The Great Debate

Reuters reports [“No sign Congress meant to limit health exchange subsidy: CBO,” Dec. 6] that a recent Congressional Budget Office letter “could complicate” efforts to stop the Internal Revenue Service from imposing “Obamacare’s” employer mandate in states that refuse to implement a health insurance “exchange.”

In fact, the CBO’s letter devastates the IRS’s already weak case.

The Patient Protection and Affordable Care Act imposes a $2,000-per-worker charge on employers only if one of their employees receives a “premium assistance tax credit,” and the act authorizes those credits only if states create their own exchanges.

If a state opts instead for a federal exchange, as more than 30 states have, the IRS has zero authority to penalize employers there. “As even some health law supporters concede,” Kaiser Health News reports, “the claim that Congress denied to the federal exchanges the power to distribute tax credits and subsidies seems correct as a literal reading of the most relevant provisions.”

Yet the IRS is attempting to issue those tax credits — and penalize employers — where it has no authority to do so. Oklahoma’s attorney general has filed suit to protect its employers from this illegal tax.

The IRS says it is carrying out congressional intent — a curious claim from an agency violating the express language of a duly enacted statute. The only piece of legislative history the IRS has offered to support its action is the CBO’s cost projections of the bill. The CBO predicted there would be tax credits issued in all states.

Has the Sandy Hook Elementary School massacre shifted the gun control paradigm? It certainly looks that way. The outcry for tougher gun laws is reaching a fever pitch.

But it may not be that easy.

The debate over guns has been paralyzed since 1994. That was when gun owners came out in massive numbers and shocked the political world by giving Republicans control of the House of Representatives for the first time in 40 years. They were seeking retribution for the Brady handgun control bill and the assault weapons ban passed by the Democratic Congress and signed into law by President Bill Clinton.

Since 1994, Democrats have not dared challenge the status quo on guns. Especially since the Supreme Court ruled in 2008 that the Constitution protects an individual’s right to own a firearm. President Barack Obama rarely mentioned gun control in the 2008 or 2012 presidential campaigns. New gun control laws have never been high on his policy agenda.

This essay is a response to the Reuters special report The Unequal State of America.

Income inequality is a difficult story to get your arms around, and I think Reuters has done a splendid job. I was particularly intrigued to read about the hollowing out of middle-class jobs within the federal government in D.C. I wasn’t aware that the government had so thoroughly followed the private sector’s lead in this regard.

It is important to acknowledge that while government has played an enormous role in creating the trend toward growing income inequality in the U.S., surprisingly little of that role has involved the most obvious ways government affects income distribution, i.e., taxes and benefits. Overall, the federal government redistributes about one-quarter less today than it did in 1979. But the inequality trend is more pronounced when you look at changes in income before taxes and benefits are taken into account. For example, the share of the nation’s income going to the top 1 percent of households more than doubled from 1979 to 2008. For years economists concluded that such findings meant that income inequality was market-driven. But they failed to ask whether government policies might be shaping the course of the market.

It is never acceptable for elected officials to put partisan politics and special-interest pledges ahead of their country. But when the stakes are great, as they are with the fiscal cliff negotiations, it is reprehensible.

People who talk about the political benefits of heading off the cliff need to have their heads examined. The blunt ax of massive spending cuts, along with huge across-the-board tax increases, would be irresponsible, possibly triggering another recession. It’s offensive for some Democrats and Republicans to suggest their party could “win” under this scenario, since the country and the American people would be sure losers.

Both parties say they want a deal. The key question is whether they will resist their respective wings, special-interest pressures and short-term political considerations to achieve one.

HSBC’s $1.92 billion payment to U.S. authorities to avoid prosecution for money-laundering practices, including transferring funds for Mexican drug cartels, raises serious questions about the flow of narco-cash in the international banking system. The time has come to tackle the culture of impunity that allows these illegal transactions.

The illicit drug trade remains international organized crime syndicates’ most lucrative source of income. Drug traffickers may be laundering up to 70 percent of the estimated $320 billion they make from illicit drugs annually, according to United Nations Office of Drugs and Crime (UNODC). Yet officials have been able to seize less than 1 percent of this.

In Central America, for example, we have all seen the effects of crime and drug trafficking. When criminals fight, it is innocent bystanders who often die. The homicide rate in El Salvador is 69 killings per 100,000 citizens; in Guatemala it is 39 per 100,000; and in Honduras it is 92 per 100,000. By contrast, in Great Britain, the homicide rate is roughly 1.2 per 100,000.

Barack Obama may finally be defining himself as president. The question is: What took him so long to seize the narrative and find his character as “leader.”

Obama now has strong public support in the fiscal crisis faceoff. Even as the House Republicans scramble to find a way into the argument, the president has a tight grip on the storyline.

This is a big change from the fierce healthcare reform fight and the 2011 debt limit crisis. The chattering class then continually asserted that Obama had “lost control of the narrative.”

Quite frankly, thoughts and prayers can only go so far. They have limited ability to protect our families.  The time has come for our elected leaders – including President Barack Obama – to stand up and fight for our families and children, and their safety.

Obama’s comments Friday after the shooting tragedy in Newtown, Connecticut, where 20 little children were killed along with six adults in the Sandy Hook Elementary School, were personal and touching. Yet the president’s only allusion to something like gun control were his words about taking “meaningful action.”

But the American people support stronger gun safety measures more than he believes or cares to say. Polls now demonstrate this to be true.

“We’ve endured too many of these tragedies in the past few years,” President Barack Obama said in a statement responding to the fatal shooting of at least 26 individuals, including 20 children at Sandy Hook Elementary School in Newtown, Connecticut Friday morning. This shooting caps a year filled with mass shootings, including five killed in Georgia, seven killed in Oakland, six killed in Seattle, 12 killed in Colorado, seven killed in Wisconsin, six killed in Minneapolis, and three killed in Oregon (a full map is available here). The American people should take the time to mourn the loss of those killed in these senseless acts of violence. But they should also use them as a time for serious introspection into our collective psyche and culture.

Public debate and discussion about the role of guns and gun culture in American society must be a key component of that process. The question that many Americans will be asking is: Why did the shooting occur and how can we prevent another shooting in the future? It is not just that guns are available, it’s also the culture that surrounds them. It’s about the people and the tools, not one or the other. A comprehensive attempt at gun control would better inform Americans about gun safety and the hazards of guns. But how best to do that? I offer one possible solution: the power of federal government intervention through schools.

That’s what worked to change cultural attitudes toward blacks in the second half of the 20th century. In the 1960s, America was undergoing its most contentious transformation of the postwar era. An oft-cited refrain from Southerners then was that culture cannot be legislated. Southerners, in a show of massive resistance, opposed court-mandated school desegregation, arguing that acceptance of blacks would only occur in due time, not through court decisions or federal mandates.

The new Barclays Center arena in Brooklyn opened in late September, garnering cheers from elected officials, most architecture critics and guests who have gone to see Jay-Z, the Rolling Stones and the revamped Brooklyn Nets, relocated from New Jersey and contenders in their NBA division.

However, the story behind the arena, and the larger $4.9 billion Atlantic Yards project, slated to include 16 towers over 22 acres, is darker. In New York, the government has supplied far less direct subsidy than in other jurisdictions — just look to Miami, which paid for more than 80 percent of the Marlins’ new stadium—but the overall deal still shows how the public interest can be clouded when government agencies welcome a new “hometown team” and an ambitious development tethered to a sports facility.

The nine-year battle to build Atlantic Yards is steeped in controversy: over public support via subsidies, tax breaks and low-cost land; over the use of eminent domain to remove recalcitrant residents; over a bypass of local elected officials (given that the project was supervised by an unelected state agency) for Brooklyn’s most expensive real estate project; and over a persistent lack of accountability.

Americans want to see Congress and the president make a deal on the “fiscal cliff,” that noxious mix of expiring tax cuts and mandatory spending slashing due at year’s end. They just don’t think it will happen without a lot of pain, according to recent polls.

But if Washington leaders don’t reach an agreement, which looks more than possible, it will be for a good reason: Incentives are strongest for policymakers to act only after the cliff has come and gone ‑ and wreaked a great deal of havoc in the process.

So far, the fiscal cliff looks like the Y2K of 2012. It’s an eventuality that requires a great deal of preparation and occupies politicians and the chattering classes but which has yet to produce the visible scars of crushed 401(k) statements, widespread layoffs or television graphics about a plunging Dow.