What Dems Believe In: Crony Capitalism and Blocking Small Business Jobs

August 30, 2012

What Dems Believe In: Crony Capitalism and Blocking Small Business Jobs

Democrats Have Repeatedly Put Favors for Special Interests Over Helping Small Businesses and Creating Jobs

While taxpayers get stuck with the bill for the Democrats’ failed gamble on Solyndra, a report this week shows that some of the now-bankrupt company’s biggest investors could profit financially. It’s yet another painful reminder that as Americans are struggling in the Obama economy, the Democrats’ biggest donors are cashing out on failure.
The windfall for Solyndra’s investors is a stark contrast with President Obama’s decision earlier this year to block the Keystone pipeline and tens of thousands of shovel-ready jobs after left-wing donors threatened to withhold their support.
Even the Democrats’ government takeover of healthcare was chock full of favors for special interests who agreed in return to pay for ads selling a law that is burdening small businesses and destroying jobs.

While taxpayers get stuck with the bill for the Democrats’ failed gamble on Solyndra, a report this week shows that some of the now-bankrupt company’s biggest investors could profit financially. It’s yet another painful reminder that as Americans are struggling in the Obama economy, the Democrats’ biggest donors are cashing out on failure:

MIDDLE CLASS FAMILIES ARE SUFFERING IN THE OBAMA ECONOMY:

MEDIAN NET WORTH PLUMMETTED DURING THE RECESSION: “Perhaps the most dramatic figure is that median net worth took a major hit during the recession. It plummeted from $152,950 to $93,150.” (Eyder Peralta, “Pew: Middle Class Poorer, Earning Less and Shrinking,” NPR, 8/22/2012)

“HALF OF HOMEOWNERS UNDER 40 ARE UNDERWATER”:(Ann Carrns, “Half of Homeowners Under 40 are Underwater,” The New York Times, 8/23/2012)

“THE UNEMPLOYMENT RATE CLIMBED TO 8.3 PERCENT, WHILE THE BROADER U6 UNEMPLOYMENT RATE CLIMBED TO 15 PERCENT”:(Mamta Badkar, “David Rosenberg On The Jobs Report: ‘Nice Headline, Shame About The Details,’” Business Insider, 8/3/2012)

“IF THE LABOR FORCE PARTICIPATION RATE WAS THE SAME AS WHEN OBAMA TOOK OFFICE IN JANUARY 2009, THE UNEMPLOYMENT RATE WOULD BE 11.0%”:(James Pethokoukis, “July jobs report: America’s labor market depression continues,” American Enterprise Institute, 8/3/2012)

DEMS PROMISED UNEMPLOYMENT RATE WOULD BE AT 5.6% BY NOW IF WE PASSED THEIR STIMULUS: (James Pethokoukis, “July Jobs Report: America’s Labor Market Depression Continues,” American Enterprise Institute, 8/3/2012)

AP: “ECONOMIC RECOVERY IS THE WEAKEST SINCE WORLD WAR II”: (Paul Wiseman, “Economic Recovery is the Weakest Since World War II,” Associated Press, 8/15/2012)

STUDY: U.S. INCOMES FELL MORE AFTER STIMULUS THAN DURING RECESSION: (Jeff Kearn, “U.S. Incomes Fell More in Recovery, Sentier Says,” Bloomberg, 8/23/2012)

WHILE DEMOCRAT DONORS GET A TAXPAYER-FUNDED BAILOUT:

SOLYNDRA INVESTORS WILL BE ABLE TO USE SOLYNDRA LOSSES TO AVOID TAXES ON FUTURE INCOME COMPLETELY UNRELATED TO THEIR FAILED SOLYNDRA INVESTMENTS: “It will, however, hold ‘tax attributes’ consisting of more than one-half billion dollars in net operating losses,” the government filing states. “The equity holders … may then, assuming they meet the other requirements of the Internal Revenue Code, use those net operating losses to reduce their income tax liabilities on income earned from other sources completely unrelated to Solyndra.” (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

SPECIAL DEAL ALLOWED INVESTORS TO BE PAID BACK BEFORE TAXPAYERS IN CASE OF DEFAULT: (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

TAXPAYERS UNLIKELY TO RECEIVE THE $528 MILLION OWED TO THEM BY SOLYNDRA: (Jim McElhatton, “Solyndra Investors Could Reap Tax Windfall,” The Washington Times, 8/29/2012)

FLASHBACK: SOLYNDRA INVESTOR: “WHILE THAT’S GOOD FOR US, I CAN’T IMAGINE IT’S A GOOD WAY FOR THE GOVERNMENT TO USE TAXPAYER MONEY”: “But privately, at least one investor was concerned, writing in an email that while Solyndra won a loan of more than $500 million, it had revenues of less than $100 million and wasn’t yet profitable: ‘… while that’s good for us, I can’t imagine it’s a good way for the government to use taxpayer money…’” (Jim McElhatton, “Emails: Solyndra Took Sales Pitch Directly to Obama,” The Washington Times, 8/2/2012)

The windfall for Solyndra’s investors is a stark contrast with President Obama’s decision earlier this year to block the Keystone pipeline and tens of thousands of shovel-ready jobs after left-wing donors threatened to withhold their support:

PRESIDENT OBAMA REJECTED THE KEYSTONE PIPELINE: (Aamer Madhani and Susan Davis, “Obama Rejects Keystone Pipeline from Canada to Texas,” USA Today, 1/18/2012)

20,000: THE NUMBER OF SHOVEL-READY JOBS FROM KEYSTONE PIPELINE BLOCKED BY OBAMA: (Editorial, “Keystone Cop-Out,” The Wall Street Journal, 11/11/2011)

LONG-TERM JOBS IMPACT: UP TO 130,000 JOBS: (Editorial, “Keystone Pipeline is the Wrong Call,” The Houston Chronicle, 11/11/2011)

NATIONAL JOURNAL ANALYSIS: “U.S. ECONOMY MISSED OUT ON CREATING UP TO A QUARTER-MILLION JOBS” IN 2011 BECAUSE IT “LACKED [ENERGY] INFRASTRUCTURE”: “The U.S. economy missed out on creating up to a quarter-million jobs this year because it lacked the infrastructure to capitalize on a rare divergence in global oil prices, a National Journal analysis shows.” (Jim Tankersley, “A Crude Hit to the Recovery,” National Journal, 11/29/2011)

GREEN GROUPS HAD THREATENED TO ABANDON OBAMA IF HE APPROVED KEYSTONE: “Environmental groups have been protesting the pipeline that would run from Alberta oil sands to Texas refineries, and there have been rumblings that greens would abandon Obama next fall if he approved it.” (Dan Berman and Darren Goode, “Obama Punts Keystone XL Pipeline,” Politico, 11/10/2011)

KEYSTONE REJECTION WAS POLITICAL PAYBACK FOR THE DEMOCRATS’ LEFT-WING “DONOR BASE” THAT OPPOSED THE PIPELINE: “Democrats outside the West Wing and Chicago-based campaign say the politics were clear: With the exceptions of the grousing unions (who will have no choice but to support him in 2012), the party’s donor base, environmental advocates down to their hybrid SUVs oppose the pipeline.” (Glenn Thrush and Darren Samuelsohn, “Keystone decision a political win-win,” Politico, 1/18/2012)

OBAMA MADE PERSONAL PHONE CALLS TO DEMS TO BLOCK KEYSTONE, NEVER MIND THE JOBS AT STAKE: “The White House lobbying effort, including phone calls from the president to Democrats, signals that the vote could be close when it heads to the floor Thursday. The president is trying to defeat an amendment that would give election-year fodder to his Republican critics who have accused him of blocking a job-creating energy project at a time of high gas prices.” (Manu Raju, “Obama Lobbying Dems Over Keystone XL Pipeline,” Politico, 3/7/2012)

Even the Democrats’ government takeover of healthcare was chock full of favors for special interests who agreed in return to pay for ads selling a law that is burdening small businesses and destroying jobs:

DEMOCRATS CUT MORE THAN $700 BILLION FROM MEDICARE TO PAY FOR OBAMACARE: (Douglas Elmendorf, “Letter to the Honorable John Boehner,” Congressional Budget Office, 7/24/2012)

BUT SPECIAL INTERESTS GOT A PAY DAY IN EXCHANGE FOR SPENDING MILLIONS TO PROMOTE OBAMACARE: “In a June 2009 email, President Obama’s point person on health care promised the pharmaceutical industry it would be protected against efforts to allow cheap drugs to be re-imported from Canada, because drug lobbyists had been ‘constructive’ in their secret negotiations with White House officials. … As part of the final deal, PhRMA agreed to support health care legislation, spend millions on ads promoting it, and agree to $80 billion in savings and taxes to help finance the bill.” (Phillip Klein, “Emails Reveal Secret Obamacare Deal with Drug Cos,” The Washington Examiner, 5/31/2012)

QUID PRO QUO, CHICAGO-STYLE: “Drugmakers led by Pfizer (PFE) (PFE) Inc. agreed to run a ‘very significant public campaign’ bankrolling political support for the 2010 health-care law, including TV ads, while the Obama administration promised to block provisions opposed by drugmakers, documents released by Republicans show.” (Drew Armstrong, “Drugmakers Vowed to Campaign for Health Law, Memos Show,” Bloomberg, 5/31/2012)

DRUG COMPANIES GOT A LAW THAT PROVIDED THEM “MILLIONS OF NEW CUSTOMERS”: (Phillip Klein, “Emails Reveal Secret Obamacare Deal with Drug Cos,”The Washington Examiner, 5/31/2012)

PhRMA LOBBYIST: OBAMA “KNOWS PERSONALLY ABOUT” BACKROOM DEAL TO TRADE POLICY FOR PAID ADS: “[T]he Pres’s words are harmless. He knows personally about our deal and is pushing no agenda.” (Footnote 21, House Energy and Commerce Committee, 6/8/2012)

WHITE HOUSE GAVE AARP A LIST OF 25 HOUSE DEMOCRATS TO THANK WITH AD BUYS FOR SUPPORTING OBAMACARE: “Messina also forwarded the AARP a list of ‘top 25 targets list from house leadership’ that were ‘to get thanked with ads after the vote.’ ” (Energy and Commerce Staff, “Investigation Update: Closed-Door ObamaCare Negotiations,” House Energy and Commerce Committee, 6/8/2012)

OBAMA BROKE A CAMPAIGN PROMISE TO THE AMERICAN PEOPLE SO HE COULD MAKE A DEAL WITH DRUG COMPANIES: “As The Wall Street Journal and others reported at the time, the companies escaped price controls and forced the president to back down on his 2008 campaign promise to allow the reimportation of cheaper drugs from other countries.” (Alicia Mundy, “E-mails Describe Deal-Making on Obama Health Bill,” The Wall Street Journal, 5/31/2012)

WSJ: OBAMACARE DEALS SHOW “CRONY CAPITALISM”: “On Friday House Republicans released more documents that expose the collusion between the health-care industry and the White House that produced ObamaCare, and what a story of crony capitalism it is. If the trove of emails proves anything, it’s that the Tea Party isn’t angry enough.” (Editorial, “ObamaCare’s Secret History,” The Wall Street Journal, 6/11/2012)

SMALL BUSINESSES WARN THAT OBAMACARE IS FORCING THEM TO DROP COVERAGE, HURTING THEIR HIRING:

UBS RESEARCH: OBAMACARE IS “ARGUABLY THE BIGGEST IMPEDIMENT TO HIRING”: “Arguably the biggest impediment to hiring (particularly hiring of less skilled workers) is healthcare reform… By raising the cost of labor, healthcare reform systematically discourages hiring, especially of low-wage workers whose mandated benefits are high relative to their wages.” (“Great Suppression II,” UBS Research, Pgs.1, 5, 9/19/2011)

73% OF SMALL BUSINESS JOB CREATORS CITE OBAMACARE AS AN “OBSTACLE TO HIRING NEW WORKERS”: (Peter Schroeder, “Survey: Uncertainty, Gas Prices Slowing Hiring by Small Business,” The Hill, 4/16/2012)

“NEARLY TWO-THIRDS OF EMPLOYERS EXPECT TO SEE A COST HIKE IN THEIR HEALTH PLANS”: “Nearly two-thirds of employers expect to see a cost hike in their health plans when the Affordable Care Act goes into effect in 2014, and a quarter say they will have to make changes to their coverage to avoid penalties, according to the survey by the Mercer consulting firm.” (Kathryn Smith, “Businesses Brace for Health Care Cost Increase, Report Says,” Politico, 8/8/2012)

57% OF SMALL BUSINESSES ARE “VERY” OR “SOMEWHAT” LIKELY TO DROP HEALTH COVERAGE FOR WORKERS: “Should employees begin to leave for an exchange, 26 percent of currently offering small employers are very likely to explore dropping their health insurance plans and another 31 percent are somewhat likely to do so.” (“Small Business and Health Insurance: One Year After Enactment of PPACA,” NFIB, 5/24/2012)

1 IN 8 SMALL BUSINESSES HAVE ALREADY SEEN THEIR HEALTH COVERAGE TERMINATED DUE TO OBAMACARE: (Bara Vaida, “Some Small Businesses Say Health Insurers Are Dropping Their Coverage,” Kaiser Health News, 7/25/2011)

JOB-DESTROYING OBAMACARE TAX HIKES ARE ON THE WAY:

CBO: $1 TRILLION IN OBAMACARE TAX HIKES OVER 2013-2022: (Douglas Elmendorf, “Letter to the Honorable John Boehner,” Congressional Budget Office, 7/24/2012, p.6)

NFIB STUDY: 150K SMALL BUSINESS JOBS COULD BE DESTROYED BY OBAMACARE’S HEALTH INSURANCE TAX: (“NFIB Research Foundation Study: Health Insurance Tax to Cost 125,000 to 249,000 Private-Sector Jobs,” NFIB, 11/9/2011)

AT LEAST 14,500 JOBS OR AS MANY AS 47,000 JOBS COULD BE DESTROYED BY OBAMACARE’S HEART ATTACK TAX: (Michael Ramlet, Robert Book and Han Zhong, “The Economic Impact of the Medical Device Tax,” American Action Forum, 6/4/2012)

13,303 SMALL- TO MEDIUM-SIZE MEDICAL DEVICE FIRMS IN U.S., OR 91% OF ALL MEDICAL DEVICE COMPANIES COULD BE AFFECTED: (Michael Ramlet, Robert Book and Han Zhong, “The Economic Impact of the Medical Device Tax,” American Action Forum, 6/4/2012)

INTERNATIONAL FRANCHISE ASSOCIATION: “3.2 MILLION JOBS AT FRANCHISE BUSINESSES CONTINUE TO BE PUT AT RISK”:(“High Court Ruling Puts Jobs at Franchise Businesses at Risk,” International Franchise Association, 6/28/2012)

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