Friday, November 28, 2008

How to kill a business tax

Here's the bad news: There are no easy answers to solve the state's looming $400 million shortfall.

But the good news is, there's an obvious way to slay the much-maligned Michigan Business Tax surcharge. The Legislature rushed this 19.99 percent levy on top of the new MBT late last year in the frenzy to dump the service tax, which was deemed even worse.

The surcharge is now the bane of business owners' existence, with 9 percent telling the Michigan Chamber of Commerce they're considering leaving the state over it.

Senate Republicans have passed legislation killing the surcharge and promise to balance the budget with magical budget cuts yet to be revealed. While that might make Chamber members feel warm and fuzzy inside, it's akin to doing nothing because there's no deal with the governor or Democratic House.

Meanwhile, the credit crunch is smacking around our battered economy even more and unemployment is certain to veer into double-digit territory soon.

Republicans are right: We can't afford to keep a job-killing tax.

So I'll defer to an idea proposed by two GOP lawmakers, Reps. Chris Ward, R-Brighton, and Lorence Wenke, R-Richland. Let's snuff out the surcharge and up the income tax a bit, say between 4.6 and 4.8 percent. That'll cost the average family about an extra fill-up a year.

The time to do it is now, because as the deficit balloons next year, any kind of tax cut will be off the table.

Unfortunately, the odds of this happening are nil. Senate Majority Leader Mike Bishop, R-Rochester, isn't budging from his no-tax stance, even if it'll squeeze the business community. House Speaker Andy Dillon, D-Redford Township, is skeptical.

"We'd be sending the message that we're increasing people's taxes to cut business taxes," Dillon told me. "I was willing to do that a year and a half ago. So if Mike Bishop can find those votes and wants to send something over, he's welcome to."

It's true that Bishop could have OK'd this deal during last year's budget crisis and we wouldn't here today.

But the plan hatched by Michigan Republican Party Chair Saul Anuzis and House Minority Leader Craig DeRoche (dear God) was to force as many Democrats as possible to vote for tax increases. That was the key to a GOP victory in '08.

So what was their plan to solve the $1.8 billion budget crisis? There wasn't one.

Astute readers will recall that Republicans actually lost nine House seats on Nov. 4. And the much-ballyhooed recall campaign failed miserably.

Not one legislator lost a seat over the tax hikes. Not one.

Ward just shakes his head. "Not only did we have bad policy, but it turned out to be bad politics, too."

Of course, Ward did lose. Not his seat - he's term-limited - but his GOP leadership post for being a grown-up willing to deal with the pagan Dems to get more budget cuts, less taxes and more reforms.

Oh, well. I'm sure the Chamber doesn't mind. Neither do business owners slapped with 1,700-percent increases in their tax bills.

Negotiating is for sissies.

Anyway, back to this year's budget mess. What's that you say? Can't we just cut fat out of the budget? I'm with you, brothers and sisters.

The income tax for surcharge was really Plan B. What Ward would actually like to see is cutting Corrections (which eat up $2 billion of our $9 billion general fund) in exchange for the surcharge. Gov. Jennifer Granholm first proposed the swap this summer, but she didn't provided specifics.

Now we have the blueprint, thanks to the $800 billion in cuts proposed by the economic development powerhouse, Detroit Renaissance. That's even more than what the surcharge generates, which is about $600 million this year and more than $700 million in years to come.

"It was something that we should have done during the budget crisis," Ward said.

Amen. Unfortunately, leaders don't want to take on politically unpopular reforms ranging from sentence guideline reform to shuttering prisons. Even the governor said it would be impossible to do everything in the last few weeks.

Corrections is the logical place to start. It's the one area of the budget that's been spared from the chopping block. Our prison population has soared by 538 percent in the last three decades and costs have skyrocketed 5,000 percent, according to the nonpartisan Citizens Research Council. With more than 50,000 inmates, Michigan has the highest prison population in the Midwest. The cost of a year in prison is $30,000 per inmate.

Clearly, something has to be done.

This will be the battle of 2009, make no doubt about it. And everyone, from Granholm to lock'em-up Sen. Alan Cropsey, R-DeWitt, is sure grateful that a third-party group, the Council of State Governments, will be issuing a report with cuts they can hide behind.

Everybody claims credit for a tax cut. But nobody wants to be associated with cuts that could let the bad guys out (and more importantly, be used in political ads against them).

Looks like this budget battle could turn out to be as much fun as last year's. Lucky us.

Friday, November 21, 2008

The GOP: Evolve or die

The party of personal responsibility is having an awfully hard time with that concept after the election.

Listening to Republicans nowadays is like booking time with a colicky baby. I haven't heard so much whining and crying since my daughter was 3 months old.

Oh, and have I mentioned they're angry? Really steamed, like savaging anyone who suggests they chill as godless socialists who want nonstop gay sex and baby killing for the next eight years (I think I hear my e-mail now). I look forward to adding them to my folder of paranoid messages that Barack Obama won't be inaugurated after all because there is *PROOF THAT HIS BIRTH CERTIFICATE WAS FORGED.* And the threats from Republicans that they just might be moving to Canada.

There's little time for self-reflection in a pity party. And right now, the right is rapturously licking its wounds, sounding more than a little like the Dems in 1980.

There's scant acknowledgement that Obama ran a stellar campaign and Democrats have clearly become the party for moderate voters. No one wants to dwell on the fact that Obama won by 7 percent nationally, when George W. Bush topped out at 3 percent in '04 after losing the popular vote in 2000. And please don't bring up that Obama won nine Bush states, some like Nevada and New Mexico by double digits.

Ignore the state-of-the-art get-out-the-vote drive that made W's look like amateur hour. And pay no attention to the 200,000 tearful supporters in Grant Park, the collective world adulation and reports that Obama could draw a record-shattering 4 million to his inauguration.

No, it's not so much that the Dems won this election, but circumstances conspired so the GOP lost. Really, how could Republicans win with the economy tanking, Bush's legacy and the malevolent media?

It's never their fault. The country is still with them, despite irrefutable proof to the contrary with the presidency and two houses of Congress going very blue.

The clinical definition of this, of course, is denial.

Republicans still insist Obama would have lost without Wall Street going into a tailspin. John McCain was leading in many polls until then, which they attribute to their favorite moose-shooting mama, Sarah Palin. That ignores the fact this was a post-convention bounce and the first time the Arizona senator had posted a consistent lead.

While the economy is surely a tricky issue with a Republican in the White House, the fact is that McCain both lost on this issue due to his wild mood swings and stunts, and Obama won it with his cool demeanor that settled voters' frayed nerves. He also connected far better to the middle class.

As for the current president, he surely was an albatross, which was precisely why right-wingers were whining from the get-go how unfair it was to tie Bush to McCain. Why? They knew it was a powerful message and worried it would work.

Of course, it didn't have to. McCain differs from Bush on issues ranging from global warming to campaign finance and has a much more bipartisan disposition. But by veering to the right to shore up the base, he made those Bush-McCain morphs seem plausible and unseemly.

And there is a certain irony in Republicans ranting that the president isn't a true conservative anyway, what with his big-government Medicare Part D and No Child Left Behind. Well, kiddies, most of you voted for them at the time. Talking heads used to screech that anyone who would dare question our commander-in-chief at a time of war should be charged with treason.

Bush's only real problem with the right is that his poll numbers plummeted.

And finally there's the media, or shall I say, the worldwide conspiracy to put Obama in the Oval Office. Look, it's a fact that Obama won a landslide in newspaper endorsements and won over a number of columnists, many of them conservatives like Chris Buckley.

I don't think this election with its nonstop horserace coverage was a high point for investigative journalism into either candidate, although Obama came out slightly ahead in this regard. There were more negative stories about McCain in general, but that's what happens when your campaign is wracked with infighting and you're losing.

But the idea that the media can determine elections is laughable. If that's the case, we wouldn't be hemorrhaging red ink, because everyone would want a piece of the all-powerful press. Our sales pitch would be devastatingly simple: We can make presidents, you know.
Here's the bottom line for Republicans: You lost. Own it. Learn from it. Stop focusing on what you can't control and fix the fundamental problem - you're not connecting with voters like Obama did. Your no-tax, social-issues-on-steroids message has grown stale.

Ronald Reagan hasn't ruled for 20 years and yet you're still looking back. Demographics can become destiny and you're losing badly with key groups like young voters, Asians and Latinos.

Change is hard for conservatives, for obvious definitional reasons. But the truth is, in the kill-or-be-killed world of politics, those who don't evolve - becoming stronger and leaner - die.

So far Republicans are resisting such heresy. Evolution is just a theory, after all.

Friday, November 14, 2008

The Republicans' Rosetta Stone

Behold, Republicans. The Rosetta Stone for your demise has been unearthed right here in Michigan.

After last week's bloodbath, conservatives are desperately trying to decipher exit poll data and county-by-county vote tallies for answers as to what went wrong. But the key to Republican renewal is right in front of us.

Let's journey to the 7th Congressional District, that swath of rural rugged individualism from the Lansing suburbs to the Indiana-Ohio border. The district was designed to be the most Republican in the state, but come January, a liberal Democrat will represent it in Congress.

State Sen. Mark Schauer, D-Battle Creek, toppled Republican U.S. Rep. Tim Walberg 49 to 47 percent on Nov. 4. True to his petulant nature, the soon-to-be-ex-congressman waited well into the next day to concede, I'm told, although the results were clear.

How did this happen? Ask Joe Schwarz.

Back in 2004, the centrist eked out a GOP primary win for an open seat against Walberg and four other cookie-cutter conservatives. Schwarz's bipartisan appeal earned him 58 percent of the vote in the general.

The Battle Creek physician and 16-year veteran of the state Senate was ranked one of the top 10 most effective freshman members of Congress. He trekked home every weekend, hitting the pig roast circuit in the southern counties like Lenawee and Hillsdale that regarded him with suspicion, despite his conservative bona fides as a decorated Vietnam War veteran and CIA operative, who among other things, helped save Indonesia from a violent Communist coup.

Walberg, a faceless former state rep and Bible salesman, spied an opening. No one could beat Schwarz in a general election - that was clear - but GOP primaries are odd, cloistered contests that disproportionately draw the far right.


With a little help (say, about $1 million) from the anti-tax smear machine Club for Growth, Wally was in business for '06. The Club reduced Schwarz to a caricature, an "embarrassingly liberal" dude who liked nothing better than dispensing Viagra to bums on welfare. As an evangelical preacher, Walberg took care of the church crowd, warning that the good doctor was a baby-killing gay lover out to steal our guns.

Schwarz wasn't helped any when he had to take controversial votes on issues like gay marriage, which he said was redundant. So why did former Majority Leader John Boehner allow that to come to the floor? Why didn't the Michigan Republican Party and the National Republican Congressional Committee sit Timmy down and tell him to butt out?

Because the truth is, the Republican machinery is controlled from top to bottom by right-wing activists. And they like Walberg's politics a lot more than Schwarz's. The seat will always stay Republican, they reasoned, so why not trade a maverick for a foot soldier?

In the end, it wasn't even close. Walberg won by 6 points. But the darling of the far right couldn't even break 50 percent that fall against Sharon Renier, an organic chicken farmer with $1.03 in the bank.

"You're just setting this seat up for Mark Schauer to win it in 2008," warned Schwarz aide Matt Marsden, who was promptly mocked for having sour grapes.

One of the cynics, columnist Brad Flory, conceded this week in the Jackson Citizen Patriot, "Those Schwarz people look like geniuses now."

You betcha.

This year, Republicans lost another crop of moderates thanks to Club for Growth's scorched earth tactics, including U.S. Rep. Wayne Gilchrest in Maryland and U.S. Rep. Heather Wilson in New Mexico.

Enough is enough. The GOP needs a moratorium on primarying incumbents, stat.

The holy grail of ideological purity has proven to be the priciest of illusions. The number of seats lost because the GOP no longer appeals to moderate, suburban voters is staggering. Many centrists have fled the party (Schwarz is a Republican-leaning independent who endorsed Schauer), thus robbing the GOP of institutional knowledge critical to rebuild.

Indeed, much of the brain trust - Colin Powell, former U.S. Sen. Lincoln Chafee, former Rep. Jim Leach - are odds-on favorites to join the Barack Obama administration.

Sadly, there are few grown-ups to tell the right-wing rapscallions to put down the Pop Rocks and come down from the sugar high of deliciously divisive politics. They don't work anymore.

Karl Rove ain't the messiah -he's just another washed-up pundit on teevee who's fallen into the trap of insisting elections can be won with the same nasty tactics from his glory days. Electorates change. Politics change. The Republican Party needs to be nimbler and more inclusive to survive and flourish.

So where's the party heading in Michigan? State Sen. Alan Cropsey, R-DeWitt, a close ally of Walberg and a Bob Jones University grad, reportedly has the answer to the GOP's woes in '10.

Why, a ballot question banning gay adoption, of course.

Now, I could show him the data that initiatives don't drive up the vote unless it's on affirmative action (and that's already been done, folks).

But Cropsey undoubtedly has God on his side. And Democrats from Grosse Pointe to Grayling are hoping he keeps the faith.

Friday, November 7, 2008

The audacity of responsibility

Barack Hussein Obama was never supposed to be elected president. Not with that name, his skin color and certainly not by an electoral landslide.

But he was. And regardless of who you voted for, I dare anyone with a sense of history to not be moved at the sight of his family taking the stage at Grant Park afterward or his face splashed on the traditional Time magazine as the 44th president.

With yet another Democratic tide, the debate rages on about what kind of country we are, liberal or conservative. The answer is obvious: We are both.

Our history likewise is terrible and triumphant. It is one of injustice, of shackling and enslaving a race of people, of hosing them down and turning the dogs on them just five decades ago. But it is one fundamentally of freedom and liberty, from overthrowing the British to found this nation, to restoring these virtues by vanquishing the Nazis in World War II.

The election of our first African-American president 145 years after the Emancipation Proclamation could be and should be a powerful end to a long chapter of prejudice, bringing us ever closer to the ideals our country was founded upon -- what Lincoln called the "better angels of our nature."

From Sydney to Athens to Kogelo, Kenya, people were literally crying in the streets after Obama's election Tuesday.

Voter turnout reached a high not seen since Lyndon Johnson swashbuckled his way through the West Wing. After decades of cynicism since Watergate, people are excited to be part of democracy. They believe in it.

No other leader could have inspired this euphoria, this onslaught of optimism, both here and abroad. Not living, anyway.

No one could live up to this hype and Obama won't. There's always the temptation to play it safe when you are the first of your kind, a living symbol. He surely has been lectured that if his tenure is an abject failure, there won't be another black president for decades to come.

But I think Obama is better suited by the advice the late Gov. George Romney gave John Engler on his inauguration day in 1991: Be bold.

Run the country for the next four years as though you will not be re-elected. Because you very well might not be. You may be blamed in 2012 for the continuing economic devastation or a new terrorist attack. There could be a powerful Republican backlash, whether you're cautious or go at breakneck speed.

You ran on an ambitious agenda and results-oriented philosophy that government can be one of the solutions to our problems. Indeed, the majority of Americans are willing to embrace this idea, more than they have since Ronald Reagan. Look how laughable the Republicans' red-scare tactics turned out to be.

Joe McCarthy reigned a half-century ago, kiddies, and the truth is most voters today didn't live through that. They aren't spooked by the mere mention of socialism, especially when the charge against Obama was so absurd. (And here's a newsflash for the Ayn Rand crowd: We're all commies now, anyway. That's what happens when the evil guv'ment bails out capitalism by buying out the banks).

After covering Obama for two years and reading reams of his work, I don't believe he's wild-eyed lefty, but rather a pragmatic liberal who will govern with a centrist sensibility. He is more progressive than the country, just as Reagan was more conservative in 1980. But through his flexibility, oratory and discipline, the Great Communicator enjoyed great success and moved America to the right.

Obama has the potential to be that kind of transformative figure, which is why he scares the bejeezus out of the bludgeoned GOP. That's a little difficult to articulate, which is why it's simpler to shout that he's a Muslim who pals around with terrorists.

But Mr. President-Elect, I don't see voters giving you the grace of four more years if you come back with empty pockets, mumbling that it's just too hard to do much in a staggering recession while waging a war on terror and you need more time.

Voters can be less forgiving of historic candidates.

And you have the advantage of a very blue Congress. Unlike your recent Democratic predecessors, you have extensive legislative experience and know how the game is played. Adding brass-knuckled U.S. Rep. Rahm Emanuel as your chief of staff would further inspire confidence.

So go forth and stick to your guns. You believe that increasing infrastructure spending will be a jolt to our economy. You believe that health care is a right, not a privilege, and will save businesses and individuals billions by making us more competitive.

You believe that the government needs to invest in clean energy, instead of waiting for the market to catch up, to create jobs and clean up the planet. You believe in a military strategy in which Afghanistan and Pakistan are the central front in the war on terror, not Iraq.

So do it and let history judge.

Most of all, challenge us. Challenge us to be part of this change, to sacrifice during these manic-depressive times, to get off our collective keisters and do something for the country we love.

Americans yearn for a leader. Your charge is deceptively simple, Mr. Obama.

Be one.