people of the dangers this agreement poses to everyone except the giant multinational corporations. In The New Chessboard, (English translation) Contreras warns that the TPP is solidifying multinational corporate control over the Internet, copyrights, patents (especially drug patents), and in particular warns that the giant financial interests are solidifying their current control over the regulatory process. He writes that this will block countries that are trying to “restore the space for applying financial safeguards. In these circumstances it does not makes sense to further liberalize capital flows, depriving us of legitimate tools to safeguard financial stability.”

In particular Contreras warns that smaller countries face a threat from this agreement’s solidifying of the con trol of the giant multinationals, concluding,

It is critical to reject the imposition of a model designed according to realities of high-income countries, which are very different from the other participating countries.Otherwise, this agreement will become a threat for our countries: it will restrict our developmentoptions in health and education, in biological and cultural diversity, and in the design of public policiesand the transformation of our economies. It will also generate pressures from increasingly active socialmovements, who are not willing to grant a pass to governments that accept an outcome of the TPPnegotiations that limits possibilities to increase the prosperity and well-being of our countries.

Yves Smith at Naked Capitalism, in Chile’s Recent Lead Negotiator on Trans-Pacific Partnership Warns It Could Be a “Threat to Our Countries”, gives us a look at the context of what it means for a country’s TPP negotiator to quit and sound the alarms. She writes that this is “a statement of principle that comes at considerable personal cost” and that “his call to Latin American negotiators has deep-sixed his chances of getting another senior government role or being retained by large companies as a lobbyist or advisor.”

A job as a lobbyist or advisor to the multinationals is the golden goose that drives the negotiators. The last US negotiator, Ron Kirk, recently left that post to join the law firm Gibson Dunn where he will advise giant multinationals, probably for free. (Just kidding, he isn’t doing it for free.) The Financial Times notes that “Other former US trade representatives, including Charlene Barshefsky and Mickey Cantor under President Bill Clinton, also joined law firms after their tenures in government.” They probably also are not advising giant multinationals for free, either.,

Smith at Naked Capitalism notes that, “Some of Asian participants in the negotiations (particularly Japan) are also believed to have serious reservations about the provisions of the TPP that would weaken national sovereignity by allowing corporations to challenge laws and regulations as violations of the TPP.”

Americans are also reacting to the threat that the TPP poses to national sovereignty — government’s ability to control the wealth and power of the giant multinationals. Bloomberg News yesterday, in Wall Street Seeks Dodd-Frank Changes Through Trade Talks warns that, “U.S. bankers and insurers are trying to use trade deals, which can trump existing legislation, to weaken parts of the Dodd-Frank Act designed to prevent a repeat of the 2008 financial crisis.”

The Bloomberg report gets into some specific problems that watchdog groups see. For example, “The trade talks could easily become a Trojan Horse,” said Marcus Stanley, the policy director for Americans for Financial Reform, a group that includes labor unions, civil rights organizations and consumer advocates.

Trade agreements, once signed, override national sovereignty and limit a country’s ability to regulate giant corporations. The Bloomberg report noted that the financial industry is already trying to use existing trade agreements to roll back regulations required by the 3-year-old Dodd-Frank law,

The financial services industry has already invoked international trade rules in its bid to weaken proposed regulations, notably the Volcker rule that would ban proprietary trading. Named after former Federal Reserve chairman Paul Volcker, the rule is a signature part of Dodd-Frank.
The U.S. Chamber of Commerce sought a review of the rule by U.S. trade authorities, arguing it violated existing agreements.

So the financial industry is trying to use the upcoming TPP to overturn portions of Dodd-Frank and other rules in other countries they see as restricting their power.

Senator Elizabeth Warren spoke of this at a recent Senate hearing:

Fix The Process

The process that we use to negotiate our “trade” agreements needs to be changed to relect that this country is supposed to be run by We, the People. The current secrecy must give way to an open, transparent participative process that serves citizens, workers, the environment, consumers, human rights and other considerations of all the stakeholders.

The way the process is currently set up, the giant multinationals have a seat at the table, and they are salivating as they await the main course. We the People and our silly laws and regulations that are in the way of the profits of the 1% are being prepared to be served up. And a fine meal we will be.

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Yes, they’re already on it:

On top of the troubles the administration is facing over its handling of the attack on the Benghazi mission, the Internal Revenue Service’s targeting of conservative groups, and the Justice Department’s seizure of Associated Press phone records, Republicans hope to target Health and Human Services Secretary Kathleen Sebelius.

They are questioning her soliciting of funds on behalf of a non-profit group, called Enroll America, from two private entities, a practice which if not unprecedented is at the very least unusual. Federal law bars officials from soliciting any organization or individual with whom they do business or regulate.

Enroll America is run by the president’s former campaign backers to do something Congress refused to fund: sell “Obamacare” to the public.

An HHS statement last week said that since March Sebelius solicited financial donations for Enroll America from H&R Block Inc, the tax preparation company, and the Robert Wood Johnson Foundation, a philanthropic entity devoted to public health issues. Asked Monday for a list of all solicitations before or after March, an HHS spokesman referred Reuters to the department’s original statement.

Neither H&R Block nor the Robert Wood Johnson Foundation are regulated by HHS, the department’s spokesman said, so there was nothing improper or illegal about soliciting them.
[...]

The Enroll America issue is complicated by the fact that Republicans in Congress have succeeded in blocking proposed government spending that otherwise could have been used to achieve the ends pursued by the independent group.

That has given lawmakers, such as Republican U.S. Senator Lamar Alexander, an opening to allege a violation of the federal “anti-deficiency” act, which bars agencies from accepting “voluntary” services except when authorized by law.

In defense of the help the department is getting from Enroll America, an HHS spokesman said it is permitted by a section of the Public Health Service Act that allows the secretary to encourage support for new and innovative health programs.

Some conservative legal experts say finding a clear-cut violation of the law is a long shot. “I would be skeptical of the claim that it’s illegal, unless someone made a really compelling case. However, the appearance is such that it at least raises questions,” said Jonathan Adler, a law professor at Case Western University who opposes healthcare reform.

But legal issues may be the least of the concerns for supporters of the healthcare law.

They worry that a political storm over Obamacare, with congressional hearings likely, could discourage private donors to Enroll America and jeopardize the administration’s ability to find the funds needed to reach a public that is already largely unaware of the healthcare reforms.

I wrote about this building pseudo-scandal the other day, and it appears it’s gaining steam. I noticed that on Fox yesterday it came up several times as “yet another case of the Obama administration shaking down private industry.” When I first read about it, the suggestion was that Sebelius was appealing to insurance companies rather than trying to find corporate sponsors for the purpose of educating the public about Obamacare, which is slightly different, but still not particularly scandalous.

After all, if the congress would agree to fund the outreach as any sane government would do for a big new government program, this wouldn’t be necessary.  But naturally, they are trying to make it fail so they don’t want the public to be informed of what the new benefits are and what they need to do to get enrolled in insurance and obtain the subsidies.

But this administration rationale doesn’t make sense to me to be honest:

“The danger” to the health program, said former Obama healthcare adviser Nancy-Ann DeParle, “is that people don’t come and enroll and get insured. That leaves the health plans in the exchanges trying to cover people without any young, healthy people, and it drives the price up.”

I think we can probably count on the insurance companies to handle that, don’t you? After all, these young healthy people who are mandated to buy insurance are the new money machine for the insurance companies. The reason they agreed to offer coverage for pre-existing conditions and preventive care was so they could get all these young healthy people paying for their product. I have a feeling they’ll be more than willing to “reach-out” to this population and help them navigate the new system.

As for using an outside group, sponsored by the private sector, to help educate the public about the new IRS rule well, Houston, we’ve got a problem, and it’s not the one the Republicans cite in that article. (Indeed, one would have thought the GOP would be thrilled to have the private sector step up instead of Big Gummint, right?)

No, the article talks about Sebelius going to H&R Block and there’s a reason for that — somebody has to educate millions of people about how these subsidies are going to work. If it can’t be the government, then logically you’d think that the tax preparation industry might want to step up and do it. It’s advertising for their services, after all. Unfortunately the IRS “Tea party” hysteria is flowing directly into this one with the right wing already screeching incoherently about how the IRS is going to kill conservatives in their sleep by denying them access to health care or some such nonsense. I’m going to guess that these companies are not going to be too anxious to step into that quick sand unless there’s a huge financial incentive to do so — and I don’t think there is.

So Sebelius is in a tough position with this one. However, I would bet anything that there will be plenty of information available via this here internet to guide most people through. Certainly the government web-sites and offices will be able to provide information. I’m just not sure that it’s entirely necessary to have a huge TV/radio/newspaper campaign. Yes, it would be nice for the administration to be able to tout all the improvements in the system and make it as easy as possible. But I don’t think the lack of that will actually inhibit people from finding out what they need to find out. Between the insurance companies, the internet and the usual tax forms, I’d guess we’ll muddle by.

I sure hope so because from the looks of things the Republicans are going to have a field day shutting down this Sebelius plan and keeping the IRS on its heels. Implementation was never going to be easy, but they’re going to do everything they have at making sure it’s as difficult as possible. (And they call themselves patriots…)

As for whether the administration gets credit for the health care improvements in the public’s mind — well, if it all works out, the smartest thing they ever did was stop resisting the term “Obamacare.” That will last a very long time.

If it doesn’t they were screwed anyway, so no harm no foul.

For over a week, Republicans have refused to focus on anything but so-called scandal.  And, it turns out, that’s exactly the way they want it.  On Thursday, the Heritage Foundation, a prominent conservative think tank, sent a letter to GOP leaders, and told them to avoid working on any legislation that could take the focus off of the Obama Administration.

Michael Needham, the CEO of Heritage Action for America, wrote, “Legislation such as the Internet sales tax, or the FARRM Act, which contains nearly $800 billion in food stamp spending, would give the press a reason to shift their attention away from the failures of the Obama administration to write another ‘circular firing squad’ article.”  In other words, they want Republicans to use the media’s scandal obsession to keep the focus off of in-fighting within the Party, and to avoid getting any real work done.

It’s also important to note that Heritage Action is a registered 501(c)(4) organization.  That means you and me are subsidizing the very organization that’s telling our lawmakers not to do their job.  As if Republicans in Congress ever needed an excuse to do nothing.  The fact is, while the GOP obsesses about so-called scandal, the pressing issues facing our nation are being ignored.

Instead of trying to score political points, Republicans could be working to help our economy, create jobs, or to fix our broken immigration system.  They were not elected to do the bidding of conservative think tanks.  It’s time to listen to the American people, put aside political witch-hunts, and start working on the issues that people actually care about.

Originally posted at ThomHartmann.Com.

The “Apple hearing” is underway (Go Sen. Levin!!) with Apple CEO Tim Cook explaining why Apple “can’t” bring back over $100 billion they have parked outside the country because they would have to pay the taxes they owe.

Senator after senator is explaining that our tax rate is not “competitive.” Not sure what this really means, but I guess it sounded good when it as tested in focus groups… But several years ago we lowered corporate tax rates to be “competitive” and what happened was other countries lowered their tax rates to be “competitive” and now governments around the world are defunded… If we lower corporate tax rates even more other countries will be pushed by their corporations to follow, and governments around the world will be even smaller in relation to the giant corporations. And the vast gap between the wealthiest few and the rest of us will grow even wider.

Here are two simple suggestions:

1) Just repeal “deferral” right now — meaning stop letting companies off from paying their taxes just because they hold the profits out of the country. This changes “can’t” to “have to” when they say they “can’t” bring the money back. The would be saying “We have to pay our taxes so we might as well bring the profits back.” This would bring $1.7 trillion that should be in the country back to the country and hundreds of billions of dollars that is already owed (but “deferred”) to fund our government right now.

2) Some have suggested that in the future we allocate a company’s taxes based on their sales. If 25% of their sales are in the US, then 25% of their total revenue is taxed by the US.

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This report by the Kaiser Family Foundation about elder poverty is shocking. I don’t think people realize just how many millions of people are barely subsisting in their old age, but it’s many more than the government likes to admit to. Just as with the Chained-CPI, we’re dealing with how they are accounted for rather than the actual numbers these people are forced to live on.

Dylan Matthews explains why elder poverty is so much worse than we realize:

While the SPM takes transfer payments into account, it does the same with out-of-pocket medical costs. If you’re an unmarried senior with no dependents, make $15,000 a year, and spend $10,000 of it on medical care, under the official poverty measure you’d most likely not count as poor, as $15,000 is above the 2012 poverty threshold for a single senior ($11,011).

But under the SPM, you’d count as poor as $15,000 – $10,000 = $5,000, which is below the relevant SPM threshold. And despite having Medicare, many seniors struggle with out-of-pocket medical bills. As my colleague Michelle Singletary pointed out over the weekend, the Employee Benefit Research Institute has found Medicare only pays for about 60 percent of seniors’ total health costs. Sarah has written about how out-of-pocket costs tend to pile up particularly at the end of seniors’ lives.

Can you believe that we’re actually talking about whether or not $15,000 counts as poverty in America in the first place? And then it turns out they aren’t counting what these old people have to lay in medicare costs! That’s just mind-boggling.

In any case, the article is very interesting and shows that some of the places with the highest elderly poverty are in places like California where 20% of SS recipients are in poverty.

And yet, the president and members of both parties have been talking about cutting benefits. Unbelievable.

As always when I read about the necessity of a guaranteed old age pension that keeps people living in dignified circumstances after they are too old to work, I’m reminded of this great article by Arthur Delaney and Ryan Grim from a few years ago:

An employee of Associated Charities, a private organization dedicated to alleviating poverty in the District of Columbia, met an old black woman carrying a basket of cinders near the dump in Southeast D.C. on a bitterly cold day in December 1896.

The woman “could not give street and number, but could ‘fotch’ the agent to her place,” according to a case study labeled “Aunt Winnie” in one of the organization’s annual reports from near the turn of the century. “Old age, with a heavy load on top and a strong wind blowing, made the walk a trying one. At last the 8×10 cabin was reached. In it was a stove in many pieces held together with wire, a bedstead with rags for mattress and rags for covering. From the leaky roof the floor was wet through and through.”

Aunt Winnie, the report said, had no income save the 50 cents she made every two weeks for taking in wash. In summertime she raised herbs and greens, but in winter she “suffered for food and fuel.” Her children had all been sold away to slavery, and a nearby niece was too poor to offer any support. Her neighbors helped, providing money for the stove and cot, and a “colored friendly visitor was found to carry broth and other comforts to her.” The neighborly charity wasn’t enough to persuade the agent, who was essentially a private sector version of a social worker, that the old woman should be on her own.

“In the fall of ’98 agent asked her to go into the almshouse, but she would not consent. During the storm in February ’99, she was kept from perishing with a great effort. Every visit, and they were many, had to be made through snow up to the waist. It was during these visits that the promise was made that before another winter she would take refuge in an almshouse.”

When the weather warmed, Aunt Winnie backed off her promise to go to the almshouse. The social worker started to play hardball.

“It would be hard to say which, the agent or the applicant, suffered the more, because through all this distress had sprung up a loving confidence and perfect trust that seemed cruel to deceive. Attention and assistance were withdrawn gradually.”

It worked: In July, Aunt Winnie relented and said she’d go to the almshouse as soon she could sell her cabin. Nobody would buy it, so the social worker told her to tear it down and sell it for kindling. At 2 p.m. on Aug. 23, 1899, the social worker showed up in a wagon.

“[S]he was sitting on her trunk, without a stick of the cabin to be seen. Without a murmur she dropped a courtsey to the bare spot where once stood the cabin and turned away. After an affectionate separation in the almshouse the agent came away feeling that for such a balmy day in August it was a trying task to perform, but for winter’s blizzards, a blessed relief. In case of her death a promise has been made to her that the general secretary of the Associated Charities will keep her body from potter’s field.”

Aunt Winnie, whose story is preserved in the archives of the Historical Society of Washington, had been sent to an American institution that was by then some 300 years old and went by a variety of names: the county farm, the poor farm, the almshouse or, most often, simply the poorhouse. She would probably have been surprised to learn that more than a hundred years later, after the virtual eradication of elderly poverty, a powerful political movement would materialize with the mission of returning to the hands-off social policies that made the poorhouse the nation’s only refuge for the jobless, the aged, the infirm and the disabled.

Did you know that Washington, DC is the 9th most expensive American city to live in? Did you also know that thousands of private sector workers whose jobs are supported by taxpayer dollars don’t earn enough to live in the city where they work? Tomorrow, those workers are rallying for livable wages, in America’s 9th most expensive city. You can join them at noon, tomorrow, at Columbus Circle, in front of Union Station, in Washington, DC.

For anyone who lives and/or works here, it’s not exact news that the metro-Washington area is an expensive place to live. It’s no accident that some of the wealthiest zip codes in the country are right here. It takes quite money to just to maintain a modest in the metro-Washington area. Even just “getting by” doesn’t come cheap here. (Even living outside of the district and commuting in to work, I can attest, doesn’t make things less expensive. The farther out you live, the longer and more expensive your commute.)

According to folks at the Council for Community and Economic Research, the Washington area traditionally managed to just miss being in the top ten high-cost urban area. For the third year in a row, the Council’s cost-of-living index, places the Washington area in the top ten most expensive places to live.

The areas ranked as the most expensive places to live included most of the usual suspects, with New York’s Manhattan and Brooklyn boroughs taking the top two slots on the list. But for the third year in a row, Washington snagged a spot in the top 10, driven by the region’s high-priced housing market and relative immunity from the economic downturn.

“Since the beginning of the Great Recession, Washington has catapulted itself into the top 10 based on the housing market,” said Dean Frutiger, project manager for the Cost of Living Index at the council. Washington – which took ninth place in the first quarter- traditionally remained just shy of the top 10 high-cost urban areas, often swapping places with Boston, Frutiger said.

On average, the Washington area is 41.7 percent more expensive compared with the national average. Housing here is more than twice as expensive as in the rest of the country. Groceries are 12.8 percent more expensive, while health care is 1.6 percent more expensive.The region’s cost of living dropped slightly from the same time last year but is higher than 2011.

Washington’s high-priced housing market may have put the Washington in the top ten, but the index is compiled based on the cost of basic essentials – like housing, utilities, transportation, groceries, and health care – that many workers employed by private companies that contract with the federal government can’t afford on what they’re paid.

We find that nearly two million private sector employees working on behalf of America earn wages too low to support a family, making $12 or less per hour. This is more than the number of low-wage workers at Walmart and McDonalds combined.1 Yet, if anything, this figure underestimates the total number of poorly-paid workers funded by our tax dollars. Our analysis encompasses U.S. workers employed by government contractors, paid by federal health care spending, supported by Small Business Administration loans, working on federal construction grants, and maintaining buildings leased by the federal government. This encompasses the largest share of poorly-paid workers funded by our taxes. However, other streams of funding have yet to be analyzed. For example, loans and subsidies from the Department of Agriculture fund giant agribusinesses that employ more than a million farm workers, while grants from the Department of Education fund low-wage assistant teachers, bus monitors and cooks in Head Start and other programs. Due to lack of data, retail and food service workers for concessionaires of the National Parks Service and other federal agencies also fall outside our analysis.

These are employees working on behalf of America, doing jobs that we have decided are worthy of public funding-yet they’re being treated in a very un-American way. Our nation has a history of ensuring our tax dollars provide decent jobs. From the 1931 Davis-Bacon Act to Executive Order 11246 of 1965, and a host of other laws and executive actions, our laws have mandated that companies working on behalf of the American people are upholding high standards of employment practices. Yet as the nature and prevalence of federal contracting, lending and grant-making have changed, and some laws have been weakened, working people have fallen through the cracks.

When our tax dollars underwrite bad jobs, the economy as a whole is weakened and all of us are negatively affected. There is a ripple effect as low-paid workers and their families have little money to spend, hindering economic growth that could be creating more jobs. Poorly-paid workers also contribute less in taxes and are more likely to rely on public benefits to care for their families. In contrast, we would all benefit from an economy where workers earn good wages-and we have a special responsibility to see that the people working on behalf of our nation are paid and treated fairly. Raising standards for people working on behalf of America is one important piece to providing opportunities for workers to reach the middle class.

Behind those numbers are real people, hard-working people, who just want to earn a wage that helps them afford the essentials that don’t come cheap in the Washington area.

• Lucilia Ramirez, who has cleaned Union Station for 21 years spoke of making $8.75 an hour, with no benefits. Struggling to pay their mortgage on her small salary, Ramirez and her husband were forced to rent out bedrooms to strangers just to keep a roof over their heads.
• Katina Washington, who earns $9.65 an hour cleaning offices rented by the Department of Justice, lives with her cousin because she can’t afford her own apartment, and has to rely on food stamps to help with groceries.
• Nelly Garcia, 55, works at the Old Post Office Building, for a company that makes lots of money from federal contracts. But Garcia only earns $9.00 an hour, which isn’t enough to afford food or pay for the subway commute to work. A cancer survivor, Garcia has no health benefits, and must rely on Medicaid as a result.

According to the MIT Living Wage Calculator, a single adult needs to earn about $28,425 a year to afford the cost of basic necessities like housing, utilities, transportation, groceries, and health care. That requires an hourly wage of at least $13.67 an hour. For a single adult and a child, the annual costs are $54,805 – nearly double the cost-of-living for a single adult – and would require an hourly wage of at least $26.35.

Most private sector employees of federal contracts earn far less than a livable wage in an area as expensive as Washington. Yet everything one needs to live in Washington, from housing to groceries to transportation, is still more expensive than most other places, because Washington is area where lots of people can pay more.

Paying more for food, housing, etc., isn’t a hardship if your the CEO of a company with a federal contract. After all, federal benchmark compensation for CEO Reimbursement for work on a federal contract is over $760,000.00, but the lowest compensation reported by workers on federal contracts is $6.50 an hour. You can earn over $760,000 on a federal contract, while not paying your employees enough to live on. How’s that for inequality? And it’s all supported with your tax dollars and mine.

I don’t know about you, but I’d rather Nelly Garcia be able to buy groceries and have benefits than have my tax dollars help a federal contractor CEO redo his Rosslyn, VA penthouse again. If you feel the same way, then stand with these workers tomorrow, and join them in demanding a livable wage. Because nobody can live in Washington on minimum wage. Not in the 9th most expensive city in America.

For weeks, I’ve been writing that the movement to increase the minimum wage near you. Next week, however, that movement will arrive in my own back yard. Low-wage workers organized by Good Jobs Nation are coming to Washington, DC to rally for living wages, on Tuesday, May 21st, at 12:00pm, at Columbus Circle, in front of Union Station.

But this protest isn’t targeting fast food restaurants like McDonald’s or Burger King or retail shops like TJMaxx. On Tuesday, low-wage workers will take their demands to the biggest low-wage job creator in the country — the one funded by taxpayers like you and me: the federal government.

Early this month, a study by Demos, “Underwriting Bad Jobs: How Our Tax Dollars Are Funding Low-Wage Work and Fueling Inequality,” revealed that the federal government revealed that millions of low wage workers employed by private businesses, who serve the federal government in a variety of ways, can’t afford basic necessities like health care, food and housing, because they’re paid such low wages.

We find that nearly two million private sector employees working on behalf of America earn wages too low to support a family, making $12 or less per hour. This is more than the number of low-wage workers at Walmart and McDonalds combined.1 Yet, if anything, this figure underestimates the total number of poorly-paid workers funded by our tax dollars. Our analysis encompasses U.S. workers employed by government contractors, paid by federal health care spending, supported by Small Business Administration loans, working on federal construction grants, and maintaining buildings leased by the federal government. This encompasses the largest share of poorly-paid workers funded by our taxes. However, other streams of funding have yet to be analyzed. For example, loans and subsidies from the Department of Agriculture fund giant agribusinesses that employ more than a million farm workers, while grants from the Department of Education fund low-wage assistant teachers, bus monitors and cooks in Head Start and other programs. Due to lack of data, retail and food service workers for concessionaires of the National Parks Service and other federal agencies also fall outside our analysis.

These are employees working on behalf of America, doing jobs that we have decided are worthy of public funding—yet they’re being treated in a very un-American way. Our nation has a history of ensuring our tax dollars provide decent jobs. From the 1931 Davis-Bacon Act to Executive Order 11246 of 1965, and a host of other laws and executive actions, our laws have mandated that companies working on behalf of the American people are upholding high standards of employment practices. Yet as the nature and prevalence of federal contracting, lending and grant-making have changed, and some laws have been weakened, working people have fallen through the cracks.

When our tax dollars underwrite bad jobs, the economy as a whole is weakened and all of us are negatively affected. There is a ripple effect as low-paid workers and their families have little money to spend, hindering economic growth that could be creating more jobs. Poorly-paid workers also contribute less in taxes and are more likely to rely on public benefits to care for their families. In contrast, we would all benefit from an economy where workers earn good wages—and we have a special responsibility to see that the people working on behalf of our nation are paid and treated fairly. Raising standards for people working on behalf of America is one important piece to providing opportunities for workers to reach the middle class.

At a press conference announcing the launch of Good Jobs Nation earlier this month, workers bore witness to the “ripple effect” federally-funded low-wage jobs.

• Lucilia Ramirez, who has cleaned Union Station for 21 years spoke of making $8.75 an hour, with no benefits. Struggling to pay their mortgage on her small salary, Ramirez and her husband were forced to rent out bedrooms to strangers just to keep a roof over their heads.
• Katina Washington, who earns $9.65 an hour cleaning offices rented by the Department of Justice, lives with her cousin because she can’t afford her own apartment, and has to rely on food stamps to help with groceries.
• Nelly Garcia, 55, works at the Old Post Office Building, for a company that makes lots of money from federal contracts. But Garcia only earns $9.00 an hour, which isn’t enough to afford food or pay for the subway commute to work. A cancer survivor, Garcia has no health benefits, and must rely on Medicaid as a result.

These are just a few of the voices of the over 4 million low-wage workers employed by private companies on behalf of the federal government. Many of them can’t afford basic essentials like food, shelter, and medical care. Some 30 percent of them actually make less than minimum wage. Forty percent must depend on food stamps, Medicaid, and other public assistance to survive. Sixty-five percent of them struggle to pay for things like rent, utilities, and food.

If, like me, you live and/or work in the Washington area, you probably walk past these workers every day. We smile, and say “Hello,” “Good morning,”  or “Good night.” We live and work in a place that is one of the biggest examples of economic inequality, in an “recovery” where most of the new jobs created are low-wage jobs. Seven of the ten wealthiest zip codes in the country are in the Washington, DC area, yet DC would have the third highest poverty rate in the country — if DC counted as a state. Federal benchmark compensation for CEO Reimbursement for work on a federal contract is about $760,000.00, but the lowest compensation reported by workers on federal contracts is $6.50 an hour.

Hundreds of billions of taxpayer dollars in federal contracts, loans, and leases go to corporations that pocket billions and pay their CEOs millions in bonuses, but pay such low wages that workers can’t afford food and shelter. Taxpayer dollars go to corporations that pay their employees so little that many of them have to rely on public assistance.

Like I said yesterday, when an employer pays workers so little that workers have to rely on public assistance, is should count as “corporate welfare.” Big, profitable contractors are forcing taxpayers to subsidize their unlivable wages. These companies are receiving funding from the federal government, but they are further burdening taxpayers by leaving their employees to rely on food stamps and other public assistance programs instead of paying them a living wage.

This has to stop. That’s why federally funded low-wage workers are joining together for a living wage and a voice on the job. The federal government has a responsibility to ensure taxpayer-funded contracts help the economy by paying workers enough to afford the basics like rent and food and to put money back into their local economies.

Next week, Washingtonians have a chance to stand with low wage workers, instead of just passing by them every day on our way to or from our homes, condos, and apartments in and around Washington, DC. More than ever, Americans need good jobs, with liveable wages, and real benefits. Maybe the place to start is right in our own back yards.

There was a time when a $200+ billion reduction in the federal budget deficit would have been big news and hailed as a singular achievement worthy of either fiscal sainthood or a dance-on-the-table party…or both.

Yet yesterday’s Congressional Budget Office report showing that the fiscal 2013 federal deficit will be $642 billion, $203 billion less than CBO’s previous estimate of $845 billion, did not create any spontaneous cannonizations or celebrations. It also didn’t change the still-stalemated and crisis-oriented federal budget debate by even a small amount.

The bottomline: It’s in almost no one’s interest to be happy about the budget news that should have made everyone happier.

Here’s why.

1. The $642 billion estimate is indeed an overwhelming reduction from the 2009 $1.4 deficit and a substantial change from CBO’s February projection. But it is also $642 billion more than no deficit at all. That means that all sides in the budget debate will still be able to use even this much lower number to “prove” whatever point they were making before the new estimate was released.

2. The White House couldn’t take a victory lap because anything it said would have been mischaracterized by congressional Republicans as the president supporting a $600+ billion deficit.

3. Even though they could take some credit for keeping the sequester in place and, therefore, lowering spending, the congressional Republican leadership couldn’t take a victory lap because that would have been taken by some tea partiers as an indication that the speaker and majority leader were not going to demand additional reductions.

4. There’s anything but universal agreement among economists that reducing the deficit in the current economic environment is the right fiscal policy and, therefore, that the reduction in the deficit is good news. Given the still-slow corporate and consumer spending, the continuing cutbacks by state and local governments and the continuing economic problems around the word that are limiting trade with the U.S., Americas austerity-like fiscal policy that has been in place for several years may well be the exact wrong plan at this time.

5. The year-by-year deficit is quickly being replaced by the national debt as the number one fiscal issue. This isn’t surprising: the deficit is falling while the debt is rising and the deficit is in billions while the debt is in trillions. The fact that CBO projects the debt will soon be in a range that most economists would call insignificant makes no difference when the multi-trillion dollar debt sounds so scary.

6. In the wake of the report, the deficit hawk groups are still saying that the deficit is as much of a problem as it was before and pushing for a grand bargain. This too isn’t a surprise. After all, these groups would have less reason for being and far less ability to raise funds if the deficit didn’t exist as an issue.

7. Although the CBO forecasts show the deficit falling from 2013 to 2015, it also shows it rising in nominal terms each year thereafter. Even though that is far less meaningful than the deficit as a percent of GDP, which stays in the low 3.5 percent range, it still allows everyone to cherry-pick the results that best “prove” what they want to say.

So…Do the new CBO numbers mean that there won’t be a fight this fall over the debt ceiling and a continuing resolution? Absolutely not.

Originally published at Capital Gains and Games.