Casey Schoeneberger, Faith in Public Life’s Press Secretary, came to FPL from NETWORK: A National Catholic Social Justice Lobby’s Associate Program after studying economics at Saint Joseph’s University. She blogs about tax and budget issues on Bold Faith Type.
Last month, the Congressional Budget Office published a report highlighting the dramatic rise in income inequality over the last 30 years. The findings provided a direct rebuttal to conservatives whose response to the concerns of the Occupy movement was to downplay or deny these problems.
In response, Rep. Paul Ryan (R-WI) published his own report attempting to explain how the CBO numbers impact his own economic proposals. Considering the numerous factors that have contributed to inequality in America today, it’s valuable to have a variety of voices calling attention to the (until recently) largely overlooked problem of income inequality. Unfortunately though, Rep. Paul Ryan’s response reaches some very misleading conclusions.
Greg Sargent at the Washington Post interviewed Tim Smeeding, an expert on inequality, about the validity of Ryan’s arguments:
Ryan claims the real problem exacerbating inequality is not income disparity, but the lack of mobility of those at the bottom. Smeeding agrees with Ryan that mobility is key. But Ryan then argues that rather than try to promote equality through redistributive taxation, we should instead “promote upward mobility, increase broadly shared economic growth, and ensure that more and more Americans are able to freely earn their success.
Smeeding, however, rejects this as a false choice. He says we can simultaneously make the tax system more progressive while also pursuing policies that enhance mobility. Indeed, Smeeding argues that those goals are two sides of the same policy coin — they are linked. The goal of raising taxes on the rich isn’t merely to promote equality by redistributing wealth. Rather, it’s about generating more revenue to invest in policies that enhance the mobility Ryan hopes to achieve.
Regrettably, Ryan’s arguments sound more like self-serving exercise than an honest contribution to the debate. As the spotlight on Ryan’s austerity measures has diminished, he seems to be scrambling for a way to insert his tired rhetoric into a changing political debate. It’s telling that the entitlement programs he wanted to essentially eliminate last year are now being blamed for the state of inequality in America.
Tim Noah at The New Republic describes Rep. Ryan’s runaround on entitlements and tax policy:
Ryan says that federal income taxes are more progressive than they used to be, but he doesn’t say that all federal taxes are more progressive than they used to be. He doesn’t because he can’t. When you combine all federal taxes, including the payroll tax (which started out regressive and has become more so), the capital gains tax, the corporate tax, etc., etc., then the federal tax system has become more regressive … just like you thought it had. And that’s before you also factor in the effects of state and local taxes, which also tend to be regressive.
On benefits, I’ll take Ryan at his word that over time Social Security and Medicare have failed to make the totality of government benefits more progressive, because I don’t know whether they have or not. I would merely point out that these programs don’t exist to redistribute income but to provide security to people in old age, when they no longer have jobs and are much more likely to get sick.
By proposing that entitlement programs are to blame for inequality, Ryan essentially lays the fault on the elderly, the sick, and those in poverty. Ignoring the role that tax policy has played creating an increasingly inequitable society is downright deceitful.
Placing the fault on the poor and elderly is nothing new, though. As Nick has tracked, conservatives often deride those in poverty as lazy and dependent on government programs–identifying poverty as a trait of those who simply lack a strong work ethic. In that lens, it is difficult to seriously consider any plan that Paul Ryan puts forward to increase mobility, when he has spent so much time trying to slash or eliminate programs that make mobility possible by improving education, housing, healthcare and nutrition for people who bear the brunt of our economic crisis.
When Rep. Ryan delivers some meaningful and honest policy solutions, he will be welcome to join the conversation on how to genuinely create opportunity and upward mobility for all people. Until then, we’ll keep watching and waiting.
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Laurie Goodstein detailed the Catholic bishops fight over religious liberty this week in the New York Times. Interviewing FPL Senior Writer and Catholic outreach coordinator John Gehring on the bishops’ ongoing struggle for relevance in public policy debates:
Bishop Lori said in his speech, “The services which the Catholic Church and other denominations provide are more crucial than ever, but it is becoming more and more difficult for us to deliver these services in a manner that respects the very faith that impels us to provide them.”
The bishops have also been lobbying the Department of Health and Human Services to expand the religious exemption to the mandate in Mr. Obama’s health care overhaul that requires private insurers to pay for contraception. The exemption, as currently written, would still require Catholic hospitals and universities to cover birth control for most of their employees — which the church says is a violation of its religious freedom.
Some liberal Catholic commentators have criticized the bishops’ priorities, saying they are playing into the culture wars. John Gehring, Catholic outreach coordinator with Faith in Public Life, a liberal religious advocacy group in Washington, said, “The bishops speak in hushed tones when it comes to poverty and economic justice issues, and use a big megaphone when it comes to abortion and religious liberty issues.
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During last week’s CBS/National Journal foreign policy debate, several GOP candidates decried foreign development assistance as nothing more than wasteful spending. Ignoring years of evidence documenting its crucial role in protecting national interests and safeguarding millions of vulnerable people from hunger and disease, Governor Rick Perry said he would zero-out current levels of aid and require countries to “re-apply” for support.
As a response to the impending “supercommitee” deadline (and perhaps the GOP debate), five former Secretaries of State crossed party lines and called for the protection of the foreign aid budget while identifying it as “…the one area where leaders of both parties can find common ground and come together to ensure a better, safer world and a more prosperous future.”
Along with all the former Secretaries of State, Richard E. Stearns, head of World Vision USA, called on all Americans to stand up in support of human need programs around the world. As the head of the largest evangelical aid organization, Stearns asked that Americans and policymakers recognize both the moral value and economic importance that foreign assistance affords:
From The Wall Street Journal:
Americans should understand that foreign aid strengthens democracy. A 2006 report out of Vanderbilt University and the University of Pittsburgh found a direct connection between U.S. aid and increased democratization and good governance, as measured by the Freedom House index. Evangelicals generally support promoting democracy abroad not only because they support the values on which our country was founded, but also because they are strong advocates for the freedom of religion that accompanies democratic values.
Then there are the lives saved. Our aid programs don’t have an unblemished record, and waste and corruption need to be rooted out. But Pepfar, for example, is now providing lifesaving drugs to three million people living with AIDS, mostly in Africa. It also provides care and support to another 2.5 million orphans and vulnerable children. If Congress cuts that program 10%, my organization estimates, 400,000 people will lose their medicine and potentially lose their lives.
Hopefully the majority of evangelicals who believe the foreign assistance budget is too generous and should be cut will pay attention to Stearns argument. More importantly, it’s crucial that budget-crafting policymakers take heed before it is too late.
Photo: Richard Stearns
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One of the most damaging myths about free-market capitalism is the unfounded belief that unregulated markets will naturally lead to socially beneficial results. According to the theory, if corporations engage in harmful policies, shareholders will hold them accountable and so there is no need for regulation to help ensure corporations are behaving in ways that benefit the broader society.
But this ideal quickly falls apart in practice. For one, most people (whose investments take the form of employee-sponsored retirement accounts or mutual funds) have no idea what companies they even own stock in. They just give their money to investment companies who make the decisions and report back on the rate of return of the entire portfolio.
The result is that, in practice, shareholders are only likely to challenge companies when earnings statements aren’t high enough–only further encouraging them to put social responsibility on the backburner when it conflicts with greater profits.
Trying to expose and rectify this structural problem, Sister Nora Nash of the Sisters of St. Francis of Philadelphia and the Interfaith Center on Corporate Responsibility have long been vital to efforts intended to pressure executives to do more of “God’s work” and curb corporate excess and greed. The New York Times profiles them this week:
Long before Occupy Wall Street, the Sisters of St. Francis were quietly staging an occupation of their own. In recent years, this Roman Catholic order of 540 or so nuns has become one of the most surprising groups of corporate activists around.
The nuns have gone toe-to-toe with Kroger, the grocery store chain, over farm worker rights; with McDonald’s, over childhood obesity; and with Wells Fargo, over lending practices. They have tried, with mixed success, to exert some moral suasion over Fortune 500 executives, a group not always known for its piety.
“We want social returns, as well as financial ones,” Sister Nora said, strolling through the garden behind Our Lady of Angels, the convent here where she has worked for more than half a century. She paused in front of a statue of Our Lady of Lourdes. “When you look at the major financial institutions, you have to realize there is greed involved.”
Under ICCR’s watch, executives from Goldman Sachs to Wal-Mart and McDonalds have been rightly rebuked for ignoring the common good in pursuit of profit. People of faith have long been calling for a triple bottom line (environmental, social and financial concerns), and it is without question that women religious like Sister Nora Nash led the way.
Photo credit: Sisters of St. Francis of Philadelphia
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The 2011 American Values Survey from Public Religion Research Institute (which we’ve already blogged about some this week) provides some interesting insight into Americans’ religious and political beliefs. The polling clearly shows that people are in search of answers on how to address America’s growing wealth inequality. Elected officials should take note that Americans are not fooled by claims that decreased taxes and increased profits for the richest 1% of the country will lead to jobs and prosperity for everyone else.
A strong majority (60%) of Americans agree that the country would be better off if the distribution of wealth was more equal, while 39% disagree.
Strong majorities of Democrats (78%) and Independents (60%) agree that the country would be better off if the wealth was more evenly divided. In stark contrast, more than 6-in-10 (63%) Republicans and Americans who identify with the Tea Party movement (62%) disagree.
Majorities of every major religious group and religiously unaffiliated Americans agree that the country would be better off if the distribution of wealth was more equal.
Nearly 7-in-10 (69%) Millennials agree that the U.S. would be better off if there was a more equal distribution of wealth. Among seniors, less than half (46%) agree.
Not only are Americans tired of the current system and lack of opportunity, but it appears they are ready to support concrete policy solution that decreases economic disparity:
Seven-in-ten (70%) Americans favor “the Buffett rule,” a proposal to increase the tax rate on Americans earning more than $1 million per year, compared to only 27% who oppose it.
While solid majorities of Democrats (85%) and Independents (70%) support increasing the tax rate on Americans earning more than $1 million a year, just over half of Republicans (52%) and only 4-in-10 Tea Party members favor it.
Less than half (43%) of Americans who most trust Fox News favor increasing the tax rate for Americans making more than $1 million a year (55% oppose it). In contrast, approximately 8-in-10 Americans who most trust any other media outlet favor such an increase (82% for broadcast news, 76% for CNN, 81% for MSNBC, and 84% for public television).
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