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Thursday, December 9, 2010

Mike Doyle on Democratic opposition to tax compromise

Posted By on Thu, Dec 9, 2010 at 4:16 PM

Pittsburgh congressman Mike Doyle is among the House Democrats opposing President Barack Obama's controversial tax-cut compromise with the GOP.

"This has been brewing for quite some time," Doyle says of Democratic opposition. Not only do House Democrats question the terms of the deal, he says, but they feel they deserved a larger role in negotiating them.

"There's been a frustration for House Democrats," says Doyle. "We've really carried this President’s agenda, only to watch it languish in the Senate." That's been true on a slew of progressive causes. But in this case, Doyle says, they had no role in crafting the agenda at all. 

Under the terms of the deal, Obama has agreed to extend tax breaks on the wealthy; in exchange, Republicans have agreed to support an extension in unemployment benefits and other aid for middle-class families.

But "Parts of the package were just too much," Doyle says.

Specifically, Doyle points to the proposal's scaled-down estate tax. Under the compromise, the tax would be levied at a lower rate (35 percent instead of 55 percent) and on a much smaller number of inheritances -- those worth at least $5 million rather than $1 million. Estimates of the impact are hard to come by, but the government could be giving up an estimated $50 billion in revenue. And the benefits of such a tax cut accrue to a very small fraction of wealthy Americans. 

"To spend all that money to benefit 37,000 of the wealthiest estates of America -- some of us just can’t swallow that," Doyle says.

Doyle also thinks the administration could have done a better job even on negotiating its own end of the bargain.

Take the 2 percentage-point cut in the payroll tax, whose proceeds pay for Social Security. That tax cut would generate an estimated $1,000 for the average American, but as it's currently structured, Doyle notes, it would "dribble out" over the course of an entire year, in the form of a tiny $20-per-week reduction in withholding.

"This will be a tax cut no one believes they got," Doyle predicts. And human nature being what it is, "No one will notice the cut, but they'll complain when it expires." That, he frets, will make it easier for Republicans to begin calling for the tax cut to be made permanent -- just as they've been doing with the Bush-era tax cuts Obama has reluctantly agreed to extend. 

Cutting the payroll tax permanently would be a problem for Democrats, because a permanent cut could exacerbate a funding shortfall in Social Security, which has long been in Republican crosshairs. Social Security already faces fiscal challenges that Republicans have been only to happy to trumpet; cutting the payroll tax -- which will cost an estimated $120 billion a year -- will only worsen the problem.

Doyle says that if he had his druthers, the tax break would came as a one-time upfront payment -- perferably early in the year. That would feel more like a sort of bonus, rather than a long-term reduction of the rate. Not only would such a payment have more upfront impact, he surmises, but Republicans would have a harder time trying to make a tax cut permanent, since Americans would see the same amount coming out of their paychecks every month. 

"This is the messaging part of things," Doyle says. "Too often we win these battles but lose the argument." He notes that Obama cut taxes during his first year of office, but because that break was spread out over the course of a year, "I can't tell you how many meetings I've been to and asked 'who got a tax cut?' and nobody raised their hands."

But will Doyle's stand -- and those of his fellow Democrats -- make a difference? 

The initial conventional wisdom was that today's vote doesn't really affect the bill's prospects: The compromise is expected to receive heavy Republican backing, so support from liberal-minded Democrats isn't necessary. Then again, House speaker Nancy Pelosi is citing the vote at the basis for negotiating changes to the compromise:

In the Caucus today, House Democrats supported a resolution to reject the Senate Republican tax provisions as currently written. We will continue discussions with the President and our Democratic and Republican colleagues in the days ahead to improve the proposal before it comes to the House floor for a vote.

"The leadership is on board," Doyle says. "I don’t think anyone in our leadership likes what’s going on. This bill isn’t going to be brought up in its current form."

Of course, the fear is that this is the best deal Democrats can hope to get. In January, control of the House will shift to Republicans as a result of the November elections. And that means Doyle and his colleagues will have even less leverage than they feel like they've had so far.

So what would he tell an unemployed Pennsylvanian whose benefits are set to expire? A Pennsylvanian who thought the compromise at least bought some time, but is now holding his or her breath?

"Well, I'd say that we are the party that is committed to helping the unemployed," Doyle says. "It's our priority, not the Republicans'. And it's why we will end up swallowing some things that are so distasteful to us -- becuase we care so much about working people. But at some point, you have to say, 'Enough.' I've been one of the president's biggest champions in the Pennsylvania delegation. But sometimes, friends have to tell friends, 'This isn't working.'

"I don't think anyone believes we'll get a better deal on January 5 [when the new session of Congress convenes]," Doyle adds. "But this is only Dec. 9. We're not looking to kill the process now and not come back until January. We want to rework this into something we can vote for. 

"We know this battle won't last forever, but Dec. 9 is not the date to surrender. We're going to fight this fight, and get the best deal we can."

ADDED: I should also note that Doyle says his staff has logged roughly 250 calls on the issue. And so far, he says, "95 to 99 percent" of them have been opposed to the compromise.

Friday, December 3, 2010

PNC digs itself out of mining controversy

Posted By on Fri, Dec 3, 2010 at 6:25 PM

Obviously, this past fall has been a tough season for progressive causes. But at least one positive development did take place, though it slipped beneath the radar:

PNC Bank has apparently decided to stop funding mountaintop-removal mining.

As City Paper has noted before, PNC has reputedly been an increasingly important financial backer of the controversal practice, which involves lopping off the tops of mountains, and scooping out the coal beneath. The bulldozed land often ends up being pushed into nearby valleys, increasing the environmental trauma.

PNC has largely declined to comment on the issue, citing the need to protect client privacy. But with little fanfare, PNC released a new corporate responsibility policy this fall. Among its provisions was this assurance: 

PNC will not provide funding to individual [mountaintop removal] projects, nor will PNC provide credit to coal producers whose primary extraction method is MTR. PNC will continue to monitor this industry while various regulatory issues are addressed through legislation and public policy.

The demand for power, jobs and other community impacts associated with coal mining will continue to weigh heavily in PNC’s lending decisions. PNC also recognizes the significant investment coal producers have made in their MTR operations, and acknowledges that these were entered into in good faith and in accordance with all applicable laws and regulations.

Curiously, PNC doesn't appear to be anxious to discuss the matter further, making this one green initiative they aren't boasting about. Hell, they don't even mention the mountaintop ban in their statement of environmental responsibility, which brags about much less impressive initiatives, like using environmentally friendly office supplies. 

The obvious guess here is that PNC is trying to burnish its green credentials without alienating existing clients in the coal industry. (A guess is all this can be, obviously, since PNC won't even identify who its clients are.) As we've reported before, Massey Energy -- a leader in mountaintop removal -- is apparently a PNC customer. And anything PNC does to call attention to its own virtue would risk making Massey, for one, look worse. 

By the way, as I read this policy, I don't see anything that prevents PNC from continuing to offer financing to Massey. As near as I can tell from corporate filings, the vast majority of Massey's coal comes from non-MTR facilities. PNC can continue to work with Massey on those projects without violating its policy, because MTR is not the company's "primary extraction method."

In fact, what makes PNC's move most surprising is that, once the G-20 left Pittsburgh in 2009, there seemed to have been very little public pressure put on the bank to make this change. As I've noted previously, local media coverage of PNC's connections to mountaintop removal has been conspicuously absent. And there has been little in the way of protests here, despite the fact that PNC's headquarters are Downtown. 

That said, the quiet probably wasn't going to last. No one in Pittsburgh was paying attention, but on Sept. 27, environmental activists staged a sit-in at PNC's flagship location in Washington, D.C. And there was talk among local environmentalists about closing out PNC Bank accounts and depositing them elsewhere -- a symbolic move, to be sure, but one that would have put the bank on notice. 

Based on a recent conversation I had with Randy Francisco, who heads the local chapter of the Sierra Club, PNC would have been right to hear footsteps. Originally, Francisco noted, PNC was a far smaller player in MTR financing than institutions like Bank of America or JP Morgan. But one after the other, those banks caved in the face of public protest ... until PNC was the biggest bank still in the game. 

"Each time, [environmentalists] target the biggest bank -- and when it drops off, the target has been the next bank in line," he says. 

PNC has avoided that fate. And it has done so with a most becoming modesty. Then again, as one environmental activist has noted, " As with all bank policies, we’ll understand what PNC's policy really means in practice as we monitor their financial dealings with the coal industry over the coming months."

The handwriting is on the chalkboard with Corbett's education committee

Posted By on Fri, Dec 3, 2010 at 11:58 AM

After being elected as governor last month, Tom Corbett pledged to emulate the model of New Jersey Governor Chris Christie. Judging from roster of his transition teams, Corbett is going to keep that promise -- at least as far as putting the screws to public-school teachers goes.

Christie is waging a running battle with educators in his state, and teachers in Pennsylvania may well end up sitting in the corner too. For while there's plenty to be concerned about with all of these committees -- state Democrats have denounced the heavy representation of natural gas-drillers on the teams, for example -- the makeup of the education team stands out.

For starters, it includes Tea Partier Ana Pugh, who Democrats are denouncing for saying the kind of crazy stuff you expect from Tea Partiers: Liberals are working alongside the terorrists to undermine capitalism, Obama is a socialist, etc. etc.

And a fuller examination of the committee shows up Corbett's claim that he nominated "a wide spectrum of people" to the committees. When it comes to higher education, that may be true: The roster includes representatives from Catholic universities, trade schools and not-for-profit colleges alike. But at the public-school level, I can't find a single person who represents or advocates for school teachers or public school administrators. By contrast, I've found 20 commitee members -- including one of its co-chairs -- who have ties of one sort or another to charter or for-profit schools.

That's more than half the committee. And there may be more ties I'm unaware of: The connections I've outlined below are based either on personal knowledge, or the results of some websearching. So it's not definitive by any means.

Some of those connections are stronger than others: One committee member's only tie (that I'm aware of) is being a partner at a law firm who does legal work for a charter. And it's possible that there might be a committee member whose allegiance to public school teachers has escaped me. But overall, the ties to alternate education are deep and extensive. You've got politicians who've espoused charters and other alternatives to public schools. You've got people who make their living running such programs. And you've got people who spend their days espousing their cause. 

Obviously, Corbett has made no secret of his position on school choice, and elections have consequences and all that stuff. And I guess if you're teaching at a college level, things don't look so bad. But if you're teaching at a public school, well ... the handwriting is on the chalkboard. 

As for the individual committee members, let's see ... 

One of its co-chairs is Pitt chancellor Mark Nordenberg. Which is perhaps no surprise, in September, the Pitt News reported that Corbett apparently had a mysterious meeting with university officials.

The other co-chair is Joel Greenberg, of the Susquehanna International Group. Greenberg and other Susquehanna execs were big funders of a long-shot gubernatorial campaign by state Senator Anthony Hardy Williams. Don't let the fact that Williams was a Democrat fool you; his principal distinguishing characteristic was his willingness to champion alternatives to public schools. 

As for the rest of the committee, we've got:

  • Jim Agras, CEO of Triangle Tech, a for-profit trade school
  • Jeanne Allen of the Center for Education Reform, whose mission entails "boldly advocating for school choice, advancing the charter school movement, and challenging the education establishment"
  • Chris Bravacos of the Bravo Group, a "public advocacy" firm whose clients include the Commonwealth Connections Academy, a cyber charter, and who has other school-choice ties listed below
  • Matt Brouillette of the Commonwealth Foundation, a liberatarian think tank, which advocates for increased alternatives to public education
  • Paul Clymer, a Republican state Representative who is the GOP chair on the House education committee -- and who apparently signed a school choice pledge proffered by Puig's Kitchen Table Patriots
  • Marie Conley Lammando, who has extensive GOP ties and serves on the Pennsylvania State System of Higher Education board of governors.
  • Bill Donahue of the donahue Family Foundation, which focuses its philanthropic efforts on helping kids afford Catholic and private schools
  • Carolyn Dumaresq, a consultant I can't really say much about
  • Dan Fitzpatrick, CEO of Citizens Bank
  • Amy Foerster of the law firm Saul Ewing, whose practice areas include higher education
  • Don Francis, who heads the Association of Independent Colleges & Universities, whose members include numerous state institutions of higher learning
  • Dennis Giorno, who along with Donahue and Bravacos serves on the board of REACH, which backs school choice
  • Vahan Gureghian, who founded Charter School Management Inc., which does administration consulting for charter schools
  • Larry Jones, President of Charter School Association and CEO of the Richard Allen Preparatory charter school
  • Michael Karp, President of University City Housing, which as you might expect provides rental properties to Philly college students
  • Ruth O'Block Grant, a trustee at Seton Hill University
  • Pat O'Connor, who chairs Temple University's Board of Trustees
  • PA State Senator Jeffrey Piccola, a champion of school choice
  • David Pollard, another member of Anthony Hardy Williams supporting cast at Susquehanna International Group
  • Ana Puig, see above
  • Father Ed Quinlan, who as the secretary of education for the Harrisburg Diocese overseas Catholic education programs
  • Cynthia Richey, who directs the Mt. Lebanon Library System
  • Richard Sand, of the law firm Sand & Saidel, which provides legal services to the First Philadelphia Charter School for Literacy
  • Dave Schulik a lawyer and president of Delaware Valley High School, an alternative-education facility
  • Carl Singley of the law firm Ciardi, Ciardi and Astin
  • Karen Stout the president of Montgomery County Community College
  • Bob Taylor, a trustee at Slippery Rock University
  • Paul Taylor, an administrator at St. Vincent's College
  • Ron Tomalis, Director of Dutko Worldwide, a consulting firm that works with "education entrepreneurs"
  • Dennis Tulli, who heads the aforementioned Commonwealth Connections cyber charter
  • State Senator Anthony Williams himself
  • Charles Zogby, the state's Secretary of Education during the Tom Ridge administration, now an exec with K-12 Inc., a for profit online educator
I may refine this list further, but ... you didn't need to ace your civics exam to see what's going on here.


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