New America Voices

Like generals who are always fighting the last war, California's pundits are still fighting their way out of the last budget crisis. Latest case in point: George Skelton of the Los Angeles Times, who recently complained again that California's income tax "depends too heavily on the wealthy." In Skelton's world, the wealthy are just like those men mothers always warn their daughters about: they'll show you a good time, and then disappear, leaving you heartbroken. "Their incomes rise and fall steeply with the economy," he writes, "and therefore so do state budget deficits."

Except that's not why California has a budget crisis. As the state controller reported on May 9, personal income tax collections for the first nine months of the current budget year are $1.4 billion over the estimate in Gov. Schwarzenegger's January budget and within a whisker of the amount budgeted last summer. Through the first nine months California revenues are up 1.2 percent over a year ago, thanks entirely to the income tax, which has more than made up for the decline in sales tax revenues caused by the housing crash.

 This Sunday we honor the 83 million moms in America on Mother’s Day.  We owe our Moms our lives and our thanks.  Mother’s Day also turns our attention to our children and the need for more focus on them.  Unfortunately, families with children receive a dwindling share for federal expenditures. Scholars Eugene Steuerle and Adam Carasso have found that between 1960 and 2005, federal spending on children declined from 20.1 percent of the domestic budget to just 15.4 percent, while non-child Social Security, Medicare, and Medicaid spending soared from 22.1 percent to 45.9 percent.  This is not good for the development of our future generation.

It is within families that many Americans find the support and love to live their lives with joy.  Many Americans work increasingly hard and it is within families that they experience unconditional love and support in times of trouble.  For couples that do not have children, nuclear and extended families provide critical emotional support.  In a variety of emotional and psychological ways, families enhance the lives of millions of Americans.  And through children, mothers help ensure our future.

Let’s thank our mothers for all they do to make our families what they are.

Let’s let Mother’s Day be a wake-up call for us to invest more in our children.  

Rev. Gray directs the New America Foundation’s Workforce and Family Program. 

As usual, California faces a budget crisis. And just as predictably, Californians are mired in budget confusion.

How big is the crisis? a conscientious citizen might ask. The answer is: As big as you want it to be. Just take your pick. An "$8 billion budget shortfall," reports the San Jose Mercury News. "A $10 billion gap," says the Sacramento Bee. Gov. Arnold Schwarzenegger uses a more technical description: "$20 billion out of whack," he recently said.

This cacophony of numbers and nouns is a big piece of California's budget problem. Not only does California routinely fail to balance its budget, it can't even talk straight about its finances.

In normal accounting and common understanding, a budget is balanced when spending doesn't exceed revenues in a budget year. If revenues are greater than spending, the difference is a surplus; if spending exceeds revenues, the difference is a deficit. Revenues are the proceeds of taxes, fees, and interest on investments.

In testimony before the Senate Finance Committee ten days ago, tax expert Daniel Shaviro described the current taxation situation in the United States as a "perfect storm" for tax reform. He's right, and it's about time. Our last major tax reform came in 1986, when Congress set out to accomplish the most vaunted goal of any tax reform attempt: broadening the tax base while lowering tax rates in an attempt to improve the system yet maintain revenue collection. They broadened the base by eliminating a number of "tax expenditures," loopholes in the tax code that the tax literate jump through to lower their tax burden relative to their less savvy peers.

But since 1986, the number of tax expenditures has slowly crept back up, and now stands at 172 according to the Joint Committee on Taxation. By adding up JCT's revenue loss estimates for all of them, one arrives at a total of $1 trillion a year in forgone revenue (though it is imprecise to add the numbers.) Not only is that an awful lot of money, tax expenditures have many shortcomings--they are distortive, regressive and receive too little oversight.

New America President Steve Coll was a guest on The Daily Show last night to discuss his new book, The Bin Ladens. Video of his clip can be viewed below:

Crude oil hit $110 today and it was an ironic farewell to Milton Copulos, late of the National Defense Council Foundation, who led a campaign to promote the "true" costs of gasoline over the past few years. I spoke with Milt in January and he gave me his latest estimate: We pay an extra $10.07 for every gallon we buy.

First, let me say that I never quite knew whether to trust his numbers -- after all, there really aren't any good numbers for the externalities of gas. But I found his background -- in defense,  the Heritage Foundation, and then alternative fuels -- intriguing, provocative and a good starting place for trying to figure out how much a gallon of gas really costs us. (Milt also offered a heck of an interview, ranging through housing stock in China to military plans to turn garbage into fuel, to his children, his wife, with time for a short primer on flash pyrolosis.)

Here's how he broke it the cost of of a gallon of gas:

Everyone's trying to forecast how Americans will react to oil at $104 a barrel. Yeah, yeah, cutting back on gas use, worried financial markets... But the overall mood is a defiant shrug, typified by the president, who told a renewable energy conference today that Americans have to “get off oil,” right after mentioning that he’d shown up in a motorcade of twenty cars. It’s fair to say that with neither a plan nor collective will to change, Americans will stay in oil’s motorcade.

However, while we’re watching ourselves, another possibly very significant conflict is forming in two of the most important oil-producing countries. After years of rising oil prices and escalating nationalist rhetoric, the poor in Venezuela and Iran are not getting what they were promised -- according to two separate but strikingly similar reports. Their reaction to rising prices, and increasing sense of disenfranchisement and disappointment, may ultimately force Americans out of the motorcade.

In Foreign Affairs, Francisco Rodriguez writes a fascinating and thoughtful article about Chavez’s failure to deliver oil money to the poor, despite years of talking and spending.

Rodriguez writes:

Just as major league ballplayers were taking the field for the first spring training exhibitions on Feb. 28, Arnold Schwarzenegger was putting taxes in play in California's budget debate.

"I am a big believer that when we have a financial crisis like this, we all should chip in," California's governor said about his state's two-year, $16 billion budget shortfall. "This why I totally agree with the Legislative Analyst’s Office when she says we should look at tax loopholes.... We should go after those tax loopholes."

It won't be hard to find them. California is a big-league loophole-creating machine. It takes only a simple majority of California's Legislature to carve out a tax loophole, but it takes a two-thirds vote to close a loophole or pass a budget. That imbalance has created a ratchet effect in California's tax code.

Daniel Day Lewis just won an Oscar for his performance the embodiment of greed in There Will Be Blood. His character, Daniel Plainview, is a ruthless, scheming, tooth sucking, over-the-top wanna-be oil tycoon who kills to turn the dry hills of California into his personal bank account. He is exactly the kind of greedy oil baron Americans have loved to hate since John D. Rockefeller first landed in the Pennsylvania oil fields in the 1860’s. Everyone who sees the movie leaves the theatre convinced that what'’s wrong with us is greed, and oil is a metaphor for that.

I loved this movie (particularly the way it shows crude oil rocketing out of the ground) but I don’t think greed is the problem— -- it’'s the answer.

American voters and politicians buy into the greed and oil myth, but with a twist: We'’re happiest when we’re condemning the greed and taking the oil. Everyone from Pelosi to Huckabee has trotted out the “"G-word"” when discussing high gas prices. (In 2006, Bush coyly referred to “illegal manipulation or cheating.) But I think the tycoon story is pretty much dead. If we’'re going to deal with the current problems of oil— -- high prices, smog, greenhouse gases, geopolitical problems, traffic jams -- we’re going to need to ditch the oil and embrace the greed.

Today, the New America Foundation's U.S.-Cuba Policy Initiative gathered leading Cuba watchers and scholars to discuss the implications of Fidel Castro's announcement that he will not seek nor will he accept the role of Cuban President and Commander-in-Chief. (On Sunday, Feb. 24, the Cuban Council of State is expected to hand power to Fidel's brother, Raul Castro, ending Fidel's 49-year rule with a constitutional succession.)

An MP3 audio recording of this conference call is available below. Participants in the call, which I moderated, included:

• Rep. Jim McGovern
  U.S. Congressman (D-Mass.)
• Col. Lawrence Wilkerson (ret.)
  Co-Chair, U.S.-Cuba Policy Initiative, New America Foundation
  Former chief of staff to secretary of state Colin Powell
• Julia Sweig
  Rockefeller Senior Fellow for Latin America Studies, Council on Foreign Relations
• Peter Kornbluh
  Director, Cuba Documentation Project, National Security Archive
• Sarah Stephens
  Executive Director, Center for Democracy in the Americas
• Jake Colvin
  Director, USA*Engage, National Foreign Trade Council