President Obama has promised Oklahoma “everything that it needs right away” to begin the process of recovering and rebuilding, after the massive tornado touched down in the state on Monday, devastating the cities of Monroe and Newcastle. Already hundreds of Federal Emergency Management Association employees are the ground in Oklahoma, and millions of dollars in federal disaster relief will almost certainly follow. Oklahoma will recover.

But the debate in Washington is a reminder that we’re all threatened by a masssive, man-made disaster called sequestration, that could make the next natural disaster even worse.

Washington’s repsonse to the tornado in Oklahoma was twofold. President Obama expressed the nation’s sympathy and support for Oklahoman’s touched by the diaster and promised that the state would get “everything that it needs” to recover and rebuild. By Tuesday, more than 300 FEMA employees were on the ground in Olkahoma.

The winds had barely died down in Oklahoma when the hot air started flowing back in Washington. Even as rescuers began the delecate work picking throuh the rubble in search of survivors, Republicans in Congress were already talking cuts, and insisting that relief disaster relief for Oklahoma come at the cost of cuts elsewhere. And none other than Oklahoma Republican Sen. Tom Coburn kicked off the grousing.

But although political leaders of both parties expressed sympathy for the victims, it took only hours for Washington to face off over the possible cost of repairing the devastation and how it would be paid. For the moment, it was a strictly hypothetical debate, since the government already has $11.6 billion available in a disaster relief fund. But it underscored the fact that even national tragedy does not always bring the capital together.

An Oklahoma senator, Tom Coburn, a Republican who is one of the most relentless budget hawks in Congress, kicked off the touchy dispute by saying that any additional disaster relief appropriated by Congress would have to be paid for by cutting other areas of the federal budget.

Some Republicans rushed to his defense, with Senator Ron Johnson of Wisconsin saying Mr. Coburn’s actions demonstrated “real leadership.”

At least Coburn is consistent. Earlier this year, Coburn and several other Oklahoma Republicans opposed disaster relief for Hurricane Sandy victims, insisting that the aid be “paid for” with cuts in other areas of the federal budget.

But where can cuts be made that, in the context of the sequester’s massive across-the-board cuts to non-defense discretionary spending, won’t be equally disastrous?

As it stands now, the sequester has cut deeply enough into disaster relief and preparedness, to put the government’s ability to predict, prepare for, and respond to natural disasters and emergencies at risk.

Due to the sequester, FEMA will lose $1 billion from its budget this year alone. Disaster relief takes the biggest hit, with $560 million cut. Another $100 million is slashed from state and local grants. Smaller programs are not spared. Funding to help state and local communities prepare for disaster is cut by $3 million under sequestration, and another $1.9 million is cut from funding for transportation and infrastructure repair.

Meanwhile, FEMA will pay out $10.8 billion in relief to storm victims this year, leaving it with just $2.5 billion in relief funding for the rest of the year. The government has $11.6 billion in a disaster relief fund. So Oklahoma will get what it needs. But if more disasters tax available funds, Congress may have to vote on additional disaster relief. And in this Congress that means more Republican hostage-taking, and relief bills loaded with all kinds of amendments.

Meanwhile, FEMA may have to respond to sequester by making life and work harder or employees like the 300 or so now helping Oklahoma’s tornado victims. Reducing hiring, hiring freezes, and the elimination of comp. time and overtime could leave FEMA with an over-stretched, underpaid workforce responding in an increasing number of natural disasters.

Things aren’t much better on the preparation side of the equation. The National Oceanic and Atmospheric Administration, which runs the National Weather Service and other weather detection programs has been targeted for cuts. Just like the GOP has tried to gut FEMA ever since Hurricane Katrina, Republicans targeted the National Weather Service for  cuts after the 2010 elections. (Right after the agency played a crucial role in warning the West coast about the tsunami in Japan.) The sequester cuts the NOAA budget by 8.2 percent, including $266 million in cuts to crucial programs that fund the agencies satellite programs. 

Strapped for cash, the NOAA has implemented hiring freezes. As a result, the agencies vacancy rate has tripled in the past two years. There are now more than 200 unfilled positions, including nine major forecaster positions in major cities, and general forecaster vacancies across the country. As National Weather Service Employees Organization president David Sobein pointed out last month, vacancies put a strain on the agencies remaining employees, and could impact the quality of forecasting. 

Sobien gave the example of recent poor forecasting of the early March snowstorm predicted to hit Washington, D.C., as an example of what happens when forecasters are stretched thin. But that’s not the worst that can happen, he warned.

“People are going to be overworked, they’re going to be tired, they’re going to miss warnings. We’re going to miss a tornado warning or some other thing.”

That’s before the sequester’s impact. Sequestration further threatens the nation’s weather forecasting.

The Department of Commerce warned that not only will the loss of satellite data and imagery diminish the quality of forecasts, but so will other important weather data surrendered by spending cuts.

“Sequestration will also reduce the number of flight hours for NOAA aircraft, which serve important missions such as hurricane reconnaissance and coastal surveying,” said a DOC spokesperson. “NOAA will also need to curtail maintenance and operations of weather systems such as NEXRAD (the national radar network) and the Advanced Weather Interactive Processing System (used by local weather forecast offices to process and monitor weather data), which could lead to longer service outages or reduced data availability for forecasters.”

In addition to program spending cuts, NOAA faces the possibility of staff furloughs and unfilled positions. While not specifying the number of NWS cuts, the DOC states up to 2,600 NOAA employees will have to be furloughed, 2,700 positions left vacant, and 1,400 contractor positions reduced if the sequester materializes.

“NOAA will face the loss of highly trained technical staff and partners,” a DOC spokesperson said. “As a result, the government runs the risk of significantly increasing forecast error and, the government’s ability to warn Americans across the country about high impact weather events, such as hurricanes and tornadoes, will be compromised”.

The National Weather Service saved lives in Oklahoma this week, by issuing early warnings that gave people time to seek shelter before the tornado hit. The agency issued a tornado warning 16 minutes before the tornado touched down outside of Newcastle, and 19 minutes before it reached Monroe. That may not sound like enough time, but in these situations every minute counts, and any early warning increases the likelihood of getting to safety before a twister strikes. 

Advances in forecasting technology and tornado prediction could mean earlier warnings in the future. New, experimental methods could increase warning times from 15-30 minutes to as much as six hours before a tornado. But it won’t happen if agencies like the NOAA and NWS don’t have the money to maintain and upgrade their satellites and forecasting technology. The best technology available won’t make a difference if no one’s there to operate and monitor it, because the NOAA and NWS don’t have the money hire new forecasters, or even keep their remaining employees on the job. 

Tornado season is upon us, and that means we could see more than 1,000 tornados.   Most will touch down in the Midwest, but the area traditionally known as “Tornado Alley” no longer has a monopoly on tornados. 

Literally and figuratively, Tornado Alley now could be almost anywhere; the “alley” is more like a field that seems to spread by the year.

That funnel cloud in The Wizard of Oz (actually a 35-foot tapered stocking) was remote and exotic to audiences for much of the last century. But the Oklahoma disaster is a reminder that Tornado Alley is less a geographic description than a state of mind, as twisters seem to range farther afield and extreme weather in general turns up in unexpected places — a deadly tornado in western Massachusetts (June 2011), an earthquake in central Virginia (August 2011), storm surge on Wall Street (October 2012).

The number of recorded tornadoes has shot up over the years, but Tom Jeffrey, a hazard scientist with CoreLogic, a Santa Ana, Calif., analytics firm, says it’s not clear if that’s because there are more tornadoes or more people reporting them.

He gives several explanations for our increased concern about tornadoes and all kinds of very bad weather. Climate change seems to portend meteorological extremes; cable TV news and social media focus national attention; meteorologists are much better able to detect, track and measure tornadoes; and the population is larger and more dispersed — a fatter target.

Disasters happen. But the man-made disaster known as “the sequester” didn’t have to happen, and it doesn’t have continue. It’s possible that Congress will approve yet another “exception” to the sequester, for agencies like FEMA, the NOAA and NWS. But Congress can simply repeal the sequester.

We don’t have to sequester the next disaster, but every day that the sequester stands makes it more likely that we will. The only questions are: When and where will it happen? And who will suffer the consequences?

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.

At yesterday’s Senate hearing the CEO of Apple said they follow the law when they “defer” billions and billions of dollars in taxes they owe by keeping profits “out of the country.” He’s talking about the “Subpart F” corporate tax loophole that practically forces companies to move jobs and factories and profit centers out of the country. (“Double Irish” to those in the know. “Double Irish With A Dutch Sandwich” to those who know too much.) So let’s change that law and make these companies pay the taxes they already owe.

Tell CEO Tim Cook that it’s time that Apple pays its fair share of taxes. Stop dodging paying your taxes on more than $100 billion in profits parked in offshore tax havens. Add your name to our petition now!

Apple “follows the law.” Other giant companies also “follow the law” when they pay little or no taxes. The thing is, they also do what they need to do to keep the laws from being changed to benefit We the People instead of a few ultra-wealthy plutocrats.

Apple has transferred what Senator Levin called its “crown jewels” and its “golden goose” to a non-US subsidiary company. Apple transferred its “intellectual property” to an Irish “company” that Apple owns and runs. The company doesn’t really do anything except it “owns” the patents, etc. Irish law says a company that isn’t actually doing anything in Ireland doesn’t have to pay taxes, and US law says that Apple doesn’t have to pay taxes on profits of a foreign subsidiary company until the company passes its profits to the parent US company. As a result Apple is keeping more than $100 billion in the accounts of that Irish company. (The accounts happen to be in the US.)

Google also follows the law. Its Bermuda-based subsidiary made more than $10 billion in 2011, about 80% of its pre-tax profit that year.

So does Microsoft. Business Insider explains, in IT’S NOT JUST APPLE: The Ultra-Complicated Tax Measures That Microsoft Uses To Avoid $2.4 Billion In U.S. Taxes,

Microsoft Corp does 85 percent of its research and development in the United States. Of its 94,000 employees, 36,000 are in product R&D. The company had reported income of $23.2 billion, but with a federal tax liability of $3.11 billion only paid an effective federal tax rate of 13.4 percent. That’s much lower than the top statutory rate of 35 percent for corporations.

The way the group accomplished this is through a wide variety of foreign groups in tax havens like Ireland, Puerto Rico and Singapore, and by exploiting a recently updated tax loophole.

In fairness to Microsoft, they’re doing what nearly every other major technology company does.

And HP, Cisco, Coca-Cola, Johnson & Johnson, Oracle, Pfizer, Amgen, Dell, eBay and many others. They are all “following the law.” And they pay big bucks to help keep that law the way it is.

Apple keeps more than $100 billion out of the country to avoid taxes. All together the giant US multinationals are keeping somewhere between $1.7-$2 trillion “out of the country” and this amount is growing by hundreds of billions. If they ever do “bring the money home” by transferring the money to the US-based parent corporation they have to pay taxes on it, minus any taxes already paid to other countries. We the People should just get rid of the “till they bring the money home” loophole.

How They Do It

Here is how it works: You develop intellectual property (IP) in the US — software, patents, etc. — using US-educated employees who drive on US-built roads, based on US-funded scientific research, and you use the US legal system and the US financial system to become big and powerful. Then you “transfer” that IP to a foreign subsidiary that is a company in a post-office box somewhere that doesn’t make you pay taxes… You completely control that company but it is a “foreign” company. You pay a “license” fee to that company for everything you sell, so that company winds up with all the profits.

Watch this video describing how Google does it.

From then on, the profits made accumulate with the “foreign” company that “owns” the IP even though it is entirely controlled by the US company, set up as a “foreign” entity solely to keep the profits from being made by the US company.

This sort of scheme also pushes jobs and manufacturing out of the country. If you manufacture out of the country and buy the product from a foreign subsidiary the same deferral applies. So companies are “encouraged” — some would say forced — to follow these schemes. If one company is boosting its numbers with these schemes, this pretty much forces other companies to follow or fall behind, and maybe eventually fall dead.

Where Is The Money Really?

So where is the money that is being “kept out of the country?” Well, largely in the country but kept away from shareholders. The NY Times explained Monday, in Apple’s Web of Tax Shelters Saved It Billions, Panel Finds,

Atop Apple’s offshore network is a subsidiary named Apple Operations International, which is incorporated in Ireland — where Apple had negotiated a special corporate tax rate of 2 percent or less in recent years — but keeps its bank accounts and records in the United States and holds board meetings in California.

So the money is in US bank accounts (and investments), the corporate records are here, the board meetings are here, but it is an Irish corporation. Right.

Again, not just Apple. Yesterday, For U.S. Companies, Money ‘Offshore’ Means Manhattan,

During the last several years, major companies like Microsoft, Hewlett-Packard, Google and Abbott Labs have lowered their tax bills by arranging for their billions in profits to flow to subsidiaries that are technically offshore — even though some of the money is placed in United States Treasury bonds and other government securities.

When some companies can gain advantages from schemes like this other companies have to do the same or face extinction. It doesn’t matter if they hurt the country — the executives in these companies really have little choice but to “follow the law” if they want to stay in business. It is up to We the People to make the congress change these laws.

They Follow The Law But They Write The Law

It’s one thing when companies just “follow the law.” It is another thing entirely when they pay lobbyists and put big money into secret campaign funds and the rest of what they do to write these laws and keep these laws the way they are, hurting the country and us. And now these companies are actually arguing for a special tax break on this money they are holding “outside the country,” called a “tax repatriation holiday.” They want a break letting them pay much lower taxes than they already owe to reward then for keeping the money out of the country away from their own sharehodlers! On top of that they want something called a “Territorial Tax” that lets them do this from now on with no taxes at all!

I mean, you can’t blame them for trying, but, seriously?

What does it mean to be an American corporation? These giant American companies got where they are because they had the advantages of American-educated employees who got to work on American taxpayer-built roads, using American-funded basic R&D and American-funded courts and an American-backed financial system (remember the bailouts) backed up by a very expensive American military, etc. on their way up.

Now that they are successful it’s time for them to pay back to America for making them the giant, wealthy companies they are. But now they say, as one Apple executive famously said, they “don’t have an obligation to solve America’s problems.”

Wealthy corporate executives argue that these giant companies have no obligation except to make profits. But ask yourself this: “In a democracy why would We the People pass laws that set up entities that don’t benefit US?” It is time for We the People to remember that we are the boss of them, not the other way around, and make them pay their taxes.

Again: Tell CEO Tim Cook that it’s time that Apple pays its fair share of taxes. Stop dodging paying your taxes on more than $100 billion in profits parked in offshore tax havens. Add your name to our petition now!

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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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Sunday, May 19, 2013, was one of the saddest and most notorious moments in the sordid history of the federal budget.

Let’s start from the beginning.

It’s December 2012 and House Republicans are facing a number of politically very difficult and unpalatable choices because taxes will go up automatically on January 1, the sequester will go into effect on January 2 and the by-now- commonplace-but-still-called “extraordinary” measures the Treasury has been using for several months to deal with the problems caused by not raising the debt ceiling are about to be exhausted.

The tax problem was dealt with by agreeing to a smaller increase than was set to happen under current law and then blaming the White House for it. The sequester was postponed until March 1 when both the GOP and the administration thought that the threat of cuts to domestic and military programs, respectively, would cause the other to back down.

But it was the unique and disgraceful way the debt ceiling was handled that deserves the scorn.

In theory, with more exotic options like the trillion dollar coin and 14th amendment rejected by the White House, the only two choices facing Congress at that moment were to vote to increase the debt ceiling so the federal government could borrow the cash it needed to keep operating, or not to raise the borrowing limit and force Washington to default on some of its obligations. It was a very clear pass/fail, true/false, black/white choice.

This presented the House GOP with two very difficult choices. Voting against the debt ceiling hike was becoming increasing untenable as Wall Street and corporate America made it clear that was not an appropriate alternative from a financial perspective. But voting for the debt ceiling increase was a total nonstarter for the tea party wing of the GOP, which since it first came to prominence in 2010 had made debt ceiling votes one of its biggest political litmus tests.

The GOP’s solution to this dilemma was disgraceful. Instead of taking a political bullet and voting either for or against the debt ceiling, it came up with a scheme that allowed them to do neither. Rather than actually increase the debt ceiling and incur the wrath of their base, House Republicans brought a bill to the floor that required the federal debt ceiling to be iGNORED, that is, the Treasury could borrow whatever amounts it needed to cover its cash needs without any restrictions.

Then on May 19, without an additional vote and, therefore, with no member of the House or Senate having to go on record, the official federal debt ceiling would be raised to the amount the government had actually borrowed over the previous four-plus months. At that point, with the debt ceiling reached, the Treasury again would start to impose the so-called extraordinary measures and the countdown to the next debt ceiling crisis would begin.

At best, the federal debt ceiling is an anachronism, a vestigial organ of the federal budget process that should be eliminated. The actual borrowing needs are determined when legislation is enacted that changes either the amount the government spends or raises in revenues. Increases in the debt ceiling should be part of those bills rather than separate decisions and no member of Congress should be able to vote for a tax cut or spending increase unless he or she agrees at the same time to raise the debt ceiling to accommodate that choice.

But unless and until members of Congress and the White House have to face their constituents for agreeing to eliminate the debt ceiling, they should not be able to allow it to be ignored without taking responsibility for their actions.

The ultimate irony here is that congressional Republicans have been complaining about Senate Democrats not producing a budget between 2009 and 2012. That’s certainly true; Senate Democrats found the votes in favor of a congressional budget resolution with high deficits very politically difficult and decided that the better course of action was to ignore the requirement.

But now the same people on Capital Hill who relentlessly have castigated Democrats for ignoring their budget resolution responsibilities are the ones that authored the completely analogous procedure for the federal debt ceiling.

That makes May 19, 2013, one of the most egregious abrogations of legislative responsibility in U.S. history.

Originally posted at Capital Gains and Games.

Last week I wrote to the Executive Vice President of CBS News asking for a comment on Lesley Stahl’s unpublicized withdrawal from the Advisory Board of the Peter G. Peterson Foundation. The inquiry was acknowledged and forwarded on to the press officer for 60 Minutes. There’s been no response since then.

That’s a disservice to the millions of viewers who depend on 60 Minutes for honest, brave, and unbiased reporting. They deserve an answer to the question: Did Ms. Stahl’s association with the Peterson Foundation contribute to the powerful bias in the program’s May 5 broadcast, and does her apparent withdrawal from the Board constitute her acknowledgement of that fact?

There was a time when the fearless reporters on that program refused to accept the idea that important people can be allowed to duck pressing questions.  Mike Wallace was more likely to show up at a publicity-shy subject’s door with a camera crew than take “no comment” for an answer.

All of which raises the question: Does the new 60 Minutes need a knock on the door from its former self?  The old 60 Minutes told truth to power. As we discussed in a 2-part series last week, the new 60 Minutes appears to tell tales for the powerful.  (Ms. Stahl’s piece was entitled “Counterinsurgency Cops,” covered here; the rest of the program is addressed here.)

Ms. Stahl’s Board relationship with a foundation run by Peterson, a hedge fund billionaire turned noted anti-Social Security and anti-government activist, seem to bespeak the cozy relationship with wealth that the May 5 program reflected.  It was not until I appeared on the Thom Hartmann program last week (video here) that I learned of the disappearance of Ms. Stahl’s name from the list of Peterson Board members.

That’s when I wrote CBS News and the Peterson Foundation asking for comment. I did not expect a response from the Peterson Foundation, which only reveals what it chooses to reveal. But the silence from 60 Minutes was unexpected.

Stahl may have believed that it would be less controversial to be associated with the Peterson organization that it would, for example, to join the board of a left-wing group.  With the help of self-serving former Democratic pols, Peterson has been able to present his hard-right views as some sort of “bipartisan” consensus – when the genuinely bipartisan consensus among voters is parenthetically opposed to his own.

That stratagem has been very successful with other members of the news media, including ABC’s Martha Raddatz (whose notorious statement to Presidential debaters Romney and Obama that Social Security and Medicare are “going broke” repeated a well-worn Peterson falsehood.)

It has also apparently been successful with the producers and on-air talent at 60 Minutes. Why else would Ms. Stahl have publicly associated herself with a group whose views on Social Security stand further to the right (according to the polls) that those of the vast majority of voters – including 75 percent of registered Republicans and 76 percent of self-described Tea Party members?

After being publicly confronted over this issue, Ms. Stahl and her employer had two honorable choices: They could have defended her role on the Peterson Advisory Board, or they could have acknowledged that it was inappropriate and announced her resignation. They did neither. Apparently they simply removed her name from the list without comment.  It would have been more high-minded to ignore the controversy altogether than to take this step, which has all the appearance of stealing away in the dark of night.

On the other hand, that’s not necessarily a bad thing. It’s time that people who associate with the Peterson agenda – which combines an anti-government, anti-elderly stance with perpetual tax breaks for coddled corporations and the undertaxed rich – either defend that agenda or distance themselves from it.

Peterson’s vast network, Hydra-headed activist organization goes by many names, whether it’s teaming up with defense contractors and bank CEOs as “Fix the Debt” or distorting public opinion with dystopic PR gimmicks like “Budgetball“). It operates in secrecy by choice by choice and by design.

But CBS News, 60 Minutes, and Lesley Stahl do not. Individually and together, they have done some fine reporting over the years. There’s no reason to believe their fine work won’t continue for the foreseeable future. They do themselves a disservice, however, when they choose to act in secret – even if it’s to do something that, in this case, might be considered a good move.

If Lesley Stahl chose to leave the Peterson Board and disassociate herself with that group’s agenda, she made the right decision. But opting for secrecy was the wrong choice. It’s not too late for Ms. Stahl, 60 Minutes, and CBS News to speak truth to power once again.

Apple (like many giant, multinational corporations) has been avoiding paying the taxes they owe to the country by setting up foreign “subsidiaries” in tax-haven countries, and moving jobs and profit centers out of the country. They have accumulated billions upon billions of dollars in these tax havens. Now they want a special tax break to reward them for doing that.

Tomorrow the U.S. Senate Permanent Subcommittee on Investigations is scheduled to hold a hearing titled “Offshore Profit Shifting and the U.S. Tax Code – Part 2 (Apple, Inc.)” with Apple’s Tim Cook. Apple is holding more than $100 billion in tax haven countries, to evade U.S. taxes. At the hearing, Cook (2011 compensation $378 million) is expected to offer a proposal for changes to the corporate tax system.

Cook’s proposal is likely to be for a “tax repatriation holiday” and a “territorial tax system,” both of which mean giant, multinational companies like Apple will pay less in taxes, people like Cook will have even more money, and We the People will end up with higher taxes, fewer good schools and good roads and police and teachers and the other things government does to make our lives better. As a bonus, this makes giant multinationals that move jobs and profits overseas even more competitive against smaller American companies that keep jobs and profits here and do not have foreign “subsidiaries” located in tax havens.

New Report On Apple’s Tax Avoidance

Citizens for Tax Justice (CTJ), Americans for Tax Fairness (ATF) and the AFL-CIO held a conference call today to talk about a new report by CTJ, “Apple Holds Billions of Dollars in Foreign Tax Havens,” documenting Apple’s offshore tax avoidance. The report states that,

An analysis of Apple Inc.’s financial reports makes clear that Apple has paid almost no income taxes to any country on its $102 billion in offshore cash holdings. That means that this cash hoard reflects profits that were shifted, on paper, out of countries where the profits were actually earned into foreign tax havens.

How much is this costing us? First, with Washington all aflutter over deficits, the tax dollars: $35.3 billion. From the report:

Applying this same U.S. tax rate to Apple’s $102.3 billion offshore cash hoard as of March 2013 would generate $35.3 billion in U.S. income taxes, without deferral.

Worse, however, is the cost in jobs and manufacturing infrastructure. The current tax laws encourage companies to move jobs, factories and profit centers out of the country. They actually subsidize this with tax breaks!

“Back-Alley Thief”

On the call were Bob McIntyre, Executive Director of CTJ, Damon Silvers, Policy Director and Special Counsel for AFL-CIO and Frank Clemente, Campaign Manager for ATF.

ATF’s Frank Clemente said Apple is “acting like a back-alley thief trying to pick the pockets of American taxpayers.” Clemente also said the proposal for a tax holiday is “another mugging of the American taxpayer.”

CTJ’s Bob McIntyre said that Apple has more than $102 billion accumulated offshore, “virtually all in tax havens, never taxed. Often profits made in the U.S. that they pretend to earn abroad.” McIntyre said Apple is a “poster child for why we need to get rid of deferral,” and “If they are doing business in real countries and paying taxes, give them a credit, but companies like Apple, it all ends up in a situation where they pay very little in taxes. Deferral has cost the U.S. taxpayers in Apple’s case $35 billion and is growing every year.”

Hurts Smaller American-Based Businesses

AFL-CIO’s Damon Silvers described the terrible cost we pay for this, because it hurts smaller American-based businesses. Silvers spoke of the tax policies Apple seems likely to advocate in terms of the current “sequester” cuts, saying, “Today as Apple testifies we are dismantling vital government services, laying people off because we are in theory in a fiscal crisis. Head start, cancer research, national defense … there is a long list of vital functions not being carried forward because in the view of Congress we don’t have revenues to support it.”

“Apple is one of the most profitable corporations in America and perhaps the world, setting aside $102 billion, not paying tax. On a cash basis Apple only paid $3.3 billion in taxes worldwide, less than 10 percent. Walmart is paying 24 percent. But more damaging is what Apple is saying we should do with corporate taxes in general. Deferral lets companies with overseas subsidiaries avoid taxes. This is not something available to most companies, only to global corporations that can move profits and operation offshore.”

“Small business is paying the full freight as are all of us as individuals. But Apple is asking for a special rate on offshore profits of 10 percent. And now key lobbyists, led by Fix the Debt, are proposing foreign overseas earnings tax free.”

Resources

ATF has an extensive facts page at “Apple Is a Bad Apple when It Comes to Paying Its Taxes” and you can download the fact sheet by clicking here. You can tweet using the #BadApple hashtag.

CTJ has a page describing their new report, Apple Holds Billions of Dollars in Foreign Tax Havens and you can read a PDF of the full report by clicking here.

About CTJ and ATF

CTJ is a public interest research and advocacy organization focusing on federal, state and local tax policies. They push for tax fairness for middle and low-income families, requiring the wealthy to pay their fair share and closing corporate tax loopholes.

ATF is a coalition representing more than 280 groups. They are pushing for a tax system that makes the wealthy and big corporations pay their fair share of taxes.

FYI – ATF will be live blogging and live Tweeting from the Tuesday U.S. Senate hearing.

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The day may come when the worst nightmare a crooked banker or compromised regulator can have begins with the words, “You have a letter from Senator Warren.”

But before we get to that, here’s an experience that may seem familiar: You’re at a party or family get-together – a Sunday barbecue, perhaps – and someone says something like, “We need less government regulation.” Next thing you know you’re having an argument.

Here’s some advice for the next social event: There’s no need to get into an argument. You can just ask, “How do you figure?”

With every unreasonable assertion you can ask a reality-based question like, “Where’s the study that says that?” Once in a while they may cite a shallow white paper from some right-wing foundation, but more often than that they won’t even get that far. Soon the conversation will peter out with a “Well, uh …”

We can never go wrong asking questions. We only go wrong when we don’t ask questions.

That’s what makes this letter from Sen. Elizabeth Warren so important. For five years we’ve watched the Justice Department ignore overwhelming evidence of bank crime, on grounds that Attorney General Eric Holder made explicit only last March when he said that “the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute… it will have a negative impact on the national economy, perhaps even the world economy.”

The Securities and Exchange Commission, which has responsibility for pursuing civil bank fraud, has taken the same approach. So has the Federal Reserve, which has regulatory responsibility for the banking industry. They’ve all been saying pretty much the same thing: That criminal prosecution would destabilize the financial sector and put the world’s economy at risk.

With this letter, Sen. Warren is asking these agencies a very simple question: “How do you figure?”

Warren has already asked it of Thomas J. Curry, who runs the Office of the Comptroller of the Currency and who has taken the same hands-off approach. She didn’t put it that way, of course. What she asked him, for the record, was:

“Has the OCC conducted any internal research or analysis on the trade-offs to the public between settling an enforcement action without admission of guilt and going forward with litigation as necessary to obtain such admission? If so, can you provide that analysis to the Committee?”

She got pretty much the same answer from the OCC as you might get at that barbecue: “Well, uh …” What the OCC actually said was “The OCC does not have any internal research or analysis on the trade-offs of settling without an admission of liability.”

Really? So we’ve been watching as billions of dollars worth of fines and settlements exchange hands – with no admission of wrongdoing – for fraudulent behavior that in many cases then continues unabated, and you haven’t even checked to see if it’s a good idea or not?

The mind boggles.

Warren’s letter to Holder, Fed chair Ben Bernanke, and SEC Chair Mary Jo White, is remarkably even handed. “There is no question,” writes Warren,” that settlements, fines, consent orders, and cease and desist order are important enforcement tools, and that trials are expensive … and are often less preferable …

“But,” continues Warren, “I believe strongly that if a regulator reveals itself to be unwilling to take large financial institutions all the way to trial … the regulator has less leverage … The consequence, can be insufficient compensation to those who are harmed by illegal activity and inadequate deterrence of future violations.”

“Strong belief” is, if anything, too mild a term for something which has now been demonstrated over and over and over: Banks conclude these deals on very favorable terms, then continue to commit the same misdeeds.

Meanwhile, the government institutions which regulate banking are in the middle of an epidemic of (mostly) legalized corruption. The revolving door between regulatory agencies and Wall Street is stained with the moral bankruptcy of those who pass through it every day. That includes outgoing Deputy Attorney General Lanny Breuer, who was derelict in his duty to prosecute big banks … and who now enjoys a richly-paid perch at his former firm, Wall Street defense attorneys Covington & Burling, which was also Attorney General Holder’s firm before he entered “public service.”

Outgoing SEC Chair Mary Schapiro objected to the “revolving door” term and offered this by way of explanation: “In my case, there’s no revolving door… I won’t be going back to government.” We stand corrected. For people like Schapiro (and presumably Lanny Breuer) who won’t be darkening government’s doorstep again, the public trust isn’t a “revolving door.”

It’s a doormat.

Sen. Warren has already received an answer of sorts – more of an evasion, really – from Attorney General Holder. The Senator’s letter was sent on May 14. On May 16 Holder tried to retract his “too big to jail remarks” with a very unconvincing walkback in which he said he had been “misconstrued” and that “there is no bank, there’s no institution, there’s no individual who cannot be investigated and prosecuted by the United States Department of Justice.”

Banks can be prosecuted, says Holder. It just so happens that none of them have been. So he doesn’t need to answer the question anymore, right?

Wrong. The Attorney General must be held to account for his Department’s failure to pursue wrongdoing among his past (and, probably, future) clients. The Fed and the SEC must equally be held to task.

The Senator’s letter should be the start of a public conversation. But that will only happen if Sen. Warren gets widespread and very vocal support. Without it, this important line of inquiry will disappear under a mountain of trivia. That would be tragic.

This should be the start of a long-overdue public interrogation of our failed regulatory agencies. With any luck, the phrase “a letter from Sen. Warren” will soon carry the same weight that the phrase “60 Minutes is at the door” had in that program’s days of honor. Let’s hope so, because a lot of follow-up questions need to be asked, including: Why haven’t any individuals at major institutions been prosecuted for these crimes, since that wouldn’t put the institution itself at risk.

Sen. Warren’s letter could help build momentum to fight Wall Street’s and Washington’s legal – and illegal – criminality. But no one person, including a United States Senator, can do it alone. It’s going to take a movement – in the halls of Congress, in the boardrooms, and in the streets. But it can be done. Whenever somebody says otherwise, don’t argue. Just ask them a simple question:

How do you figure?

In the latest round of atrocities committed by conservatives, Republicans on the House Agriculture Committee sent to the House floor a farm bill on Wednesday that offers little food for families while dishing out corporate subsides. In protest, organizational leaders and activist met with elected officials on Capitol Hill to demonstrate opposition to cutting the Supplemental Nutrition Assistance Program (SNAP, formerly known as food stamps).

The proposed $21 billion in cuts to SNAP would cause nearly 2 million low-income Americans—among them people with disabilities, children, seniors and struggling parents— to lose an average of $90 per month. The bill also axes funding for nutrition education and eliminates program performance bonuses.

A new report, set to be released in the “Social Service Review” next month, reveals that in 2011 an estimated 1.65 million families lived on less than $2 a day per person; this figure includes 3.55 million children. How do these individuals survive in America on a Third-World income? The report finds they rely on the social safety nets that caught millions as they were falling because of the recession. This is also the same net that deficit hawks seek to whittle away at. As the wealthiest and most powerful nation, it is downright dirty that we let anyone go hungry and fail to provide for those in need.

Benefits already average less than $1.50 a day for each meal. You try living on that (I have, it’s called the Food Stamp Challenge). Although meager, SNAP is still our nation’s first line of defense against hunger. Rep. Barbara Lee, (D-Calif.) professed that when she was a single mother, food stamps “were a bridge over troubled water while I was struggling.”

Who will feel this funding void? “If divided evenly across Feeding America’s national network of food banks, every food bank would have to provide an additional 4 million meals each year for the next ten years, and that is just not possible,” said Bob Aiken, president and CEO of Feeding America. “There is no way that charity would be able to make up the difference. We are already stretched thin meeting sustained high need, and we simply do not have the resources to prevent hunger in all of the families who would be impacted by these cuts.”

At a time when 50 million individuals are hungry, 17 million being children, “we should be talking about how we improve and expand SNAP,” said Rep. Jim McGovern, D-Mass. His view is not only supported by research, such as that of a recent Institute of Medicine report that finds the program needs to be strengthened, but also by the majority of Americans. Seven in 10 voters say that cutting food stamp funding is the wrong way to approach deficit reduction. The Alan Simpson-Erskine Bowles deficit commission didn’t even recommend cutting SNAP to reduce the deficit. It is also important to note that just this week the CBO said the “deficit disaster” is now solved for the next 10 years.

Yet, Republicans continually ask our most vulnerable to pay while safeguarding corporations and bankers. “The pattern that is happening here is really diabolical.” said the passionate Rep. Rosa DeLauro, D-Conn. Although she is a representative of the nation’s wealthiest state, one in seven children go to bed hungry in her district.

“If you think this is the right path, you don’t live in the same America I do!” said Rep. Marcia Fudge, D-Ohio.

Aside from the moral imperative, the SNAP program helps our economy and is fiscally responsible. In 2011, SNAP lifted nearly 4 million Americans out of poverty, including 1.7 million children and 280,000 seniors. Economist at Moody’s Analytics and the Department of Agriculture estimate that for every $1 spent on SNAP benefits, there is an economic return of $1.73 to $1.79. Inflicting more hunger on our nation worsens health, causing higher health cost that the taxpayer will have to pick up, and reduces our educational outcomes.

Feeding our nation while spurring our economy is a vision we all should be able to agree on. No one wants to live on welfare; people want jobs. Until our government can actually put in place policies that will produce jobs, the least we can do is make the wise investments in programs like SNAP, Social Security, Medicare and Medicaid to support the economic recovery and future success of financially struggling Americans.

The deficit is now down 60 percent as a percent of gross domestic product. It is down more than the deficit hawks Alan Simpson and Erskine Bowles asked for. This rapid reduction is seriously hurting the economy and jobs, but demands for cuts continue. It is time for Congress and the President to “pivot” to focusing on our real problems: the jobs gap, the wage gap and the trade gap.

Mythical Deficit Problem Solved

The “deficit problem” is man-made. When Bill Clinton was president we were paying off the debt. George W. Bush turned Clinton’s budget surpluses right around, calling deficits “extremely positive news” because they would later force cuts in government. Ronald Reagan’s “strategic deficits” began a strategy to make the borrowing appear so bad that the public would be panicked into allowing cuts in the things government does to make our lives better – so the wealthy few could have even more wealth and power. (Reagan tripled the national debt, Bush doubled it again.)

So after Bush we had a problem. When ‘W’ left office the budget deficit was $1.4 trillion. Then after Obama took office Wall Street and the right started terrifying the public about deficits and outlining their “solutions”: Cut government, cut regulation of the giant corporations, cut entitlements, cut investment in infrastructure, privatize public assets, cut the safety net, etc… Cut the things that government does to make our lives better (government spending) and cut the things government does to protect us from the immense power of the insanely wealthy and their giant corporations.

But something got in their way. The deficit started coming down before all of the “solutions” could be forced on us. The deficit is now down 60 percent as a percent of GDP from the level Bush left behind (see the chart in this post).

The 2010 “Simpson-Bowles” plan called for austerity to lower our budget deficit to 2.3 percent of GDP by 2015. But the latest CBO budget projections say the deficit will be 2.1 percent of GDP in 2015.

Ezra Klein, in “CBO says deficit problem is solved for the next 10 years,” writes, “…the debt disaster that has obsessed the political class for the last three years is pretty much solved, at least for the next 10 years or so.”

Problem solved – austerity and the sequester can go away. For those of us outside Washington and in the real world we’ve been saying all along this isn’t the problem, the problem is that there aren’t enough jobs, people’s wages are stagnant or falling and the country is losing more than a billion dollars a day from bad trade deals. We have real problems to solve, so let’s get to it. Let’s address the job gap and the wage gap and the trade gap.

The mythical budget deficit is problem gone; let’s worry about our real problems.

The Economy Can’t Recover Without An Emphasis On Fixing Jobs, Wages And Trade

The economy can’t recover until housing recovers. Housing can’t recover until people can afford to buy houses. People can’t afford to buy houses until they can get jobs, and those with jobs can’t afford to buy houses until wages go up. Wages cant go up until the trade problem is fixed. And the trade problem is killing jobs.

Explained a different way:

1. The economy can’t recover until housing recovers.
2. Housing can’t recover until people can afford to buy houses.
3. People can’t afford to buy houses until they can get jobs,
4. and those with jobs can’t afford to buy houses until wages go up.
5. Wages cant go up until the trade problem is fixed.
6. And the trade problem is killing jobs.

They say that housing is the key to recovery from recessions. Forbes: Buffett Says Housing Is Key To Recovery, USA Today: Housing holds key to full job growth rebound, Time: Can the Economy Get Healthy Without a Housing Recovery? CAP: A Strong Housing Market Is Critical to Our Economic Recovery and so on. But on NPR Monday, in Is The Housing Recovery Just A Mirage?, they made the key point: “What we really need to do is focus on jobs and unemployment to get people able to have the money to spend on a house.”

Yes, jobs are being created. We were losing 800,000 jobs a month when President Obama took office, and now we are gaining just enough jobs each month to keep up with and get a little bit ahead of growth in the labor force. But there are not enough new jobs and too many of the new jobs are low-wage jobs. So the middle class is still shrinking, and people can’t afford to buy houses to get a real housing recovery underway.

We need more jobs. We have a jobs emergency.

The Jobs Gap

The Hamilton Project explains the jobs gap as “the number of jobs that the U.S. economy needs to create in order to return to pre-recession employment levels while also absorbing the people who enter the labor force each month.” They say:

If the economy adds about 208,000 jobs per month, which was the average monthly rate for the best year of job creation in the 2000s, then it will take until April 2020 to close the jobs gap. Given a more optimistic rate of 321,000 jobs per month, which was the average monthly rate of the best year of job creation in the 1990s, the economy will reach pre-recession employment levels by December 2016.

One more thing: “As of April, our nation faces a “jobs gap” of 10.0 million jobs.”

10 million jobs still needed just to catch up to where we should be. That is huge.

Where did the jobs go?

The Trade Deficit

According to economist Dean Baker the trade deficit represents American consumers spending their money overseas rather than here. And that means those dollars are “creating jobs” there, not here. His point was driven home last year when he wrote that, “The main factor leading to job loss [in the 2000s] was the growing U.S. trade deficit.”

The trade deficit represents millions of jobs. That more than $1 billion per day we send out of the country represents how many jobs at $50,000 per year? That’s good jobs sent out of the country every day of every week of every year. That is the trade deficit.

We can start by fixing currency manipulation. A “strong dollar” is a lot of the problem because it means things made here cost more and things made elsewhere cost less. So we aren’t able to sell as much and we are buying more than we should.

A February report from the Economic Policy Institute, “Reducing U.S. trade deficit will generate a manufacturing-based recovery for the United States and Ohio,” written by Robert E. Scott, Helene Jorgensen, and Doug Hall, looked at the job-cost of the portion of the trade deficit that is caused by currency manipulation. The report concludes that fixing just this problem would reduce the trade deficit by between about $190 billion and $400 billion over the course of three years and bring us between 2.2 million and 4.7 million U.S. jobs. Doing this would lower the unemployment rate between 1 percent and 2.1 percent and increase GDP between 1.4 percent and 3.1 percent.

That is just the portion of the trade deficit caused by currency manipulation and you can see the immense cost. Imagine if we took that step as well as other steps to eliminate the trade deficit.

The Wage Gap

A trade deficit also means that our workers not only face high unemployment but are also pitted against exploited workers in countries where those workers don’t have a say in how things are done. This inevitably drives down wages as employers move jobs offshore and remaining workers compete for jobs, all the while afraid to make waves and ask for raises lest their job be shipped out of the country as well.

American workers face high unemployment and then on top of that they face competition from people who are paid a fraction of what Americans earn. The trade deficit represents a significant contributor to this problem.

Fixing the trade deficit also fixes some of the wage gap. But we also need strong unions and strong government to combat the power of the giant corporations and demand that regular working people a fair share of the proceed of our economy.

The “Sequester” And Other Budget Cuts Just Make Things Worse

On top of this, our own government is aggravating the problem, with this wealthy-donor driven focus on deficit reduction instead of job expansion.

For example, Politico: Sequestration gets real for furloughed workers,

Sequestration went from wait-and-see to here-it-is Tuesday when the number of furloughed federal workers hit an eye-popping 820,000. Defense Secretary Chuck Hagel told 680,000 civilian workers they’d have to stay home 11 days without pay. About 140,000 workers from other government agencies have already been given furlough notices.

The number is expected to grow …

The deficit is not a problem. The Simpson-Bowles target has been reached and passed. The austerity is harming the economy and hurting people. Congress and the President should pivot to jobs. They need to fix the jobs gap, the wage gap and the trade gap, and if they continue to ignore these real problems it is up to We, the People to apply the necessary pressure to make them do it.

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