Lachlan Markay
October 26, 2011 at 9:47 am
Protesters set up camp in New York City more than a month ago and have spread to other cities around the country, prompting many Americans to ask: What exactly do they want? The decentralized nature of the protests makes official demands difficult to come by, but the movement has released a number of positions that are fairly representative of the left-wing, anti-capitalist tenor of the protests.
We decided to examine one such list of demands, and to give readers a sense of the conservative approach on the varied goals of the movement. To that end, we have gathered together a roundup of reactions from a number of Heritage experts on the demands put forth in one document, created by a collection of New York City protesters calling themselves “the Working Group on the 99% Declaration.”
Readers should approach this post not as a response to a concrete political platform, but rather as part of a dialogue between the largely left-wing individuals “occupying” cities nationwide, and the conservative movement — which, polls show, actually does represent a plurality of politically interested Americans (though we hesitate to ascribe those views to 99% of the country, as OWS is wont to do).
1. Complete bans on federal political contributions, replaced by public campaign financing.
2. Reversal of the “Citizens United v. FEC” Supreme Court decision.
3. Combating Washington’s “revolving door.”
4. Bans on gifts to federal officials.
5. Tax reform – eliminating special carve-outs and increasing progressiveness.
6. Single-payer health care.
7. Increased environmental regulation.
8. Reduction of the national debt through a progressive income tax and elimination of corporate handouts.
9. Federal job-training programs.
10. Student loan debt forgiveness.
11. Immigration policy, including amnesty for illegals.
12. Recalling the U.S. military globally.
13. Education mandates and teacher pay.
14. Massive expansion of public works projects.
15. Spurring China to end currency manipulation.
16. Reenactment of the Glass-Steagall Act.
17. Refinance all underwater mortgages at 1% interest rate.
18. One-year freeze on all foreclosures.
19. Free air time for all political candidates who gather sufficient signatures.
20. Immediate withdrawal of all troops from Iraq and Afghanistan.
1. Implementing an immediate ban on all private contributions of money and gifts, to all politicians in federal office, from Individuals, Corporations, Political Action Committees, Super Political Action Committees, Lobbyists, Unions and all other private sources of money to be replaced by the fair and equal public financing of all federal political campaigns. We categorically REJECT the concept that money is equal to free speech because if that were so, then only the wealthiest would have a voice. These actions must be taken because it has become clear that politicians in the United States cannot regulate themselves and have become the exclusive representatives of corporations, unions and the very wealthy who spend vast sums of money on political campaigns to influence the candidates’ decisions and ensure their reelection year after year.
Hans Von Spakovsky, Senior Legal Fellow at the Civil Justice Reform Initiative:
All of these demands show a woeful ignorance and virtual contempt for rights protected by the Bill of Rights. The First Amendment provides that Congress shall make no law “abridging the freedom of speech” or “the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” That includes the ability to not only speak out on political issues and the merits of candidates for public office, but to spend money on persuading others about the merits of those candidates or helping them get elected through campaign contributions.
Americans have the right to associate with others who share their beliefs, and thus freedom of speech is not limited to just individuals, but also to the many other forms in which American associate from unions to corporations to organizations like the NAACP, the Sierra Club, or the National Rifle Association. These proposals are unconstitutional attempts to limit the ability of Americans to associate with others or to petition and otherwise lobby the government on many important public policy issues. The OWS protesters are themselves benefiting from the right to associate that they now seek to deny to others.
A public funding program for all candidates for Congress and the Presidency also would violate basic First Amendment associational protections. The high costs of modern congressional and presidential campaigns that are national in scope are such that they could only be funded through taxation. It would be a basic violation of the associational rights of individual Americans for the government to force them through taxation to fund political candidates with whom those American disagree or do not support. The federal government does not have the power to force American citizens to fund the campaigns of political candidates anymore than the government has the power to force them to vote for particular candidates.
The framers of the Constitution were right to protect political and other forms of speech from government censorship, since they understood from history that freedom of speech, as well as the right to associate and the ability to petition the government, are key anchors of liberty. For some reason, the OWS protestors despise these First Amendment rights, wanting to deny them to those with whom they disagree politically. We wonder what other constitutional rights they would try to eliminate as soon as they get rid of the First Amendment.
2. The immediate reversal, even if it requires a Constitutional Amendment, of the outrageous and anti-democratic holding in the “Citizens United” case by the Supreme Court, which equates the payment of money by corporations, wealthy individuals and unions to politicians with free speech. We, the People, demand that institutional bribery and corruption not be deemed protected speech.
Von Spakovsky:
The claim that the Citizens United decision allows payment of “money by corporations” and unions to politicians is patently false. Corporations and unions are prohibited from making campaign contributions to politicians by federal law and that law has not been overturned by the Supreme Court. Citizens United held that the First Amendment prohibits Congress from censoring the political speech of any entity, and that includes independent expenditures that fund political speech. That decision is in the greatest traditions of liberty and free speech, the most fundamental principles upon which this country was founded.
3. Prohibiting all federal public officials and their immediate family members, whether elected or appointed, from EVER being employed by any corporation they regulate while in office and/or holding any stock or shares in any corporation they regulate while in office until a full 5 years after their term is completed.
Brian Darling, Senior Fellow in Government Studies:
This sounds like a common sense solution to the perception that federal employees who have worked in a regulatory capacity for the federal government will then go out and profit by working for a corporation that they regulate. A lifetime ban would clearly be overbroad and a five year ban might also be too much.
The most efficient way to solve this problem is not to put forth employment restrictions on federal employees, but to reduce regulations. The Heritage Foundation report Red Tape Rising documents the massive burden that regulations place in the form of higher prices and limited product choices. “There is no official accounting of total regulatory costs, and estimates vary. Unlike the budgetary accounting of direct tax revenues, Washington does not track the total burdens imposed by its expansive rulemaking. An oft-quoted estimate of $1.75 trillion annually represents nearly twice the amount of individual income taxes collected last year.”
Instead of making more regulations to place on regulators, it would be a better idea to get rid of regulations that are slowing economic growth. It is very unlikely that the advocates of big government within the Occupy Wall Street movement would ever advocate for lowering the regulatory burden on corporations that impacts the average American citizen.
4. A complete lifetime ban on accepting all gifts, services, money, directly or indirectly, to any elected or appointed federal officials or their immediate family members, from any person, corporation, union or other entity that the public official was charged to regulate while in office.
Darling:
Again, the issue should not be addressed with yet more restrictions on the private sector. Instead, the federal government should work to reduce its involvement in private business practices, thereby eliminating the incentive for companies affected by regulations to hire the individuals who designed them.
5. A complete reformation of the United States Tax Code to require ALL citizens to pay a fair share of a progressive, graduated income tax by eliminating loopholes, unfair tax breaks, exemptions and deductions, subsidies (e.g. oil, gas and farm) and ending all other methods of evading taxes. The current system of taxation favors the wealthiest Americans, many of whom, pay fewer taxes to the United States Treasury than citizens who earn much less and pay a much higher percentage of income in taxes to the United States Treasury. We, like Warren Buffet, find this income tax disparity to be fundamentally unjust.
Curtis Dubay, Senior Policy Analyst for tax policy:
Heritage supports a complete overhaul of the tax code. The current system is a drag on the economy because it levies rates that are too high, taxes saving and investment too heavily, and encourages or discourages particular economic activities. An improved code would remedy these problems by eliminating many deductions and credits, lowering marginal tax rates for all taxpayers, and removing entirely taxes on saving and investment.
Although the current tax system is a serious impediment to economic growth, it cannot be said that those individuals and businesses that take advantage of the many credits and deductions in the tax code are evading taxes. Congress put those provisions in the tax code for those individuals and businesses to lower their taxes. There is nothing illegal or untoward about taxpayers using those provisions.
It is laughable that anyone would say the current tax code favors the wealthiest Americans when the top 1 percent of income earners pay 40 percent of all federal income taxes. Warren Buffett can continue saying he pays a higher rate than his secretary all day long but that doesn’t make it true. Mr. Buffett always forgets to mention that before he pays the capital gains tax on his gains from the sale of equities, the businesses that generated those gains paid the highest-in-the-world 35 percent corporate income tax. When properly added to Mr. Buffett’s tax rate it is clear his actual rate is much higher than his employees.
6. Medicare for all American citizens or another single-payer healthcare system, adjusted by a means test (i.e. citizens who can afford it may opt-out and pay their own health insurance or opt-in and pay a means tested premium). The Medicaid program, fraught with corruption and fraud, will be eliminated except for the purpose of providing emergency room care to indigent non-citizens who will not be covered by the single-payer program.
Kathryn Nix, Policy Analyst at the Center for Health Policy Studies:
Before considering the notion of universalizing Medicare, Occupy Wall Street should explain how it would propose the United States finance the current Medicare debt. Today, Medicare has $36.8 trillion in long-term unfunded liabilities—promised benefits to current and future generations of seniors that it cannot pay for. To highlight the sheer size of this fiscal mess, that number is more than twice the size of the current national debt. And we’re just talking about one of many federal programs.
Its massive insolvency is just one of the reasons Medicare is proof that the federal government should not run a single-payer health care system. Its system of central planning through administratively-set price controls and statutory updates to provider payments does not reflect the actual costs providers incur to offer their services and keep their doors open. The consequences include cost-shifting to the privately insured, reduced access to doctors and other providers, and decreased quality in the care seniors receive. Meanwhile, traditional Medicare’s fee for service system has no way to promote value in the health care goods and services seniors use, and consumer insulation from cost contributes to overutilization and unnecessary use of services.
There are better options to save Medicare and expand access to affordable coverage among the nonelderly population. Transitioning Medicare to a premium support plan would allow seniors to purchase a health plan of their choice using a government contribution based on the cost of the plans available and retirement income. This transformation would unleash the power of the free market to improve the value seniors receive for the taxpayer dollars spent on their health benefit. It would encourage beneficiaries to seek out the highest quality for the lowest cost when purchasing a health plan and seeking out health care providers. Tying the government contribution to the cost of the lowest bid would reflect actual market conditions, meanwhile using competition among insurers to better meet demand and drive down costs. Adjusting the federal contribution according to income would ensure that Medicare dollars were directed to those with the most need, and though the wealthiest individuals would no longer receive a taxpayer-subsidized benefit, they would benefit from access to the same regulated marketplace.
For the nonelderly population, the creation of tax credits and additional subsidies for low-income families, alongside other commonsense insurance market reforms, would expand access and encourage Americans to obtain and keep health coverage. The plan would pave the way for the creation of a competitive, consumer-driven health care system where insurance was affordable and portable.
7. New comprehensive regulations to give the Environmental Protection Agency expanded powers to shut down corporations, businesses or any entities that intentionally or recklessly damage the environment and/or criminally prosecute individuals who intentionally damage the environment. We also demand the immediate adoption of the most recent international protocols, including the “Washington Declaration” to cap carbon emissions and implement new and existing programs to transition away from fossil fuels to reusable or carbon neutral sources of power.
Nicolas Loris, Policy Analyst at the Thomas A. Roe Institute for Economic Policy Studies:
Pretending that companies pollute intentionally and recklessly or pretending that we do not have an existing regulatory and judicial system that protects private property rights and prevents against unchecked pollution makes it difficult to take these demands seriously in the first place. Setting aside that, let’s talk about capping carbon dioxide and the push to transition away from fossil fuels. Since 85 percent of America’s energy needs come from carbon-emitting fossil fuels, capping carbon dioxide would be a massive tax on energy consumption that would have negligible impacts on the earth’s temperature. A tax that increases energy prices would disproportionately eat into the income of the poorest American families since lower income families spend a larger percentage of their budget on energy use. In fact, during the cap and trade debate, Roy Innis, President of the Congress of Racial Equality said, “that the civil rights challenge of our time is to stop extreme environmental policies that drive up the cost of energy and disproportionately hurt low income Americans and the working poor.”
How is this demand supposed to help the 99 percent again?
If Occupy Wall Street is sincere in its fight against crony capitalism, it would be arguing for less government intervention into the economy – not more. Where’s the protest signs with regards to the crony capitalistic nature of the Solyndra loan guarantee? I guess Occupy the Department of Energy Loan Guarantee Program doesn’t have the same ring to it.
8. Adoption of an immediate plan to reduce the national debt to a sustainable percentage of GDP by 2020. Reduction of the national debt to be achieved by BOTH a cut in spending to corporations engaged in perpetual war for profit, the “healthcare” industry, the pharmaceutical industry and all other sectors that use the federal budget as their income stream AND a truly progressive income tax code that does not allow the wealthy and corporations to evade taxes through excessive deductions, subsidies and loopholes. We agree that spending cuts are necessary but those cuts must be made to facilitate what is best for the People of the United States of America, not multinational and domestic corporations.
Patrick Knudsen, Grover M. Hermann Senior Fellow in Federal Budgetary Affairs at the Thomas A. Roe Institute for Economic Policy Studies:
Yes, we do need a plan to reduce the national debt, and it should focus on credible reductions in federal spending, using the right kinds of policies – specifically policies that reduce the incentives and drivers of higher spending, and bend down the trajectory of government spending growth. Contrary to the view of some “mainstream” economists and the current administration – who continue to assert that government spending is necessary to prop up the economy, despite the clear failure of this philosophy – spending reductions are the best way to ease the dead-weight burden of spending on the economy. This will help foster conditions conducive to long-term growth.
Likewise, crony capitalism should be eliminated; it distorts market functions and diminishes productivity. Today some of the biggest beneficiaries are the health care industry – largely feeding off the government’s medical entitlement programs – and politically favored “green” industries.
Yes, the tax code should be reformed to eliminate “excessive subsidies, deductions and loopholes”, but also to lower marginal income tax rates – which will promote work, saving, and investment – so that the tax code does not raise more revenue.
9. Passage of a comprehensive job and job-training act like the American Jobs Act to employ our citizens in jobs that are available with specialized training and by putting People to work now by repairing America’s crumbling infrastructure. We also recommend the establishment of an online international job exchange to match employers with skilled workers or employers willing to train workers in 21st century skills.
James Sherk, Senior Policy Analyst in Labor Economics at the Center for Data Analysis:
Public works projects will not reduce unemployment. Government spending does not create new wealth in the economy, it reallocates existing spending. Some workers get jobs on the public works project, at the expense of jobs that do not get created elsewhere in the economy. The government could, after all, pay every unemployed worker in America to excavate the foundations of new buildings—with teaspoons. Existing construction projects would easily need millions of teaspoon-diggers. But this would not boost the economy. Building even more bridges to nowhere will not boost the economy either. Want proof? How well did Obama’s construction spending spree in the stimulus work?
Sadly, government job training programs also do not live up to their hype. Studies show that many federal job training programs do little to help their participants find new jobs. New reports from the Inspector General at the Department of Labor show that Obama has not changed this. Investigations of the new “green job” training initiatives and the youth-oriented Job Corps show that both of them struggle to place workers into new jobs. The government has not learned how to do effective job training. Fortunately, OWS do not have to wait for the government to act. Private sector online job exchanges like Monster.com already match millions of employers with workers every year.
10. Student loan debt relief. Our young People and students are more than $830 billion in debt from education loans alone. Payment and interest on these debts should be deferred for periods of unemployment and the principal on these loans reduced using a corporate tax surcharge.
Lindsey Burke, Senior Policy Analyst for Domestic Policy Studies:
Taxpayers who have worked hard to pay off their own student loan debt – and who are still making payments – should not be penalized by having to pay-off the student loan debt of those who irresponsibly took out more of a loan burden than they can handle, to earn a degree of questionable value. Raising taxes to pay down the principal on loans that students took out on their own volition penalizes Americans who paid their way through college by working during school, or who now live a modest lifestyle in order to responsibly make their loan payments. And it also penalizes the three quarters of American workers who chose not to attend college at all. Why should the three quarters of workers who did not to go to college – waitresses, construction workers, mechanics and other average Americans – have to finance the college student who took out $100,000 in student loans to finance a degree in, say, women’s studies?
11. Immediate passage of the Dream Act and comprehensive immigration and border security reform including offering visas, lawful permanent resident status and citizenship to the world’s brightest People to stay and work in our industries and schools after they obtain their education and training in the United States.
James Carafano, Deputy Director of the Kathryn and Shelby Cullom Davis Institute for International Studies and Director of the Douglas and Sarah Allison Center for Foreign Policy Studies:
Encouraging people to break US immigration laws by offering them rewards is not the best way to foster respect for the rule of law and fixing our broken borders.
12. Recalling all military personnel at all non-essential bases and refocusing national defense goals to address threats posed by the geopolitics of the 21st century, including terrorism and limiting the large scale deployment of military forces to instances where Congressional approval has been granted to counter the Military Industrial Complex’s goal of perpetual war for profit.
Carafano:
This is great! In fact, the Pentagon has already done this! The military has no interest in keeping bases that are not essential. Congress funds all military deployments. If they don’t want the military to go somewhere they just don’t have to fund it.
And if we were ever fighting wars for profit, looking at the national debt, we were not doing a very good job.
13. Mandating new educational goals to train the American public to perform jobs in a 21st Century economy, particularly in the areas of technology and green energy, taking into consideration the redundancy caused by technology and the inexpensive cost of labor in China, India and other countries and paying our teachers a competitive salary commensurate with the salaries of employees in the private sector with similar skills.
Burke:
Federal mandates on education aren’t going to get us anywhere near the excellence we all desire for American schools. Where are system is great is where it’s decentralized and people have choice. The “Occupy Wall Street” crowd wants teachers to be paid a “competitive salary commensurate with the salaries of employees in the private sector with similar skills.” But public education employees already receive total compensation above what they would otherwise earn in the private sector. If we really wanted to ensure high quality teachers were well-paid, we should push for policies that allow mid-career professionals easier access to the classroom through alternative teacher certification, and we would reward highly effective teachers based on student performance. When you have salaries based on performance, as is the case in most every other sector in America, and you can reward people for excellence, you attract high quality teachers into the classroom and can keep the best and the brightest in America’s schools.
14. Subject to the elimination of corporate tax loopholes and exploited exemptions and deductions stated above, offering tax incentives to businesses to remain in the United States and hire its citizens rather than outsource jobs and reconstruct the manufacturing capacity of the United States. In conjunction with a new jobs act, reinstitution of the Works Progress Administration and Civilian Conservation Corps or a similar emergency governmental agency tasked with creating new public works projects to provide jobs to the 46 million People living in poverty, the 9.1% unemployed and 10% underemployed.
J.D. Foster, Norman B. Ture Senior Fellow in the Economics of Fiscal Policy at the Thomas A. Roe Institute for Economic Policy Studies:
These demands demonstrate an encouraging focus on the real problem in tax policy combined with an unfortunate failure to understand the solution. The authors suggest the elimination of corporate tax loopholes, which is all to the good if they could properly define these corporate tax loopholes, and then suggest the creation of a new slate of corporate tax loopholes for what may or may not be other purposes.
The apparent intentions of the occupy tax reforms to improve the economy and increase jobs and wages at home are precisely correct. The tax system is an unaffordable and systemic source of serious economic weakness. However, correcting this problem and reversing this weakness does not involve replacing one set of tax loopholes with another, but rather eliminating all loopholes as measured against a rigorous economic standard, and lowering tax rates for businesses and individuals alike. Doing so will naturally encourage businesses to come to and remain in the United States, to hire, to “reconstruct the manufacturing capacity of the United States”.
In contrast, nothing good can be said of the secondary suggestion to create yet another jobs program. These programs do not create jobs, on net, because government cannot create purchasing power on net by first subtracting funds from the private sector by borrowing to re-inject those funds by spending.
15. Implementing of immediate legislation to encourage China and our other trading partners to end currency manipulation and reduce the trade deficit.
Derek Scissors, Research Fellow at the Asian Studies Center:
From 2005 to 2008, China’s currency rose 20% against the dollar, as many in Congress wanted, and the bilateral trade deficit rose more than 30%. In 2009, the yuan did not budget against the dollar and the bilateral trade deficit fell more than 15%. China’s currency policy has little to do with the trade deficit.
What does? First, the strength of American demand. A growing economy 2005-2008 drove the bilateral trade deficit higher; a shrinking economy in 2009 brought it lower. There are also a series of Chinese actions that are more important and more harmful than their currency policy. The OWS protesters are falling for a political con game.
16. Immediate reenactment of the Glass-Steagall Act and increased regulation of Wall Street and the financial industry by the SEC, FINRA and the other financial regulators, and the commencement of a Justice Department criminal investigations into the Securities and Banking industries practices that led to the collapse of markets, $700 billion bail-out, and financial firm failures in 2007-2008.
James Gattuso, Senior Research Fellow in Regulatory Policy at the Thomas A. Roe Institute for Economic Policy Studies:
This call for regulation has a bit of Rip Van Winkle about it. Where have the authors been the last two years? The Dodd-Frank Act enacted last year increased regulation of the financial industry across the board. But it hardly has had the effect the authors of the manifesto want. In many cases, the new rules have hurt, not helped, consumers – such as the misguided price controls on debit card charges that stores pay to banks that have shifted costs directly to consumers. Nor has the law ended the prospect of future bailouts. In many ways, it has institutionalized “too big to fail.” If ending bailouts and irresponsible behavior in the financial world is the goal, the authors would be well-advised to scrap the new rules that have been imposed, and instead focus on establishing better mechanisms, such as improved bankruptcy laws, that allow corporate miscreants to be punished in the marketplace without collateral damage to the economy.
17. Adoption of a plan similar to President Clinton’s proposal to end the mortgage crisis and instead of the Federal Reserve continuing to lower interest rates for loans to banks who are refusing to loan to small businesses and consumers, the Federal Reserve shall buy all underwater or foreclosed mortgages and refinance these debts at 1% or less to be managed by the newly established Consumer Financial Protection Bureau (and foreclosure task force described below) because 1% or less is the interest rate the Federal Reserve loans to the banks directly who hoard the cash rather than loan it to the People and small businesses.
David John, Senior Research Fellow in Retirement Security and Financial
Institutions at the Thomas A. Roe Institute for Economic Policy Studies:
This solution is both logistically impossible and probably would take years to implement. First off, the Federal Reserve is not a commercial bank and the CFPB is not a mortgage servicer. These are complex functions that they don’t have the ability to handle. Second, an unemployed individual who has no income cannot afford to pay a refinanced loan no matter what the interest rate. Third, what home valuation would be refinanced? If it is the original face value, then the Fed would be making a huge profit on a loan that has a value well in excess of the current home value. If it is the current value of the home, then the Fed would be taking a huge loss that would result in taxpayers having to bear the cost of the difference between the original loan and the refinanced loan. Also, loans are made one by one, and would be refinanced the same way. A mass refinancing would take years. Then there is the question of what happens if the mortgage holders refuse to sell the loans to the Fed. They cannot be forced to do so.
18. An immediate one year freeze on all foreclosures to be reviewed by an independent foreclosure task force appointed by Congress and the Executive Branch to (in conjunction with the Consumer Financial Protection Bureau ) determine, on a case by case basis, whether foreclosure proceedings should continue based on the circumstances of each homeowner and propriety of the financial institution’s conduct.
John:
An immediate one-year freeze on foreclosures would hurt homeowners while doing little or nothing for those who are unable to pay their mortgages. It is also much easier to talk about than to actually do. Recovery in housing has been crippled by the overhang of homes that are either in foreclosure or are inevitably going to come onto the market once they are foreclosed. Until these homes are actually available, it will be very difficult for new market prices to be established. Continued delay will just prolong the problem.
For those subject to foreclosure, a moratorium will not change the reality that they are in homes that they cannot – often through no fault of their own – afford. Until they can move on and start to rebuild their credit and savings, they will remain shunned by lenders and facing the eventual disruption of having to move. Delay just prolongs their pain.
Finally, foreclosures are subject to state law, and it is very doubtful that any federal effort to establish a moratorium would have the effect that proponents of a moratorium hope. It is much more likely that such a law would fall in court challenges.
19. Subject to the above ban on all private money and gifts in politics, to enact additional campaign finance reform requiring free air time and public campaign finances to all candidates who obtain sufficient petition signatures and/or votes to participate in the primaries and/or electoral process, to shorten the campaign season and to allow voting on weekends and holidays.
Von Spakovsky:
The government has no right to force television stations and other media outlets to provide free airtime for candidates. This is a clear taking of private property without compensation from owners, shareholders, and employees of those media entities.
20. An immediate withdrawal of all troops from Iraq and Afghanistan and a substantial increase in the amount of funding needed for veteran job placement and the treatment of the physical and emotional injuries sustained by veterans in these wars. Our veterans are committing suicide at an unprecedented rate and we must help now.
Carafano:
It would probably be best to both defend America’s interest and take care of veterans, rather than suggesting Congress chose between its Congressional responsibility of providing for the common defense and taking care of our men and women in uniform, their families and our veterans.
