Tag: austerity
Japan Premier Calls Election, Puts Off Tax Hike

Japan Premier Calls Election, Puts Off Tax Hike

By Takehiko Kambayashi and Lars Nicolaysen, dpa (TNS)

TOKYO — Japanese Prime Minister Shinzo Abe on Tuesday called snap elections and postponed a planned sales tax hike after the economy unexpectedly slipped into recession for the third time in four years.

The premier said he would dissolve parliament on Friday, ahead of elections scheduled for December 14. Official campaigning is to start on December 2, the premier told leaders of his ruling Liberal Democratic Party (LDP) and junior coalition partner New Komeito, the Kyodo News agency reported.

Analysts say Abe’s LDP hopes to make big gains by taking advantage of the weakness and fragmentation of opposition parties.

“I will resign if the ruling coalition fails to secure a majority” in the powerful lower house, the premier told a news conference.

Of the 480 seats in the outgoing lower house, the LDP holds 294 while New Komeito controls 31. The opposition Democratic Party of Japan (DPJ) has 54 seats and the Innovation Party 42. Other small parties and independents share the rest.

Abe was elected with a popular mandate in December 2012 and vowed to revive the world’s third-largest economy, which his drastic measures have so far failed to do.

The premier’s announcement came after official figures showed Monday that the economy had shrank at an annualized rate of 1.6 percent in the July-to-September period. The data was far worse than an average market forecast of a 2-percent expansion.

The latest contraction followed the introduction of a controversial sales tax increase in April, from 5 to 8 percent.

Abe said an additional tax increase to 10 percent, originally scheduled for next year, will be put off until April 2017.

The Japanese economy “has yet to return to a recovery track,” the premier said.

Implementing the tax hike as scheduled would likely “threaten the exit from deflation,” he added.

Economic Revitalization Minister Akira Amari has conceded that the impact of the tax hike on the economy was bigger than expected.

Abe’s much-heralded economic policies, a so-called “Abenomics” mix of fiscal stimulus, monetary easing and structural reforms, have failed to produce the intended results.

On Tuesday, Abe also pledged to craft a supplementary budget for the current financial year through March 2015 to prop up the economy.

Opposition parties have wasted no time in criticizing the premier after the release of the data.

“The limit of Abenomics has been shown once again,” Yukio Edano, secretary general of the main opposition party DPJ, said.

On Sunday, a Tokyo-backed incumbent suffered a crushing defeat in the gubernatorial election on the southern island of Okinawa, dealing a serious blow to Abe’s government.

Tokyo wants to proceeds with a plan to build a replacement facility for a key U.S. military base on the island.

Photo: Secretary of Defense Chuck Hagel greets Japanese Prime Minister Shinzo Abe, at the Prime Ministers official residence Sori Daijin Kantei in Tokyo, Japan April 5, 2014. Hagel and the Prime Minister met to discuss issues of mutual importance. (Via Wikimedia Commons)

GOP Chases Fake IRS Scandal, But Makes The Real One Worse

GOP Chases Fake IRS Scandal, But Makes The Real One Worse

With the exception of the 2012 Benghazi attacks, no Obama-era controversy has animated Republican imaginations quite like the one surrounding the Internal Revenue Service.

Congressional Republicans’ version of the scandal originally went like this: President Obama ordered the IRS to target right-wing organizations applying for tax-exempt status as non-political “social welfare” groups, leading the agency to harass those on the president’s Nixonian enemies list.

It turns out that none of that ever happened; the IRS targeted liberal groups as well as conservative ones, not a single Tea Party group was denied tax-exempt status (despite overwhelming evidence that many of them were engaged in political activity), and no evidence ever emerged that the White House was involved in any of it. Still, that hasn’t stopped Republicans from escalating the “scandal” in increasingly ridiculous ways.

The current outrage centers around the IRS’ claim that thousands of former IRS official Lois Lerner’s emails were lost when her computer crashed in 2011. Although evidence and logic suggest that this was not part of a massive cover-up, Senator Ted Cruz (R-TX) is threatening to impeach Attorney General Eric Holder unless he appoints a special prosecutor to investigate it, and Reps. Louie Gohmert (R-TX) and Bill Flores (R-TX) have introduced a bill promising a $1 million bounty to anyone who can restore the lost emails, while threatening to cut the salaries of IRS employees by 20 percent unless the emails are recovered.

As it happens, Republicans have already hammered IRS employees with cuts since they took control of the House of Representatives in 2011 — and they didn’t even need a “Nixonian” “scandal” to do so.

In a report released Wednesday, the Center on Budget and Policy Priorities illustrates just how badly Congress has constrained the IRS’ ability to do its job. Due to a combination of discretionary budget cuts and sequestration, the IRS has been left with an $11.3 billion budget for 2014. That’s $840 million lower than it was in 2010, amounting to a 14 percent cut when accounting for inflation.

CBPP Chart 1

As a result of the cuts, the IRS has been forced to reduce its workforce by 11 percent since 2010, even as the agency’s workload has substantially increased (for example, in addition to the IRS’ new campaign finance responsibilities, CBPP notes that the number of individual tax returns has grown by 1.5 million annually over the past decade).

CBPP Chart 2

Furthermore, even as the IRS’ remaining workers have been forced to take on more responsibility, the agency’s training budget has been slashed by an astonishing 87 percent between 2010 and 2013, the most recent year with available data. If Congress wants to know why the IRS struggled so badly at sorting out the glut of groups that applied for tax exemption, there is your answer.

President Obama’s 2015 budget would reverse the rapid slide in the IRS’ funding; it would increase the agency’s budget by $1.2 billion from this year’s level, returning it to roughly its 2010 level (before adjusting for inflation).

The House appropriations subcommittee wants to go further in the other direction, however; it has proposed cutting IRS funding by yet another $340 billion. This is especially illogical considering the GOP majority’s supposed desire to limit the budget deficit. According to the Treasury Department, each $1 spent on the IRS budget yields $4 of revenue.

“Policymakers should give the IRS sufficient resources to carry out its mission,” the CBPP paper concludes. “In particular, policymakers who profess to be concerned or even alarmed about the nation’s current or future fiscal course should provide the IRS with the funding it needs to administer the nation’s tax laws and collect taxes due under the laws of the land.”

CBPP is not the first to sound the alarm over the IRS’ lack of funding; The National Memo’s David Cay Johnston made a similar argument in 2013, at the height of the “targeting” controversy.

Republicans are clearly desperate to uncover a real scandal at the IRS. But if they really want to improve things at the much-maligned agency, they need look no further than their own budget proposals.

Photo via Wikimedia Commons

Kingston Family: Vote For Our Cheap Dad [Video]

Kingston Family: Vote For Our Cheap Dad [Video]

U.S. Rep. Jack Kingston (R-GA) released a new ad on Wednesday, in which his children praise their father’s extreme miserliness as a reason to make him Georgia’s next U.S. senator.

“Our dad is Jack Kingston. He really is cheap, and it’s not just the car he drives,” one daughter says.

“He’ll drive five miles on empty, just to save two cents a gallon,” adds one of his sons.

“We thought ‘Hand-Me-Down’ was the name of a department store,” says another.

After a few more anecdotes about their father’s household austerity plan, Kingston’s son John gets to the crux of the argument.

“For dad, it’s about personal responsibility and respecting the value of a dollar,” he says.

“It will be the same way in the Senate,” his daughter Ann adds.

The ad is reminiscent of the biographical video about Mitt Romney from the 2012 Republican National Convention, which highlighted his frugality (and was immediately overshadowed by Clint Eastwood’s infamous empty-chair meltdown).

Kingston’s effort to paint himself as a fiscal hawk — even at home — has a bit more urgency than Romney’s did. The 11-term congressman is locked in a tight five-way Senate primary, in which all the candidates are struggling to present themselves as the most conservative. To that end, Kingston voted against Paul Ryan’s latest budget plan, arguing that its $5 trillion in cuts are insufficient. He has also suggested that children on food aid should be forced to sweep the cafeteria floor to earn their lunches and learn the value of a dollar (while declining to mention that he receives scores of free meals ever year, courtesy of the taxpayers).

According to The Huffington Post’spolling average, Kingston currently sits in second place in Georgia’s Senate race. If no candidate earns over 50 percent in the May 20 primary — which seems almost certain — then the top two candidates will advance to a July 22 runoff.

Screenshot: YouTube

House Narrowly Passes Ryan Budget

House Narrowly Passes Ryan Budget

The House of Representatives passed Paul Ryan’s controversial “Path to Prosperity” budget on Thursday, in a 219 to 205 vote — 12 Republicans joined the Democratic minority in opposing the plan.

The plan, which would slash $5.1 trillion from the budget over 10 years, has no chance of becoming law given the Democrats’ control of the Senate and White House. Still, it does provide a clear picture of the Republican Party’s austere priorities.

According to the liberal-leaning Center on Budget and Policy Priorities, 69 percent of the budget’s non-defense cuts would come from programs that benefit Americans with low or moderate incomes. That includes $137 billion in cuts to SNAP, up to $125 billion in cuts to Pell grants, and about $250 billion in still-unspecified cuts (of which CBPP conservatively estimates that $150 billion will hit low-income programs). It would also cut $732 billion from Medicaid while turning it into a block-grant program, and radically change Medicare by converting it into a premium-support voucher system. And while the poor and elderly bear the brunt of the cuts, Ryan’s plan would provide millionaires with an average annual tax cut of at least $200,000.

Democrats have made no secret of their desire to make November’s elections a referendum on Ryan’s budget (as opposed to President Obama, or the Affordable Care Act).

“It’s a tough climate for us right now,” Rep. Steve Israel (D-NY), chairman of the Democratic Congressional Campaign Committee, said shortly after the budget’s release. “But this budget helps change the narrative.”

“The Republican budget — that will define the next seven months,” he added. “With this budget, Republicans are turning their back[s] on the middle class.”

Similarly, the Democratic Senatorial Campaign Committee quickly launched a campaign dubbing Ryan’s plan the “Koch budget.”

Ryan’s budget could play an especially prominent role in tight Senate races in Arkansas, Colorado, Georgia, and Louisiana, where House Republicans are attempting to move to the upper chamber.

Photo: Crazy George via Flickr