Jan 29, 2009

Senate Republicans deepen Michigan’s budget problem with irresponsible and politically motivated vote

LANSING -- Senate Republicans played politics with an irresponsible vote to eliminate the surcharge on the Michigan Business Tax (MBT) and deepen the state’s projected budget deficit.

Senate Bill 1 passed 25-11 along party lines on Thursday with four Democrats crossing over to vote for the irresponsible measure. The phased in measure will blow a $166 million hole in the budget in the first year, and more than half a billon dollars by the third year when the phase in is complete. The Republicans offered no plan to make up the revenue, no cuts to make it up and no savings to make it up.

“What has happened to all my fiscal conservative friends on the other side of the aisle," said Sen. Michael Switalski, D-Roseville. “It’s as if the goal of the proponents of this bill to put the budget into a bigger deficit.”

Republicans are sticking to the false claim that the surcharge is costing jobs and causing companies to close. Of course, they could not offer a single example. In just the last couple of days, Starbucks will close another 300 stores in 2009 and slash about 6,700 jobs, Black and Decker will cut 1,200 jobs, Ford Motor Credit said today its cutting 1,200 jobs, Boeing is cutting 10,000 jobs, Pfizer is cutting 19,500 jobs, Caterpillar is cutting its workforce by 20,000, Home Depot said it would slash another 7,000 jobs and I have no idea how many jobs the Big 3 have cut.

How many of those jobs were lost because of the MBT Surcharge? The answer is zero.

This is just a political ploy designed to make Republicans look good to voters. Republicans have a history of doing this so they can tell voters they cut taxes. They pulled a similar trick in the election season in 2006 when they killed the Single Business Tax (SBT) with no replacement in sight.

The good news is the voters saw through it, and gave the Republicans control of the House and more people voted for Democratic Senators; the GOP only kept control of the Senate because of gerrymandering.

This has more to do with the fact that most of the Senate Republican caucus is running for statewide office in 2010. Mike Bishop and Tom George are running for or have been mentioned as running Governor, Bruce Patterson and Bishop are considering runs at Attorney General and Michelle McManus and Cameron Brown are running for Secretary of State; so far.

A bipartisan effort enacted the MBT to replace the SBT in 2007. To avoid a brief government shutdown and erase a huge budget deficit, the Legislature enacted a 6 percent sales tax on certain services in November 2007.

Then a month later on December 1, the Legislature enacted the same MBT surcharge on December 1, 2007 to do away with the service sales tax. The same Senators who voted for it in 2007 are the same ones who killed it today with no replacement. It passed 33-4 in the Senate.

Democrats want to get rid of the surcharge too, and House Speaker Andy Dillon has made abolishing it a priority this session. But not without replacing the revenue.

“Unreasonable haste is the direct road to error, Moliere,” said Sen. Gretchen Whitmer, D-East Lansing. “I wanted to stand up and clear something up. Not one of us thinks we should or cannot afford to do anything.”

The bill now goes to the House Tax Policy Committee.


liberalshateusa said...

Guru, Why are you not telling us what a great stimulus package your Democratic friends passed in the U.S. House.

ka_Dargo_Hussein said...

From the headline I read on the post, it was about Michigan's budget.

Communications guru said...

Well, hate America, for a couple of reasons. I tend to write about Michigan issues because I work there, and the mainstream media does not cover Lansing like it should. There are plenty of reporters and bloggers in Washington, D.C.

A better question would be why do Republicans hate America? You want the President to fail and not a day goes by without news of a company announcing massive layoffs and job cuts and the only solution the GOP has is what helped throw us into this mess; more tax cuts for the rich.

It is a good stimulus package.

bluzie said...

Hey I like the stimulus package that was passed!
I am certain there will be some changes in the Senate's version.
House Republicans are huge obstructionists!
Maybe they haven't come to grips with the financial disaster the Republicans put us in.
Stimulus Now!
We cannot afford to listen to the losers who put us here.

Not Anonymous said...

Two liberals have both said that they like the "stimulus package".

I wonder if either of them can list anything in the bill that would stimulate the economy and tell us how it will stimulate the economy.

Communications guru said...

Everything. Just like Roosevelt’s Public Works of Art Project (PWAP) put people back to work.

Not Anonymous said...

The PWAP began in December 1933 and ended in June 1934. It spent just over $1.3 Million during the six months. Since we didn't come out of the depression era until 1942, so that obviously didn't work. In fact, unemployment was at 19% in 1938 which was four years after the end of the six month expenditure.

You didn't mention even one item in the House bill that passed but instead referred to a temporary plan that was not successful in bringing back the economy in 1933/34. Obviously, you don't know what stimulus is in the bill that has passed the House despite every Republican and 11 Democrats voting against it. Would any of you liberals like to try again to list any parts of the bill that has passed the House that would be considered a stimulus to the economy?

Communications guru said...

So the Great Depression had to end in six months or any effort to correct it and put money in people's pocket was a failure? I don't think so.

Once again, everything in the bill is a stimulus, and that includes money for STD prevention that was, unfortunately, taken out of the American Recovery and Reinvestment Act. Money spent on prevention saves on the cost of treatment.

Who cares if every Republican voted against it? The American people gave Democrats a majority for a reason. They obviously do not want to be part of the solution, and it was your party's polices that got us into this tremendous mess.

Not Anonymous said...

According to the economists, it is not a stimulus bill. There are parts that are a stimulus, but only 10% is applied to 2009. Only 1/3 of the bill is stimulus at all, again, according to economists.

The STD prevention was earmarked only for the CDC. Most of the money was directed to unions which only have 15% of the population. Another large portion (I forget the percentage) is earmarked for ACORN.

This recession was caused by the housing market bubble. That was created by Jimmy Carters policy in 1978 of forcing banks and lending companies to loan money to people that otherwise wouldn't qualify. This was reinforced and expanded in 1995 by the Clinton administration.

Sweetheart deals by Senator Christopher Dodd (currently under investigation for his own personal deal with Countrywide), Barney Frank's dealings with the Fannie Mae and Freddie Mac and Kent Conrad's sweetheart deal all contributed to this. Then there was the bank in California, IndyMac who had a run on their bank and finally ended up closing. Senator Chuck Schumer was accused of causing the run on the bank.

President Bush warned everyone in 2004 that if Congress didn't reign in Fannie and Freddie that this meltdown would happen. Democrats blocked it. Senator John McCain again warned about it in 2005, again it was blocked by Democrats. McCain again warned about it during the campaign, but then when it happened in September, he did the foolhardy thing of joining the Democrats on the bailout on the second ballot after it failed the first time because Republicans wouldn't agree to it.

I have no doubt that you'll continue to blame the Republicans. It's what liberals do. They don't take responsibility for their actions, they just blame the Republicans, rightly or wrongly, then proceed to push for more welfare.

You claim that everything in the bill is a stimulus, yet the experts disagree. Obama says we need an immediate fix, yet most of the supposed "fix" is not taking place until the end of 2010.

Grab your wallets and hold on for dear life. The liberals are coming after everybody's money.

Communications guru said...

According to what economists? The ones at the heritage foundation? Your rant is full of debunked information, but that has never stopped you from using it.

“Most of the money was directed to unions?” What unions? What rightwing site did you get that from? There is no money “earmarked for ACORN. “ There is for neighborhood stabilization. If they want any of that money they have to submit a competitive bid. It’s not like ACORN is Halliburton or Blackwater getting no-bid, multi-million dollar contracts with no oversight.

Jimmy Carter? Give me a break. No law ever directed a loan to someone who did not have the means to pay it back. They had to be able to qualify for a loan just like everyone else. The blame for the crisis lies with deregulation, a lack of oversight and greed.

There is zero proof Christopher Dodd did anything wrong; the same thing with Barney Frank. I’m not sure what Kent Conrad did. You need to kook at people like Mary Bono (R-Calif) and Timothy V. Johnson (R-Ill) who have thousands of dollars invested in Freddy Mac. The failure of IndyMac Bancorp rests with the regulators who were asleep at the wheel, not Senator Chuck Schumer.

The Democrats didn’t block oversight of Fannie May. According to Factcheck.org “The bill made it out of committee in the Senate but was never brought up for consideration. At that time, Republicans had a majority in the Senate and controlled the agenda.”

Liberals certainly do take responsibility for their actions. You are right about one thing: I will continue to blame the Republicans because they deserve it. Then “proceed to push for more welfare?” Give me a break. What a false stereotype. No body is pushing for more welfare.

You mean economists disagree? Oh my God, alert the media. Economics is not a science. Yes, President Obama says we need an immediate fix, and he is providing it.

I was wondering what this all had to do with the MBT surcharge?