In an attempt to keep the political war against renewable energy in the headlines, Republicans are holding another hearing to question the value of government investments in the sector.Looks like ten political sideshows on Solyndra weren’t enough.If tomorrow morning’s hearing were being used as a chance to objectively assess where the industry stands, that would be one thing. But the title of the meeting gives away the real political intent: “The Obama Administration’s Green Energy Gamble: What Have All The Taxpayer Subsidies Achieved?Actually, those green energy investments have yielded substantial returns. And before the political grandstanding begins in the House of Representatives tomorrow, here are five important things you should know about how promotion of clean energy has supported American businesses and consumers:1. The 1603 grant program supported up to 75,000 jobs and 23,000 renewable energy projects during the height of the recession. When the recession hit, it was very difficult for project developers to find banks that were willing to utilize tax credits. So a cash grant program was created to give companies an easier way to finance projects. While it’s very difficult to know the exact influence of the grant on each project, the program played a major role in maintaining momentum — helping support $25 billion in gross economic activity, according to the National Renewable Energy Laboratory. 2. The production tax credit helps leverage up to $20 billion in private investment annually. With this key tax credit in place, the wind industry has dropped costs by 90% over the last few decades. It’s helped states like Iowa reach 20% wind penetration — bringing that state over 215 businesses that support 5,000 workers. Across the rest of the U.S., the entire industry supports 75,000 jobs, with 30,000 in manufacturing. However, up to 37,000 of those jobs could due Congressional lawmakers’ inability to extend the tax credit.3. The loan guarantee program is expected to cost $2 billion ...
Sallie Mae is the country’s largest provider of private student loans — and despite their innocuous name, they’re guilty of some pretty awful practices.Sallie Mae has a dual role of a lender and collector. As Elizabeth Warren said, “Sallie Mae gets to play every hand at the poker table.” And, “Student-loan debt collectors have power that would make a mobster envious.”When customers call seeking assistance, Sallie Mae representatives say pretty terrible stuff — a story from one of our members: “I encouraged my grandson to pursue a college degree, because I thought as a Black male, his chances of landing a decent paying job would be much improved. Since he graduated, he has been unable to find a job with a living wage. His paycheck barely covers the gas he needs to go to a low paying job, much less repay his student loans. Because I co-signed, I now use a great portion of my Social Security check to pay the loans. When I called Sallie Mae to work out a payment plan, the representative told me to tell my grandson to sell his plasma [i.e., his blood plasma] to pay the loan.”As a debt collector, Sallie Mae is highly abusive, using the Freedom of Information Law to collect personal information about students from their schools, and contacting borrowers’ employers, families, and neighbors, to the point of violating the Fair Debt Collections Practices Act. One Rebuild the Dream member shared this story with us: “My son not been able to find a decent job, is barely making ends meet so has not been able to start paying his loans. He’s talked to Sallie Mae regarding this but they continue to call him daily, including Saturday and Sunday. Then they started calling me daily since I was listed as a secondary contact. When I complained to their representative that this was harassment, I was informed that they can call each contact number up to eight times per day.”Charges unnecessary and exploitative forbearance fees — $50 per loan, per 3-month block — essentially an “unemployment penalty”Successfully lobbied Congress to strip away basic consumer protections from student loans, such as bankruptcy protection on private student loans.Successfully lobbied Congress to obtain Draconian collections practices, including garnishment of wages, tax returns and federal benefits such as ...
In February, President Obama laid out his framework for reforming corporate taxes. He proposed a substantial cut in the corporate income tax rate from 35 to 28 percent—a boon to companies, especially small businesses that lack the opportunities for tax avoidance that major companies regularly exploit.As I wrote at the time, the president proposed to make this tax cut revenue neutral so it doesn't increase the deficit. He called for reforming many of the provisions of the tax code that create significant inequities and economic distortions.Last week, big business responded.On Wednesday, CEOs of 18 of the nation's largest companies sent a letter to Treasury Secretary Timothy Geithner objecting to the proposal to raise the 15 percent tax rate on dividends and capital gains for households making more than $200,000 ($250,000 if married). These CEOs claim that bringing the taxes of high-income households more in line with everyone else's will reduce investment "when we need capital formation here in America to create jobs and expand our economy." It's a claim that rings hollow. U.S. companies are currently sitting on a mountain of cash that they aren't investing, and many are engaged in buying back their own shares. This artificially raises share prices and serves no useful purpose, but it does increase the value of CEO stock options. The higher taxes might put a crimp in the lavish lifestyles of the wealthy, but they are unlikely to affect the investment behavior of companies. Notably, this change in the tax code would not affect anyone with household income under $200,000 a year or whose money is invested in a 401(k) or an individual retirement account.And earlier in the week, Ernst & Young put out a report conducted on behalf of the Private Equity Growth Capital Council that challenged the administration's proposal to limit the tax deductibility of corporate interest payments. This change to the corporate tax code would reduce the disparity in the tax treatment of debt and equity financing of investment. The administration did not specify what the limit might be, but Sen. Ron Wyden, a Democrat from Oregon, and Sen. Dan Coats, a Republican from Indiana, have proposed reducing the deduction from 100 percent of interest paid to 75 percent. This provision would have its greatest effect on private equity companies, which engage in leveraged buyouts that use lots of debt to acquire businesses for the portfolios of their investment funds. The ratio of debt to the enterprise value of publicly traded companies is about 14 percent, while companies acquired in leveraged buyouts have a debt-to-enterprise value of about 67 percent.The Ernst & Young report claims that as a result of the Wyden-Coats tax plan, "the corporate capital stock in the United States would be smaller. … A smaller corporate capital stock would adversely affect worker productivity and, ultimately, living standards." Sounds scary, ...
Big brewers like Anheuser-Busch frequently admonish us imbibers of their grain products to "drink responsibly." Well, I say back to them: Lobby responsibly.In particular, I point to a disgusting binge of besotted lobbying by Anheuser-Busch (now owned by the Belgian beer conglomerate InBev) and other beer barons this year in the Nebraska legislature.At issue was the "town" of Whiteclay, smack dab on the Nebraska-South Dakota border. I put "town" in quotes because only 10 people live there — but it is home to four beer stores. Why? Because right across the state line is the Pine Ridge Indian Reservation of the Oglala Sioux tribe, which has a devastating problem of alcohol addiction among its 20,000 members, combined with intractable and dispiriting poverty.Whiteclay exists solely so booze peddlers can profit from the Oglala tribe's addiction miseries. They sell more than 4 million cans of beer a year to Pine Ridge residents! This includes literally making a killing by peddling high-alcohol malt liquors, such as Busch's aptly named "Hurricane High." So much for "Drink responsibly."A fourth of the children on the reservation are born with fetal alcohol birth defects. Life expectancy of tribal members is less than 50 years. And more than 90 percent of the violent crime on the reservation is attributed to drunkenness. On Pine Ridge itself, the tribe bans the sale and consumption of alcohol — the Whiteclay stores, positioned only a short walk away, are the source of the addictive drug and its consequences.Responding to this grotesque exploitation of an epidemic illness, Republican state Sen. LeRoy Louden introduced LB 829 this year, a modest bill to designate Whiteclay as an "alcohol impact zone." Used successfully in Tennessee, Washington state and elsewhere, these zones allow authorities to take such steps as limiting store hours and high-alcohol beers.Of course, Busch and its other beer buddies lobbied responsibly by backing the bill, right?Ha! Like gators on a poodle, their lobbyists leapt on the legislature, calling in chits from key lawmakers (who'd taken thousands of dollars in campaign cash from the industry) to kill the bill.Tyson Larson, one of the senators inebriated with beer money, sputtered his opposition to LB 829 with this stunningly obtuse declaration: "We're not here to protect people from themselves." Surely that was beer talking.Then there's Russ Karpisek, chair of the Senate committee handling the bill. He tried to rationalize his opposition by pitting Pine Ridge citizens against Nebraskans whom he said were worried that if Whiteclay were restricted, the beer mongers might simply move the problem 40 miles or so down the road.Even he had to admit that this was, at best, a flimsy excuse for doing nothing. When some asked Karpisek, "Well, if you had a crack house across the street, wouldn't you want to do something about it, even if it might pop up somewhere else the next day?" The chairman frankly conceded, "I didn't have a good answer for that."But who needs logical answers when Anheuser-Busch alone has put $4,000 in ...
Mitt Romney’s reaction to J.P. Morgan Chase’s mounting losses from reckless trades is “the market will take care of it.” His spokesman says “no taxpayer money was at risk” so we don’t need more financial regulation. Romney has even promised to repeal Dodd-Frank if he’s elected president. Yet at the same time, Romney has come out strongly against same-sex marriage. He’s also against abortion. He has no problem with government intruding on the most intimate of decisions a person makes. He’s got private and public morality upside down. He doesn’t want to regulate where regulation is necessary — at the highest reaches of the economy, where public immorality has cost us dearly, and will cost even more unless boardroom behavior is constrained. Yet he wants to regulate where regulation is least appropriate — at the level of the individual, in bedrooms and other intimate spaces, where private morality should govern. This is a dangerous confusion. It should be a matter of personal choice whom to marry and when to have children. But it is undoubtedly a matter of public choice whether big banks should be allowed to take the kind of risky bets that plunged the economy into the worst downturn since the Great Depression, and whether people with great wealth and should be able to buy our democracy with huge campaign contributions. Please see the attached video and pass it on.
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