By splitting working America along these lines, Republicans hope to
deflect attention from the big story. That's the increasing share of
total income and wealth going to the richest 1 percent while the jobs
and wages of everyone else languish.
Republicans would rather no one notice their campaign to generate
further tax cuts for the rich -- making the Bush tax cuts permanent,
further reducing the estate tax, and allowing the wealthy to shift ever
more of their income into capital gains taxed at 15 percent.
The strategy has three parts.
The battle over the federal budget.
The first is being played out in the budget battle in Washington. As
they raise the alarm over deficit spending and simultaneously squeeze
popular middle-class programs, Republicans want the majority of the
American public to view it all as a giant zero-sum game among average
Americans that some will have to lose.
The President has already fallen into the trap by calling for budget
cuts in programs the poor and working class depend on -- assistance with
home heating, community services, college loans, and the like.
In the coming showdown over Medicare and Social Security, House
budget chair Paul Ryan will push a voucher system for Medicare and a
partly-privatized plan for Social Security -- both designed to attract
younger middle-class voters.
The assault on public employees
The second part of the Republican strategy is being played out on the
state level where public employees are being blamed for state budget
crises brought on by plummeting revenues. Republicans view this as an
opportunity to gut public employee unions, starting with teachers.
Wisconsin's Republican governor Scott Walker and his GOP legislature
are seeking to end almost all union rights for teachers. Ohio's
Republican governor John Kasich is pushing a similar plan in Ohio
through a Republican-dominated legislature. New Jersey's Republican
governor Chris Christie is attempting the same, telling a conservative
conference Wednesday, "I'm attacking the leadership of the union because
they're greedy, and they're selfish and they're self-interested."
As I've noted, this demonizing of public employees is premised on
false data. Public employees don't earn more than private-sector workers
when you take account of their education. To the contrary, over the
last 15 years the pay of public-sector workers, including teachers,
has dropped relative to private-sector employees with the same level of
education -- even if you include health and retirement benefits.
Moreover, most public employees don't have generous pensions. After a
career with annual pay averaging less than $45,000, the typical
newly-retired public employee receives a pension of $19,000 a year.
Bargaining rights for public employees haven't caused state deficits
to explode. Some states that deny their employees bargaining rights,
such as Nevada, North Carolina, and Arizona, are running big deficits of
over 30-percent of spending. Many states that give employees bargaining
rights -- Massachusetts, New Mexico, and Montana -- have small deficits
of less than 10 percent.
Republicans would rather go after teachers and other public employees
than have us look at the pay of Wall Street traders, private-equity
managers, and heads of hedge funds -- many of whom wouldn't have their
jobs today were it not for the giant taxpayer-supported bailout.
Last year, America's top 13 hedge-fund managers earned an
average of $1-billion each. One of them took home $5-billion. Much of
their income is taxed as capital gains -- at 15 percent -- due to a tax
loophole that Republican members of Congress have steadfastly guarded.
If the earnings of those 13 hedge-fund managers were taxed as
ordinary income, the revenues generated would pay the salaries and
benefits of over 5-million teachers. Who is more valuable to our society
-- 13 hedge-fund managers or 5-million teachers? Let's make the
question even simpler. Who is more valuable: One hedge fund manager or
The Distortion of the Constitution