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GE hit on “tax dodging,” Durbin on budget cuts

A dozen community and faith groups will protest “tax dodging” by General Electric and call on Senator Dick Durbin to lead the charge for corporate tax reform to fund social programs in related actions tomorrow.

Protestors will deliver a giant “cease and desist” letter calling on GE to “stop dodging taxes while lobbying for cuts to Social Security” at GE’s Chicago headquarters, 500 W. Monroe, at 12 noon on Thursday, August 22.  They will demonstrate outside Durbin’s office at 230 S. Dearborn at 12:40 p.m.

It’s part of a national week of action “outing” corporate tax dodgers across the country by Chicago-based National Peoples Action.

Tax-free profits

From 2002 to 2012, GE paid $2.1 billion in federal income taxes while earning $88 billion in profits — a tax rate of 2.4 percent, far below the official rate of 35 percent — according to Americans for Tax Fairness.

In four of those years GE reported $22.5 billion in profits but paid no taxes — and received $4.8 billion in tax rebates, according to the group.

One way it accomplished this was by investing U.S. profits overseas, according to Huffington Post.

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Here we go again

The Donors Forum is warning of “an immediate series of drastic cuts to community services,” along with the loss of thousands of jobs in Illinois, unless Congress acts this week to head off spending reductions contained in sequestration.

While sequestration is “framed as an impersonal budget deficit fix for the future,” the reality is “these cuts will damage people now,” said Delia Coleman, public policy director of the group, in an e-mail.

Sequestration would mean $33.4 million less for primary and secondary education in Illinois, $24.7 million less for children with disabilities, and millions of dollars in cuts to pollution prevention, health and human services, public safety and domestic violence programs.

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The situation results from the political and economic miscalculations of President Obama, beginning with his embrace of deficit reduction as a priority in his first term, writes Robert Kuttner in American Prospect.

At stake, he writes, are the economic recovery and the success of Obama’s presidency.

“The automated reductions of the sequester are only the prologue to a decade-long drama, in which the economy faces one budget squeeze after another, all but guaranteeing a prolonged slump. Unless Congress repudiates the 2011 Budget Control Act, and President Obama blows up the entire paradigm that produced it, a fragile recovery will be the victim of budgetary masochism.”

Currently Obama is offering Republicans a “grand bargain,” in which he would trade $130 billion in cuts to Social Security benefits in exchange for tax increases on the wealthy.

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‘Durbinville’ dramatizes safety net cuts

Local protestors will erect a “Durbinville” shantytown at the Federal Plaza at noon on Thursday, continuing their challenge to Senator Richard Durbin’s embrace of the austerity agenda that’s dominating budget talks in Washington.

Since Monday, a coalition of grassroots groups has been staging a soupline outside Durbin’s downtown office “to make visible the hunger and suffering that budget cuts will create,” according to a statement from IIRON.

All kinds of people are accepting the homemade soup being offered, and many are expressing surprise when they learn that Durbin is backing drastic safety net cuts, said Kristi Sanford of Northside POWER.

The long-term spending reductions Durbin is calling for — outlined in the Simpson-Bowles commission report he backed in 2010 – would be no better than the cuts required by “sequestration” if Congress fails to come up with a budget deal by the end of the year, Sanford said.

“They would push us back into recession, and we’d have more lost jobs and suffering,” she said.  “It would cut education, food security, a whole range of government services we rely on.”

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Fiscal cliff notes

Nineteen protestors demanding Senator Richard Durbin oppose cuts to Social Security and other social programs as part of any deficit deal were arrested on Friday in his office and the lobby of the Federal Building, Kari Lydersen reports at In These Times.  (See our previous post for more.)

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The so-called “grand bargain” is a “grand swindle” which ignores the “victory for middle-class populism” that last week’s election represents, according to Roger Hickey of the Campaign for America’s Future.

“Within hours of the election, the austerity posse was fear-mongering around the so-called ‘fiscal cliff’ and pressuring Washington to accept a ‘grand bargain’ before the end of the year that would slash Social Security, Medicare and Medicaid – and plunge us into a double-dip recession.”

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Durbin and other deficit hawks “are hoping that the hype around the budget standoff (aka ‘fiscal cliff’) can be used for a grand bargain that eviscerates the country’s two most important social programs, Social Security and Medicare,” writes Dean Baker of the Center for Economic and Policy Research, noting that “they made a point of keeping this plan out of election year politics.”

But they must act quickly, he points out – because “one of the pillars of their deficit horror story could be collapsing.

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Challenge to Durbin: Don’t cut Social Security

Dozens of clergy members will carry a golden calf symbolizing the idols of wealth and greed to Senator Richard Durbin’s office on Thursday, as a coalition of community groups demands that Durbin defend social programs – including Social Security and Medicare – in any post-election budget showdown.

So far Durbin has refused to sign a pledge – backed by Majority Leader Harry Reid and 28 other senators – promising to oppose cuts to Social Security, Medicare, and Medicaid.

“Durbin is missing in action on this issue,” said Jacob Swenson of the Make Wall Street Pay coalition. The Illinois senator is assistant majority leader and the Obama administration’s closest ally in the Senate.

Led by the clerical procession, members of the coalition will march from the Chicago Temple, 77 W. Washington, to Durbin’s office in the Federal Building, 230 S. Dearborn, at 10 a.m. on Thursday, November 8.

On Friday at 3 p.m., hundreds of clergy, students and others will rally at Pritzker Park, Van Buren and State, calling on Durbin to stand tough in budget negotiations.

Hardball

Following the failure of Durbin’s “Gang of Six” to reach a budget compromise in the summer of 2011, Congress passed a measure establishing a supercommittee to breach the impasse, with the threat of $1.2 trillion in automatic “sequester” cuts to military and domestic spending if they failed.  They failed, and the deadline to act under that measure looms.

Congress could just repeal sequestration and start over, Swenson said.  The current impasse revolves around Democrats’ insistence on a mix of tax revenue and budget cuts to address the deficit, while Republicans oppose any tax increases whatsoever.

President Obama has to check his propensity for preemptive compromise and “play hardball,” said Swenson.  Specifically, he said, Democrats can win if they are willing to allow the Bush tax cuts – all of them – to expire.

“We’d like to keep them in place for people earning under $250,000, but if you’re not willing to let them expire, you don’t have political leverage,” he said.  “The Democrats haven’t taken the strong bargaining position they need to take.”

Durbin: raise retirement age

Obama has backed the recommendations of the Simpson-Bowles commission, which Durbin supported, including raising the retirement age to 69 and reducing cost of living adjustments for Social Security; the plan would also lower the tax rate on top incomes.

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Rally for ‘Jobs Not Cuts’

A new coalition challenging the federal government’s budget priorities will hold a town hall meeting with three members of Congress Thursday night, then adjourn to join Occupy Chicago outside the Bank of America at LaSalle and Jackson.

The town hall takes place at 6 p.m. on Thursday, October 20 at the Chicago Temple, 77 W. Washington, with a press conference at 5:30 p.m.

Move The Money Chicago, which includes scores of community, peace, and labor groups, calls for a massive jobs program funded by taxing the rich and ending overseas wars.

U.S. Reps. Danny Davis, Jesse Jackson Jr., and Jan Schakowsky will speak at the meeting, along with local residents spelling out concerns – a public school teacher, a victim of foreclosure, an unemployed worker, and others, said Terry Davis of MTM Chicago.

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Budget deal eliminates housing counseling program

[UPDATED]  Housing advocates reacted with shock to the revelation yesterday that funding for HUD-approved housing counseling agencies was completely eliminated in last Friday’s deal on the federal 2011 budget.

A range of housing programs face significant reductions – but the $88 million housing counseling program is one of the only ones being zeroed out entirely, said Bob Palmer of Housing Action Illinois.

The deal would eliminate a basic source of funding for the nonprofit agencies which assist troubled homeowners – in the midst of a continuing foreclosure crisis of historic proportions.  A vote is expected in Congress this week.

“It’s completely misguided in the face of the foreclosure crisis,” Palmer said.  “It looks like partisan politics has trumped making good funding decisions.”

Agencies will close, foreclosures will rise

He said agencies he’s heard from today uniformly say they would have to lay off staff and reduce services – and a number of agencies say they would be forced to close.

The elimination of funding will certainly mean an increase in foreclosures which could have been prevented, he said.

Studies have shown that homeowners facing foreclosure with assistance from housing counselors are far more likely to work out a settlement where they keep their homes.

[Woodstock Institute “strongly opposes zeroing out funds for HUD-funded housing counseling assistance,” said Tom Feltner in a statement.  Feltner noted research by Woodstock and Housing Action that found gaps in counseling resources in areas of the Chicago region facing notable increases in foreclosures.  He said agencies “will likely have to close their doors or sharply decrease their operations in the absence of HUD funding.”

“At a time when foreclosures continue to rise and communities are devastated by vacant homes, family instability and loss of home equity, we simply can’t afford to cut funds for housing counselors working on the front lines to keep families in their homes whever possible and create educated, responsible homeowners,” Feltner said.]

At the Rogers Park Community Development Corporation, the funding loss would mean a loss of staff positions at a time when other sources of funding are tight, said Heather Hain.

“It could be pretty devastating,” she said.

Another major source of funding for RPCDC comes from federal community development block grants administered by the city – and that program would be cut by $640 million under the budget deal.

Hundreds of cases

Like many such agencies, RPCDC has traditionally focused on homebuyer counseling, but in the past three years has seen its caseload shift dramatically to foreclosure prevention counseling.

The agency has been taking on hundreds of foreclosure cases each year since about 2009, Hain said, and each case can take two years to be settled – with each client requiring considerable individual attention.

“These cases are not neat and tidy,” she said.  “People are losing jobs.  And a lot of it has to do with banks not being responsive.”

Another potential source of funding for foreclosure prevention is under consideration in Springfield.  HB 1810 would assess a $500 fee for a foreclosure sale, with funds supporting housing counseling, borrower outreach, free legal assistance and court-based mediation.

It would also give an incentive to banks to work out troubled mortgages rather than foreclosing on them.

The bill has passed the House housing committee but faces significant opposition from the financial industry, Palmer said.

Bank of America: ‘pay your taxes’

Community activists will deliver a message to Bank of America today, and another one to Senator Mark Kirk.

Members of ten community groups, under the umbrellas of the Chicago Housing Initiative and the Illinois Indiana Regional Organizing Network, will march on Bank of America (135 S. LaSalle) at 4 p.m. today demanding that they stop evading taxes.

Then they’ll head to Kirk’s office (230 S. Dearborn) to call on him to stand against cuts to services for low-income families until major corporations pay their share of taxes.

Chicago Housing Initiative maintains that Bank of America evaded a $3.8 billion tax bill this year using “accounting tricks and offshore tax havens” – reducing the bank’s stated earnings and actually netting it a $666 million tax rebate.

“That $3.8 billion in lost revenue could single-handedly prevent all the cuts to Head Start, LIHEAP, community health centers, and housing for the elderly, people with disabilities, and homeless veterans under consideration in the Senate currently,” according to the group.

“Our message to Kirk is that until big banks and corporations start paying their share of taxes, cuts to services for low-income families shouldn’t be on the table,” said organizer Leah Levinger.  “It’s inhumane – and it doesn’t do anything significant to shore up the budget.”



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