Monday, September 19, 2011

Here Is Class Warfare

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So apparently, the phrase of the week from Republicans is "Class Warfare!" as a response to President Obama's proposal for a new Millionaire's Minimum Tax. Paul Ryan and Lindsey Graham both used the phrase yesterday on the Bobble head shows. The proposed tax has also become known as the "Buffett Tax" in honor of billionaire investor Warren Buffett who has long noted the irony of his paying a lower tax rate for his investments (aka Unearned Income) than the rate paid by his secretary (Earned Income). Of course, the folks at Forbes Magazine and the Murdoch NY Post think it is a bad idea to do such a thing.

The reality is, and Buffett noted years ago, we are in a class war:

“There’s class warfare, all right,” Mr. Buffett said, “but it’s my class, the rich class, that’s making war, and we’re winning.”
Today as I was surfing through the various news sites, I saw a real example of the class warfare in action, although in a more subtle fashion than the whining about possible taxes on millionaires. It was this article from the NY Times on possible cuts to military retirement benefits.
Military pensions and health care for active and retired troops now cost the government about $100 billion a year, representing an expanding portion of both the Pentagon budget — about $700 billion a year, including war costs — and the national debt, which together finance the programs.


“We’ve got to put everything on the table,” Defense Secretary Leon E. Panetta said recently on PBS, acknowledging that he was looking at proposals to rein in pension costs.
One way to decrease those healthcare costs might be to end the occupations of Irak and Afghanistan and all the other adventurism around the world. Traumatic Brain Injury tends to have a significant increase to costs as does dealing with the need for prosthetic devices and rehab services.
Advocates of revamping the systems argue that they are not just fiscally untenable but also unfair.
The unfairness lies in ordering our troops into multiple tours in combat zones then expecting the individuals to pay for their own treatment. Military service is not a business. Soldiers, Sailors, Airmen, and Marines are not generic employees. They are asked to make significant sacrifices for their service that goes beyond overtime pay or anything else asked of people in civilian businesses.
Those critics also argue that under the current rules, 83 percent of former service members receive no pension payments at all — because only veterans with 20 years of service are eligible. Those with 5 or even 15 years are not, even if they did multiple combat tours. Such a structure would be illegal in the private sector, and a company that tried it could be penalized, experts say.
Of course, if someone is injured during one of those multiple combat tours, the system is supposed to provide them tax free pension under the Veterans Administration (assuming the system is working is it is supposed to work - which unfortunately does not always happen).
By far the most contentious proposal circulating in Washington is from a Pentagon advisory panel, the Defense Business Board. It would make the military pension system, a defined benefit plan, more like a 401(k) plan under which the Pentagon would make contributions to a service member’s individual account; contributions by the troops themselves would be optional. Mr. Panetta has said that if adopted, the plan would not apply to current military personnel.
Oh right, just what we need. We've already seen the fallacy of the 401K in the private sector with folks not able to retire due to losing their entire 401K to the Wall St. casino. Now, lets give the military retirement system to the casino operators. Yeah, that will work wonders I'm sure and all the military retirees will become Millionaires subject to the Buffett Tax, right?
Deficit hawks, led by Senator Tom Coburn, Republican of Oklahoma, have begun taking smaller steps, pushing for an array of cuts to military benefits, including ending subsidies for base commissaries and tightening disability compensation for diseases linked to Agent Orange.
Oh yeah, let's make the cost of groceries more expensive when there are already junior enlisted people collecting food stamps.

As many folks are no doubt aware, I grew up in a small town (hence the blog name of course). In small towns all over the country and in many cities as well, there have always been three major economic paths helping folks from lower incomes to progress to higher incomes; military service, the US Postal Service, and other government employment at all levels. The salaries, while not always great, allowed folks to live and the benefits, including the retirements, made up for the lower salaries. Now, we are seeing the attacks on the Postal Service (as documented by emptywheel). We've seen the attacks on government employees at all levels as if they are not real workers working real jobs but some type of imaginary work that has no impact on the economy. These attacks have come about because the private sector has been spending decades destroying the salaries and pensions of workers and seemingly the only folks with decent pay and benefits remaining are government workers.

It IS class warfare and Warren Buffett is correct, his class is winning and the country as a whole is losing.

And because I can:

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