Economy

What’s one focus of GOP state legislators throughout the county, including here in Oklahoma, as a new U.S. Congressional Budget Office report released last week outlined massive wealth disparity between the nation’s richest residents and everyone else?

That GOP focus is to drug test welfare recipients and deny them benefits.

Now that’s the essence of “class warfare,” a term Republicans like to use in an attempt to demonize anyone who thinks the wealthy should pay more in taxes or the government should do more to create job and educational opportunities.

The CBO reported last week that the top 1 percent of the wealthiest Americans doubled their incomes over the last three decades. According to an article in the New York Times:

In its report, the budget office found that from 1979 to 2007, average inflation-adjusted after-tax income grew by 275 percent for the 1 percent of the population with the highest income. For others in the top 20 percent of the population, average real after-tax household income grew by 65 percent.

By contrast, the budget office said, for the poorest fifth of the population, average real after-tax household income rose 18 percent.

Note the “275 percent” number. That type of massive shift in wealth is simply not sustainable. What if the trend holds for another three decades? How could democracy even exist in such an environment?

Of course, the wealth disparity issue is not a revelation. Economists have been pointing out the shift in wealth and how lower taxes on the wealthy have contributed to budget deficits for years, but the CBO is a neutral organization and the report carries more weight than a report issued by a think tank.

The report validates one of the main arguments of the Occupy Wall Street demonstrations, which is that 99 percent of Americans are facing varying forms of economic injustice.

Meanwhile, a federal judge has blocked a Florida law that requires anyone applying for welfare benefits to be drug tested on the basis that it violates the unreasonable search and seizure clause in the U.S. Constitution. Under the law, if those people applying for assistance test positive for drugs, they are denied benefits. The law was championed by Republican Gov. Rick Scott. A similar Michigan law was also blocked a few years ago.

It’s doubtful lawmakers from states like Oklahoma, Kentucky, Alabama and Louisiana will drop their plans to pass similar laws given the Florida decision. An earlier Time Magazine article pointed out:

Mandatory drug testing for welfare applicants is becoming a popular idea across the U.S. Many states — including Alabama, Kentucky, Oklahoma and Louisiana — are considering adopting laws like Florida’s. At the federal level, Senator David Vitter, a Louisiana Republican, has introduced the Drug Free Families Act of 2011, which would require all 50 states to drug-test welfare applicants.

The idea of drug testing welfare recipients is just the perpetuation of the “welfare queen” myth once used by former President Ronald Reagan in a presidential campaign. Studies and statistics just don’t bear out that welfare recipients commonly use government money to purchase illegal drugs. There isn’t a problem, and the Florida law, before it was blocked, didn’t save the state much money.

In Oklahoma, two state representatives have said they plan to push for a drug-testing law here next legislative session.

The discrepancy between GOP silence and inaction on growing wealthy disparity, which is steadily damaging and failing our country, and its push to deny even meager assistance to the country’s poorest citizens, is the type of real class warfare being waged in this country right now by those who do the bidding of oligarchs.

Statistics only tell a part of any given societal dilemma, but the U.S Census Bureau reported this week that median household incomes dropped and poverty rose last year in the nation.

The bureau numbers seem to prove the obvious about the country’s weak economy and its staggering 9.1 national percent unemployment rate. In 2010, the $49,455 median household income was down by 2.3 percent from the previous year. The poverty rate stood at 15.1 percent in 2010 compared to 14.9 percent the previous year. The number of people without health insurance stands at an incredible 49.9 million.

An article in The New York Times points out that “ . . . the number of Americans living below the official poverty line, 46.2 million people, was the highest number in the 52 years the bureau has been publishing figures on it.”

The most recent numbers reported specifically for Oklahoma show a 2009 median household income at $41,716 and a 16.1 percent poverty rate. By contrast, California had a $58,925 median household income and its poverty rate was 14.2 percent in the same year. Oklahoma does have a relatively lower unemployment rate at 5.5 percent, but it could still be lower, and record numbers of residents here are seeking food assistance.

Oklahoma also had a child poverty rate of 22 percent for 2009, according to Anne E. Casey Foundation. This is a statistic that doesn’t bode well for the state’s future. What will happen with impoverished children when they become adults? Children who live in poverty do less well in school and are more likely to stay in poverty when they grow up. What does that mean for the state’s overall economy?

Some larger questions: Are the nation and Oklahoma undergoing a systemic financial change that will mean chronic unemployment, lower salaries and higher poverty for the foreseeable future? Is the political process, one which has consistently rewarded wealthy people over middle-class citizens in recent decades, toxic and unfair? How do corporate media outlets affect our debate over these important issues?

Behind the statistics are individual stories of physical and mental suffering, but the overall narrative is that our country has lost its way in ugly maze of wealth disparity, greed and lack of basic compassion. When this will come back to haunt us in major ways that demand significant structural change in our political process?

Tax revenues increased in January for the seventh straight month and the state’s Secretary of Finance Preston Doerflinger said it could be the result of “pent-up demand and optimism by Oklahoma consumers after a period of household belt-tightening.”

Let’s hope the trend continues. According to a press release Monday, January tax revenues were $79.9 million, which is 19.5 percent above last year and $23.9 million or 5.1 percent above the estimate.

A nearly 20 percent increase over last year and seven straight months of revenue increases are good signs for sure, but Gov. Mary Fallin was quick to indicate it’s probably not going to affect her calls for what she calls “right-sizing” government.

According to the release, Fallin said:

This is good news for our state but we need to continue to find ways to streamline operations and make government more efficient and more effective, regardless of the revenue picture. We also need to continue our focus on job creation and growing our economy so we can continue to bring more opportunities here for working Oklahomans and bolster state revenues.

Fallin called for 3 percent cuts to education and social services and 5 percent cuts for other agencies in her recent State of the State address.

David Blatt, director of the Oklahoma Policy Institute, has pointed out that some government officials were relieved the proposed cuts weren’t larger. But he also has some words of “caution”:

Many agency officials and advocates expressed relief that the cuts in the Governor’s budget were less than feared. But two notes of caution are in order. First, it is uncertain whether Governor Fallin’s key revenue-generating ideas will gain legislative approval or whether the anticipated savings from “government modernization” will fully materialize. Without these measures, cuts would have to be even deeper than those the Governor recommends. (On the other hand, the budget does leave $100 million unspent, which can be used to plug holes. In addition, if the revised certification to be presented later this month to the Board of Equalization projects stronger revenue collections over the next 17 months than December’s initial estimates, the budget gap will not be as sizable).

Secondly, even with these optimistic assumptions about savings and new revenues, the impact of the cuts in the Governor’s budget remain extremely worrisome. With a few exceptions, most agencies are facing FY ’12 funding that is 15 to 25 percent below their budgets for FY ’09. The ability of these agencies to fulfill their basic functions – whether that is protecting the public health from disaster and disease, dispensing justice in a timely fashion, or conducting inspections and issuing licenses – has already been critically corroded by successive rounds of cuts. Even those core agencies that are partially protected will see their funding reduced in FY ’12, despite, rising operating costs and caseloads, which means the ongoing potential for serious damage to public programs.

Blatt is exactly right about how government finances here have already become “critically corroded.”

I’ll make these points: (1) If increased tax revenues could reduce next fiscal year’s budget shortfall, will Fallin and the Republican-dominated legislature reduce the size of the cuts or are they, at this point, ideologically wedded to across-the-board cuts because of the current political milieu here? (2) Those of us who have lived here a long time know that economic downturns make the state play a constant game of catch-up when it comes to just near average (or even less) government funding on a per capita basis when compared to other states. This is especially true for education. Don’t let the Republicans fool you this year. Oklahoma government has been cut to the bone here. A broad swath of our population—from schoolchildren to people with mental health problems—are suffering the consequences.