Archive for February 2023
Posted by NYPIRG on February 27, 2023 at 8:50 am
Posted by NYPIRG on February 20, 2023 at 10:33 am
During his State of the Union address, President Biden challenged Congressional Republicans to pledge to leave Social Security alone as the nation’s budget gets hammered out. This challenge was smart politics —the program is a popular one, particularly among seniors, who turn out to vote in large numbers.
Some high-profile Republicans had been—and some continue to be—banging the drum for cutting Social Security. And while their plans essentially seek to undermine support for the program, particularly among younger adults, the basic critique is accurate: The program is spending more than it generates in revenues. Unless something is done, in a decade or so the program may have to cut back benefits.
Here is the situation. Social Security is financed primarily by payroll taxes on employers, employees, and the self-employed. In addition to tax revenues, Social Security trust funds also receive intragovernmental interest payments on the Treasury securities they hold. Those securities were purchased because, until recently, Social Security was running annual surpluses and those revenues were used to purchase U.S. Treasury securities. However, once the revenues coming in did not match the money being paid out to Social Security beneficiaries, the program had to start cashing in its securities.
If current law remains in place, according to the Congressional Budget Office (CBO), the Social Security trust funds are projected to be exhausted in the calendar year 2033. When the trust funds are exhausted, then the Social Security Administration would still be able to pay some benefits, but it would not have the authority to make payments in excess of the payroll taxes received each year.
Thus, it would have to reduce benefits.
So, what should be done? Some Republicans are arguing that now is the time to cut back spending on the program. Florida US Senator Rick Scott floated a plan to have all federal programs expire after five years and thus trigger a re-write of programs that lawmakers wish to extend. He later backed off that plan, saying that he did not mean that Social Security and Medicare should be sunset. Former Vice President Pence has said that everything should be on the table when considering changes to Social Security.
Something must be done. An idea being pushed by Vermont US Senator Sanders goes after one big loophole in how Social Security is funded. In 2022, only income up to $147,000 was subject to the Social Security tax. That number goes up with inflation and is expected to be $160,000 this year, but there are many people that make more—and some a lot more—than $160,000.
Sanders raises the question, why should their income be exempt from taxation?
According to the CBO, just that increase could generate enough revenue to push off the date that Social Security revenues fail to adequately cover expected expenses.
According to Senate Democrats, applying the payroll tax on Americans’ earnings above $250,000 per year and changing the tax so it also applies to investment income as well, would extend the program’s life span by 75 years.
A cap on taxable earnings has existed since the inception of the Social Security system in 1937.
The maximum taxable amount reflects the original purpose of the program: to provide workers with a “safety net” of retirement income. Over the years the cap was increased in order to help maintain the program’s solvency.
But Sanders raises an important question – why have a cap at all?
After all, much has changed over the past 85 years. The wealth gap has meant that those with the highest income have more of their income exempt from Social Security taxation. When payroll taxes for Social Security were first collected in 1937, about 92 percent of earnings from jobs covered by the program were below the maximum taxable amount. In 2020, about 83 percent of earnings from employment covered by Social Security fell below the maximum taxable amount. In short, the cap itself makes the tax regressive.
It is clear that the cap must be changed, but the first question should be whether to have one at all.
Approximately 67 million Americans receive benefits under the program. That’s about 1 in 5 people. Without Social Security, 22 million more Americans would be below the poverty line, including almost a million New Yorkers. The average benefits are quite modest, around $1,670 per month. Any reduction in benefits would result in more people being forced into poverty.
As with any financial problem, the longer one waits, the more difficult the choices. The same is true now. So, doing nothing may be smart politics, but leaving the problems to fester will make future policy options worse.
Whistling past the graveyard can’t solve the Social Security problem. Acting, and acting quickly, can.
Posted by NYPIRG on February 13, 2023 at 9:28 am
The strategy of wealthy corporations seeking to influence public policy follows a “political cookbook” first devised in the 1960s. At that time, the tobacco industry hatched a plan to attack government regulation after the US Surgeon General’s report on the health hazards of smoking.
The plan was complex and comprehensive, but it included a few key strategies: undermine the science with funded “experts” willing to advance Big Tobacco’s perspectives; fund “front groups” of aligned businesses and associations that lacked the moral backbone to reject its donations; and shower elected officials with campaign contributions and other gifts in order to buy political fealty. These strategies, coupled with well-funded public disinformation campaigns to sow doubt, bamboozled the public and for decades blocked the enactment of meaningful public health protections.
As a result, millions experienced needless diseases and early deaths– a plague upon America and the world.
But public health advocates uncovered the deceptions and tactics of the tobacco lobby and reversed the debate. For the past twenty years, tobacco use has shrunk, the industry has paid hundreds of billions of dollars in public health damages, and its political influence has waned.
During this time, the oil industry was taking notes. After its own scientists reported that the burning of oil, coal, and gas would heat up the planet and could lead to catastrophic consequences for all humanity, the industry sprang into action. It closed its scientific research and began its own disinformation campaign of attacking independent science, funding front groups, and investing in political mouthpieces of all kinds.
Their campaign has worked – and continues to work throughout much of America. Yet, in New York, the public interest pushed back and stopped the effort to allow industrial scale extraction of gas through “fracking” and pushed forward meaningful environmental measures to shift the state away from the reliance on fossil fuels for its power.
Despite the positive work done to combat tobacco addiction and to move toward reliance on non-fossil-fuel power, both the tobacco and fossil fuel industries have recently advanced new disinformation campaigns in New York.
The most widely-reported is the fossil fuel industry’s efforts to roll back the state’s efforts to reduce its reliance on oil and gas for power. As reported in the New York Times, last year the gas industry spent nearly a million dollars to block the state’s efforts to require that new buildings rely on electricity for power and heat, not fossil fuels. This year’s version focuses on the ludicrous campaign to scare New Yorkers into thinking that the government is looking to take away gas stoves. The industry is spending big on a public relations campaign, and presumably showering money on allied groups and elected officials.
This time, the tobacco industry is following the oil and gas lobby.
Industry groups, bolstered by the big bucks of the tobacco lobby, are lining up in opposition to Governor Hochul’s proposed ban on flavored tobacco products, as well as her proposed $1-a-pack hike in cigarette taxes.
Why is the governor proposing a ban on the sale of flavored tobacco? Currently, flavored cigarettes and flavored e-cigarettes (“vapes”) are banned for sale in New York. In 2009, the Congress banned the sale of flavored cigarettes – except menthol flavors. In New York, the state bans the sale of all flavors in vapes.
The reason for the current restriction is pretty obvious – flavored cigarettes and vapes are designed to make it easier for kids to suck in the harsh emissions from these products. The sweeter the taste, the easier it is to get hooked.
Governor Hochul’s plan plugs the remaining gaps – other flavored tobacco products, such as that found in cigars, cigarillos, and chew, as well as a ban on menthol flavoring.
The industry is fighting back hard, arguing that forbidding flavors impacts adults’ “choice.” But it is obvious to anyone who has watched the industry, and their front groups, that they know they need flavorings to entice and keep new generations of hooked tobacco users to replace those who quit, get sick, or die. Otherwise, their industry will itself die.
Thus, the tobacco industry has organized a new disinformation campaign to undermine the science. It’s enlisting its usual allies – those who sell these deadly products – as well as adding hired public relations firms to push their deadly opposition.
New Yorkers have seen their poisonous playbooks before, but it’s been a while since the tobacco lobby got involved in a high-visibility effort.
Don’t be fooled. Both Big Oil and Big Tobacco are using their bags of money and tricks to once again block needed public health and environmental protections. This time, the governor and state lawmakers should blow away the smokescreens and put the public interest first. These fights are likely to play out in the budget, so we’ll know soon enough whether lawmakers have the spine to stand up to these powerful special interests and their disinformation campaigns.
Posted by NYPIRG on February 6, 2023 at 8:54 am
The year-end profits for the West’s biggest privately held oil companies were released last week and the results were staggering: a record $200 plus billion. And when you add the companies controlled by governments – Aramco for example – the industry is getting richer on a scale never seen before.
Exxon Mobil made $56 billion in profit last year, its largest annual haul ever. Chevron earned $36 billion, also a company record. Shell, Europe’s biggest energy company, doubled its profits in 2022 to almost $40 billion — the highest in its 115-year history.
In fact, of the top seven western, publicly-traded, not-government-run oil companies, every one with the exception of Marathon Petroleum more than doubled their earnings. And Marathon’s still rose by 67%. All told, the companies pulled in $228 billion last year, tens of billions of which they used to enrich their stockholders in the form of dividends and stock buybacks.
For example, Chevron announced a $75 billion buyback program. Exxon announced its own $50 billion repurchase plan in December. The record profits and share repurchases paid out to investors in 2022 by the western majors have provoked outrage. Most notably, last week President Biden commented in his State of the Union address that those actions “in the midst of a global energy crisis” were “outrageous.” He proposed quadrupling the federal tax on corporate stock buybacks.
The comments of the United Nations Secretary-General were even more pointed:
“It is immoral for oil and gas companies to be making record profits from the current energy crisis on the backs of the poorest, at a massive cost to the climate. This grotesque greed is punishing the poorest and most vulnerable people while destroying our only home.”
Those record profits are largely driven by the economic recovery following the COVID pandemic-related recession and the war in Ukraine. After years of pressuring Big Oil to curb production, political leaders from London to Berlin to Washington changed tack last year as prices surged, calling on companies to boost output or help them procure replacements for boycotted Russian fossil fuels following Moscow’s full-scale invasion of Ukraine.
As a result, Big Oil is raking it in.
Instead of allowing the companies to enrich their shareholders and fatten their bottom lines, why not divert some of those earnings to offset societal costs resulting from climate change related storms and rising sea levels?
New Yorkers will have to pay tens of billions of dollars to address the climate crisis. A 2022 federal report found New York State experienced 51 billion-dollar disaster events due to the climate crisis from 2000 to 2021 – costing the state between $50 to $100 billion, and up to $20 billion in 2021 alone. And more intense storms and rising sea levels pose threats to the state’s coast lines along the Great Lakes, the Hudson River and, of course, the Atlantic Ocean. Protecting those shores will be extremely expensive. For example, the U.S. Army Corps of Engineers estimates that it will cost $52 billion to protect New York Harbor alone.
Let’s not forget that the crisis we are now in is the result of the oil industry’s efforts. The industry knew for decades that the burning of fossil fuels will lead to the planet heating up. Instead of taking responsibility for their business practices, they engaged in a campaign of aggressive climate denial. Decades of opposition to environmental protection legislation and international treaties has resulted in a climate crisis that only dramatic action can help to mitigate.
They are now making money hand over fist. And they believe they will continue to do so for years to come. Chevron chief Mike Wirth recently stated that “The reality is, [fossil fuel] is what runs the world today. It’s going to run the world tomorrow and five years from now, 10 years from now, 20 years from now.”
Why not shift some of those profits to offset the financial, health, and environmental burdens we will all face as a result of climate change – changes that could have been avoided if not for the oil companies’ propaganda?
Legislation introduced in New York and under consideration in Maryland, Massachusetts, and Vermont would divert some of those profits – today and for years to come – to cover climate change induced costs. The New York bill requires companies most responsible for greenhouse gas emissions to pay a total of $75 billion over 25 years for the environmental damage they have done. The funds would allow New Yorkers to invest in massive infrastructure improvements, upgrade stormwater drainage and sewage treatment systems, prepare the power grid for severe weather, create systems to protect people from extreme heat, and respond to environmental and public health threats.
As Governor Hochul and state lawmakers work to hammer out a final budget agreement, they should protect New York taxpayers from the significant and growing costs of climate change. They should claw back some of the oil industry’s staggering profits to cover the costs of global warming. Make the climate polluters pay.
The big Albany news last week was the unveiling of Governor Hochul’s 2023-2024 Executive Budget proposal. Hammering out a final budget is rarely easy, but the prospects for the governor’s plans are boosted by the state’s $8.7 budget surplus.
That surplus is the result of higher-than-expected tax revenues and monies that have flowed from the federal government. The governor also laid the groundwork for tougher days ahead, proposing that half of this year’s surplus be added to the state’s reserve funds to boost that total to more than $20 billion.
The governor’s plan anticipates a possible recession (mild) that would cut into future state revenues, with her office projecting budget gaps of about $22 billion over three years.
The proposed $227 billion proposal covers a lot of ground, calling for more money for existing programs, as well as offering new policy initiatives. The governor wants record increases in education and Medicaid spending. She also would set aside more than $1 billion to help New York City pay some costs of providing social services to new asylum seekers. Her budget offered details about her plan to build 800,000 units of affordable housing over the next decade.
When it came to climate change, her budget paralleled the plan offered late last year by the state’s Climate Action Council. The Council was created under state law to develop a plan for the state to meet its science-based greenhouse gas emission goals.
Hochul is calling for a $5.5 billion investment to promote energy affordability, reduce emissions, and invest in clean air and water. Her plan includes a “cap-and-invest” program that would establish a tightening cap on greenhouse gas emissions and invest the proceeds from polluter fees, with a focus on helping disadvantaged communities. The “cap-and-invest” plan is modeled on the state’s current cap-and-trade program, the Regional Greenhouse Gas Initiative, a cooperative effort among eight eastern states that caps and reduces carbon dioxide emissions from power plants. The governor’s plan would extend that concept to large-scale greenhouse gas emitters and distributors of heating and transportation fuels, requiring they purchase pollution allowances for their activities. Proceeds will support investments in climate mitigation, energy efficiency, clean transportation, and other projects, in addition to funding an annual Climate Action Rebate that will be distributed to all New Yorkers to help mitigate any potential consumer costs associated with the program.
Additionally, the governor’s budget proposes that all new building construction rely on non-fossil fuels for power. Her plan is to require by 2025 that there be no on-site fossil fuel combustion for smaller buildings, and by 2028 for larger buildings. In addition, the plan would bar the sale of fossil fuel heating equipment by 2030 for smaller buildings and by 2035 for larger buildings and related fossil fuel systems for all buildings. In a surprise addition, the governor proposed legislation to allow the New York Power Authority to build renewable energy projects.
The governor’s new construction plan lags behind a law already in place in New York City – the skyscraper capital of the nation. Why the governor delayed the implementation of the ban on gas and oil being used to power new buildings is unknown – a head scratcher given that new construction is considered the “low-hanging fruit” of moving off fossil fuels.
One of the biggest problems facing the state is the eroding finances of the downstate mass transit system, run by the Metropolitan Transportation Authority (MTA). The federal government has provided $15 billion in aid to help the MTA recover from financial losses during the pandemic. Due to slower than anticipated gains in ridership, the MTA will spend that money fast. With projected budget deficits of $600 million in 2023 and $1.2 billion in both 2024 and 2025, the state must provide additional funding so that the MTA can serve New Yorkers and help New York City fully bounce back.
If approved, the governor’s plan would stop the MTA’s financial hemorrhaging, but not right the ship. The ongoing financial problems will continue to fester and the threats of rising sea levels and more fierce storms will add to that price tag. More will need to be done.
The governor advanced a plan that is likely to draw significant opposition. The governor’s budget, while keeping the statewide cap of 460 charter schools in place, proposes to eliminate regional caps and make 85 more slots available for new charter schools anywhere in the state. In addition to proposing an expansion of charter schools, the governor also advanced new public safety measures, which are also likely to generate legislative opposition.
The governor also embraced her predecessor’s plan to hike public college tuition, another initiative that will generate opposition. It was the former governor’s higher education budgets that contributed to the growing financial problems within the State University and City University systems. Governor Hochul also failed to propose any new help to independent colleges, which are also in bad financial shape.
In the area of health care, the governor proposed an increase in cigarette taxes and a ban on the sale of flavored tobacco products – to track the current prohibitions on flavored cigarettes and vapes. Already the tobacco lobby and their front groups are mounting fierce opposition to these measures. The governor’s plan falls short – she does not use the additional proceeds to fund the state’s anti-smoking efforts or boost efforts to curb the sale of illegal tobacco products. That failure plays right into the hands of the tobacco lobby and their allies.
More will be learned as the governor’s plans get legislative scrutiny, starting this week. Under New York’s Constitution, the governor wins a lot more than she loses in Albany’s budget fights. Too often, Albany forgets whose money it is they’re fighting over. In order for the governor and state lawmakers to get it right, we have to stay engaged. Stay tuned.