Mar 10th 2011

Cut Head Start but keep subsidies for Big Oil? - Earth to Boehner…Come In!

by Robert Creamer

Robert Creamer is a long-time political organizer and strategist and author of the recent book: "Stand Up Straight: How Progressives Can Win," available on

Earth to Boehner… come in! When you look carefully at Republican Speaker John Boehner's spending proposal for the rest of 2011 you'd think these guys must have been hanging out on one of those newly-discovered exo-planets in some other solar system.

The Republican proposal, HR1, actually proposes cuts in the Head Start program that would mean:
· 218,000 children from low income families will lose Head Start/Early Head Start services;
· 16,000 Head Start/Early Head Start classrooms will close;
· 55,000 Head Start/Early Head Start teachers and staff will lose their jobs;
· 150,000 low-income families and their children will lose assistance in paying for child care.

They say they need to make these cuts because we must "tighten our belts" to cut spending because "America is broke." But at the very same time they voted to cut Head Start, the Republicans voted to
continue $4 billion worth of subsidies to Big Oil. That's right, they want to continue to hand over $4 billion of the taxpayers' money to companies like Exxon-Mobil, the most profitable company in human history.

These subsidies are suppose to provide an incentive for them to produce more oil - as if the price of oil that closed yesterday at $105.02 per barrel does not do the trick.

In the last quarter of 2010, Exxon-Mobil's profits surged 53% to $9.25 billion on the strength of rising oil prices and increased demand for petroleum products. That means Exxon-Mobil is earning profit at a rate of about $37 billion per year.

How much is $37,000,000,000? It's what 740,000 average American families make for working all year long.

So while the Republicans have proposed to cut back on providing a critical educational boost for the future generation, they have voted to have a tag day for the most profitable company that has existed since the dawn of humanity. Now I'd call that seriously out of touch with the priorities of everyday Americans.

Of course that's not all. The Republicans in the House voted to cut Pell Grants, that help middle class kids go to college, by 25%.

They voted to kill a program that helps low-income families weatherize their homes and permanently reduce their energy bills. Guess we just have to tighten our belts!
They voted to cut funds for employment and training service for jobless workers - so much for "jobs, jobs, jobs."

They voted to cut funding for clean, safe drinking water by more than half, to cut funding for the Centers for Disease Control and Prevention by 10% and to cut funds for the Food and Drug Administration by another 10%. All the while handing out billions to the oil companies.
And remember, they are giving handouts to the oil companies at the same time that oil and gas prices have been skyrocketing.

Increases in gas prices siphon money from the pocketbook of ordinary families. The
New York Times reports that some economists calculate that, "each $10 increase in the price of a barrel of oil knocks 0.2 to 0.3 percentage points off the growth rate of the economy." According to a report by Morgan Stanley investments earlier this month, " a US$1 sustained increase in gasoline prices will act like a US$120-130 billion tax hike, equal to 1.1% of disposable income."

There are, however, two big differences in the "tax hike" caused by gas price increases and a real tax hike. First, most of the money comes from the pockets of ordinary middle class Americans. Second, it all goes into coffers of Big Oil companies instead of paying for things like education, public safety, roads, bridges, subways and health care. It goes instead into the pockets of these huge companies and their shareholders - who are overwhelmingly the wealthiest people on the planet.

Then, of course, Exxon-Mobil has to be able to afford to pay its CEO,
Lee R. Raymond, who last year made $25.7 million dollars. In case you're counting, Mr. Raymond earns 514 times the salary of the average $50,000 per year worker. He is paid $12,355 per hour (for a 40 hour work week). Which means he is paid as much as a minimum wage worker makes all year long in the first hour and half of his first day of the year.

Mr. Raymond made more money before he had a coffee break on January 3
rd this year than many moms who get on a bus at 5 AM every day, take no vacations, and scrub floors for eight hours every day - and repeat that drill for 260 work days all year long.

And with all of that, the Republicans think the taxpayers should reach into their jeans and hand over yet another subsidy from the federal treasury, while at the same time they are cutting slots in Head Start because, Boehner claims, "America is broke." I guess unless you happen to be an oil company - or a Wall Street speculator.

Increasing oil prices not only benefit oil companies - whose reserves of oil skyrocket in value with every increase in world oil prices. They also benefit Wall Street speculators who are the proximate cause of current world oil price inflation.

At the moment, the supply of oil is adequate to meet world demand. We are not experiencing an oil shortage. The price of oil has gone up because Wall Street speculators are betting the turmoil in many Arab counties will disrupt oil supplies and make oil scarcer in the future. It's their bets - and their trading strategies -- that are making world prices rise, not short-term fluctuations in supply and demand.

The influence of speculators on oil prices could be limited if the Commodities Futures Trading Commission (CTFC) were to vote to impose position limits that restrict the ability of speculators to influence oil prices. The CTFC was mandated by Congress to set those limits by the first of this year, but have not yet done so. They have dragged their feet because Republican Commissioners and Republicans in Congress oppose tough position limits since they would also limit the amount of speculative profit that can be made by the base of the Republican Party: Wall Street.

The latest spike in oil prices shows us once again, that our dependence on oil is a grave danger to our economy and our national security. That uprisings half a world away can threaten our economic stability- at the same time they enrich oil giants - should send a clear signal. America has to free itself from our addiction to oil.

It also demonstrates the danger posed to our economy by failure to effectively regulate Wall Street speculation.

But the Republicans not only want to give subsidies to the oil companies, their spending plan would cut our investments in clean energy that would allow us to throw off the yoke of foreign oil.
H.R. 1 slashes key Department of Energy (DOE) programs that promote clean energy by about $1.7 billion - approximately a 23 percent decrease from current levels. What's more, they have included non-budget "riders" that gut the clean air act.

The Republicans are not only endangering our economic security. They are endangering our national security by guaranteeing we are held hostage by whoever happens to control the oil fields thousands of miles from our shores.

In fact, a good case can be made that the Republican Party should register with the Justice Department as an agent of a foreign power: international oil companies that operate across the world's borders, owe no allegiance to any country - and are perfectly happy to compromise America's economic and national security so they can continue to make more and more money by siphoning dollars from the pockets of America's middle class.
Boehner's Republican Party is certainly out of touch with everyday Americans - and its spending priorities endanger America's future.

Robert Creamer'is book: Stand Up Straight: How Progressives Can Win, available

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