Archive for the ‘DC Issues’ Category

The DC Council Thinks You’re Stupid

Specifically, Councillors Jack Evans, Kwame Brown, David Catania, Vincent Gray, Marion Barry, Muriel Bowser and Mary Cheh. These are the sponsors and co-sponsors of the “Global Security and Aerospace Industry Tax Abatement Act of 2010“, a proposed tax giveaway to gigantic war contractor Northrop Grumman. In the midst of a budget crisis, they believe our scarce resources are best used throwing $25 million at a rich, politically-connected corporation? It’s just infuriating that even in an overwhelmingly liberal Democratic city, the politicians here claim the budget shortfall is causing them to make cuts to schools, public transportation, homeless shelters and even failing to provide core emergency services like snow removal, yet have the gall to offer millions in tax breaks to a top defense contractor already bloated on the taxpayer dole. It’s a very telling statement about where the priorities of these elected officials really are.

Here’s some background on the Northrop Grumman corporate welfare bill:

Northrop Grumman Corp. would receive $25 million in incentives to relocate its headquarters to D.C. under a bill introduced Tuesday by the D.C. Council.

The “Global Security and Aerospace Industry Tax Abatement Act of 2010” would provide $19.5 million in real estate tax breaks over 10 years and up to $5.5 million in grants to offset relocation costs the company could incur in its planned move from Los Angeles.

The bill is sponsored by Councilman Jack Evans, D-Ward 2, along with six other of the city’s 13 council members. Evans said the bill “sends a clear message to Northrop Grumman that we are absolutely interested in having them as one of our corporate citizens.”

He said if the city can provide a comparable financial package to the suburbs then he believes D.C. has a chance to land the company because of its proximity to the Capitol, White House and Pentagon.

Yes, that’s probably true. DC does likely have some chance or other to get the company’s HQ within its borders. However, those tax incentives probably wouldn’t be what brings them here. Good Jobs First has spent a great deal of effort chronicling the nefarious impacts of such giveaways (and is a great resource for further research on the subject if you’re interested). As the case of subsidies for foreign auto assembly plants shows us, corporate decisions on where to locate their activities generally are predicated on two major factors: proximity to markets and labor costs (in terms of corporate headquarters, quality of life in the region also makes a difference).

Taxes do matter, but to a much lesser extent than the other considerations. Often, a company has made up its mind where to locate before an announcement is made, then it plays neighboring local jurisdictions against each other to secure a nice chunk of change from the state or locality where they were going to go anyway.

And that extortion money offered by the city, in this case DC? It’s not exactly money the city can afford to spare:

All the subsidies are subject to inclusion in the city’s budget, which would add to hundreds of millions of dollars of budget gaps already expected in the coming years….

The company would also likely qualify for further tax breaks through a 2000 law aimed at luring tech companies. Called NET 2000, the legislation offers to eliminate the city’s 9.98 percent franchise tax for five years and charge a 6 percent rate thereafter.

Well, yeah. Sure sounds like a boondoggle. But…..really, it’d be worth the investment and create tons of new jobs for the city, right?

Fenty has said his administration will do whatever it can to lure Northrop’s headquarters and an expected 100 to 150 new jobs to the area. His deputy mayor for planning and economic development, Valerie Santos, says she was “working very aggressively” to assemble a package for the company that would beat those being offered in Maryland and Virginia.

$25 million – and possibly much more – for just 100-150 jobs going to people who are probably gonna live in Virginia? DEFINITELY a boondoggle. It’s truly amazing that nearly half of the overwhelmingly Democratic city council would consider this to be a prudent measure of their tax dollar priorities.

Thankfully, this all may very well be a moot point here anyway.

Sources on the public and private side of negotiations have said the Meridian Group’s National Gateway in Crystal City is leading the pack of potential sites.

And that’s why I brought up all that stuff about the uselessness of tax incentives in influencing relocation decisions. Chances are, Northrop Grumman has already decided to go to Crystal City, simply because it’s a stone’s throw away from their cash cow in the Pentagon. If they do end up coming to DC, it’s because they’d rather be closer to the White House and Congress. Location location location, baby.

Neither DC nor Virginia should get suckered into thinking it’s about anything other than that.

But just in case, definitely drop the offending Councillors a call or e-mail, especially chief sponsor Jack Evans. Let them know just how much you appreciate their pro-corporate-welfare priorities.

-Jeremy

Advertisements

Metro Funding in the Transportation/HUD Approps Bill

I write today bearing good news for residents of the nation’s capital metro region. The Transportation/HUD appropriations bill (H.R. 3288) was on the floor of the full House today, and it was passed a few hours ago. The final vote ended up at 256-168; 16 R’s voted for it and 10 D’s voted against.

For those who ride the DC Metro system, there is a nice $150 million nugget of emergency maintenance funding for the system in this bill. From the Daily Whip Line summary (via Congress Matters):

Capital and Preventive Maintenance Grants for WMATA: $150 million in new funding for grants to the Washington Metropolitan Area Transportation Authority to address safety deficiencies and to maintain the nation’s subway system.

It is of course badly needed, and somewhat fortuitous that if a horrific Metro accident had to happen, it did so a couple weeks before consideration of the annual transportation appropriations process. This means we may see some more construction delays and single-tracking in the near future, but hopefully it will constitute a crucial step in modernizing Metro infrastructure and helping avoid unsafe conditions.

On behalf of Carrots & Sticks members and DC-area residents in general, I would like to thank local representatives and other leaders for ensuring inclusion of this funding. From what I gather, Steny Hoyer in particular deserves ample credit in fighting for emergency Metro funding.

However, it is unfortunate that such a stark circumstance had to be present for Metro to receive this money. $150 million is a mere drop in the bucket when measured against the system’s full needs to adequately meet its ridership demand in a safe and effective manner. Furthermore, DC’s transit infrastructure is far from unique in its sorry state of disrepair. The continual structural deficit of this and all other light rail systems in the United States requires a sustained, substantial and recurring remedy. The federal government is the only entity capable of providing such stabilizing funding, and has a responsibility to do so.

If we are serious about changing our transportation priorities in America, operations assistance for metropolitan transit agencies must be included as part of a solution.

-Jeremy

UPDATE:

For more background on transit cuts, Ben Adler of the Nation has a very informative piece running down some of the latest developments in the states and in DC.

Also, Transportation for America has a great map that outlines all the operating cuts made recently by local transit agencies around the country:

Read Ryan Avent

To follow up on the last post, read Ryan Avent. Seriously, he’s doing great work writing on Climate Change and smart growth with a focus on the District of Columbia. You’ll be better informed for working him into your reading rotation.

-Chris

Leave D.C. Alone

Like a lot of D.C. residents I’m continually disappointed by the failure of Congress and the government generally to grant us representation in Congress. Democracy is supposed to be a shared value, but when it’s black people that will almost certainly vote for the Democratic party suddenly Democracy is something we hope Iran achieves, but not something for the residents of our Capitol city.

Recently I’m finding that I’m equally annoyed at the willingness of Congress to overrule DC’s right of self determination at a whim. You don’t have to like our current gun control laws, but we know they’re Constitutional so it’s simply indefensible to use Congressional authority to override them. Not only do Republicans routinely mettle in the affairs of the city without any legitimate interest, but pretty much all of Congress seems fine with it. Whereas Democrats pretty uniformly support DC voting rights, I’ve never anyone suggest Congress shouldn’t have authority to mess with DC’s laws.

While the authority does reside in the Constitution, it’s nonetheless completely illegitimate when done for any reason not effecting Congress. Give us the same rights as any other region. If there is a legitimate security concern ask the Department of Homeland Security to write a report on it and only then override DC’s laws if there is an actual problem, as opposed to a chance to make Conservative Democrats vote on gun control.

I think focusing more on self determination would help remove the Democrats vs. Republicans aspect of the debate, and hopefully personalize the issue more for DC residents and our fellow citizens across the country.

-Chris

Moving Forward

I wanted to do a broad overview of what’s on the agenda for Congress and the nation. The Bush administration left lots of problems unaddressed and neglected, so we’re looking at game changing policy making periods for many issues:

Budget
The Budget is moving forward after the Senate passed the budget on April 29. My understanding is that the bill was nonbinding and only meant to measure the support for the framework proposed by Obama.

Once the authorization process is complete they will move on to the appropriations process, and we’ll really start see the contours of the debate emerge. I’m sure we’ll be hearing a lot about this from the Economic Justice team and other groups in the coming weeks.

[UPDATE by Jeremy: Yes all this is correct. Congress just passed the budget resolution, which sets the departmental guidelines but doesn’t contain any specifics. The meat will come from the twelve major appropriations bills. Click here for a useful primer on the federal budget process, including the budget reconciliation tool being discussed for health care and climate change legislation.]

Climate Change and Energy
The House Energy and Commerce Committee held hearings this last week on the proposed Waxman-Markey Cap and Trade bill.

There was a lot of reporting on special interests jockeying for auction and cap exemptions, as well to determine which federal agencies oversee implementation of the eventual cap and trade program for certain industries.

The big picture analysis remains unchanged with the big Climate Change push still likely to be postponed until next year, little support for using budget reconciliation language to reduce the number of Senate votes necessary from 60 to 50, and not a lot of will power to stand up to special interests that want exemption, delays, and lax regulatory enforcement. I do think the current trajectory supports some limited implementation of carbon auction, but only after significant period of carbon permit giveaways.

The Obama energy plan, focusing on development of alternative fuels and energy efficiency, will probably be voted on this year.

Healthcare
Health care reform appears to have a lot more policymaker will power behind it, at all levels of government. There is also a stronger push from progressive lawmakers to make sure it’s the right kind of legislation.

Congressional and Administration leaders are committed to passing health care reform this year, and have indicated they will use budget reconciliation language, which means they will need only 50 votes in the Senate to pass the legislation.

Under the terms of the reconciliation deal, the 50-vote process kicks in if a health care measure isn’t passed by October 15th of this year. It’s a very messy process and should be avoided if possible, but the threat is important to spur more reluctant participants (and Bayh-esque direct obstructionists) to action.

Having a public plan option in the bill seems to be the primary sticking point. A variety of progressive Congressional leaders are indicating their support for a public option, and  moderate voices such as Ben Nelson and Arlen Specter are equally persistent in voicing their opposition.

Foreign Affairs

There is a lot going on in the world, but two things I wanted people to be aware of going forward are: the Obama Administration’s expressed desire to enact a two state solution for Israel and Palestine in the next four years, and the generally unstable situation in Pakistan. Presumably, our Pakistani delegation can keep us attuned to happenings on the latter front.

Both issues have a very good chance of popping up as major congressional issues before the next Presidential election.

DC Voting Rights
The Bill giving Eleanor Holmes Norton voting rights continues to be deadlocked after it was altered to strip away DC’s gun control laws. I’m not sure if anyone really knows what the next steps will be.

-Chris