Friday 7 January 2011

Making Money With Options


After Taking Big Sugar Money, Florida Ag. Commissioner Adam Putnam Seeks To Halt Soda Ban In Schools


Rep. Adam Putnam (R-FL) has yet to take office in his new role as Florida Agriculture Commissioner, but he’s already making his Big Sugar contributors smile.


Throughout 2010, the State Board of Education has considered banning sugary drinks from Florida schools, including soft drinks, high-sugar juices, and chocolate milk. According to the Orlando Sentinel, Board member John Padget “has been pressing his colleagues for a year to cut out most beverages besides water, pure juice and white, low-fat milk.” Justifying such a move, Padget writes in a Key West Citizen op-ed, is the fact that “over one-third of America’s children are either overweight or obese,” leaving them “often less ready to learn in the classroom.”


A few weeks before the issue was to be considered, the state’s newly-elected Agriculture Commissioner, Adam Putnam, wrote a letter demanding that the Board of Education halt such a move. Putnam criticized the Board for choosing “to focus only on the nutrition content in beverages served in Florida schools,” rather than taking a more holistic approach:


One such area that I look forward to tackling is ensuring that Florida’s students have better nutrition options to reduce obesity and related long-term health risks. This is a topic your Board has discussed recently for possible policy recommendations. However, instead of looking at the entire nutrition intake of students, you have chosen to focus only on the nutrition content in beverages served in Florida schools. It is my belief that any nutrition improvement plan needs to be certain that students are receiving the best possible nutrition package, in concert with total wellness initiatives, to allow them to reach their optimum achievement potential. [...]


First steps would be to take a comprehensive look at current school foodservice offerings, rather than making individual product recommendations that do not address the broader health picture. This comprehensive approach will need time to develop and I would appreciate your Board considering delaying any plans to address just a single component of the nutrition factors and instead allow time for a complete approach to building a healthier generation of Florida students.


As a result, “the Board of Education decided to put off any further discussion of the issue,” Deborah Higgins of the Board of Education’s communications department told ThinkProgress, “until the agriculture commissioner-elect Adam Putnam was sworn in.”


However, campaign finance records show that Putnam is less than an impartial figure in the matter. A ThinkProgress investigation has found that the incoming Agriculture Commissioner has been the benefactor of a significant amount of money from both the sugar and dairy lobby during the campaign – both of whom have a strong financial interest in keeping sugary drinks in schools. Despite Florida’s $500 contribution limit for both individuals and PACs, Putnam received at least $61,000 in campaign funds from sugar and dairy interests, including maxed-out contributions from Coca Cola’s lobbyist in Tallahassee Brian Ballard and a slew of maxed out contributions from the Sugar Barons of South Florida, the Fanjul family.


Following his victory on November 2, Putnam also made a wealthy sugar magnate one of his first appointments. Tracy Duda Chapman, Vice President and General Counsel for the corporate megafarm A. Duda & Sons, Inc., was appointed by Putnam as co-chair of his four-member transition team. Chapman is not just heavily invested in the sugar industry herself. She also serves on the leadership of the Florida Land Council trade association alongside the senior vice president of the US Sugar Corporation, Robert Coker, who also maxed out to Putnam.


There is little doubt that sugarmakers take comfort with Chapman sitting at Putnam’s right hand. Now that Putnam has moved to block a ban of sugary beverages in schools, that faith has been vindicated. In an instance of life imitating art, Florida sugarmakers are proving true the classic Simpsons quote, “In America, first you get the sugar, then you get the power.”


Padget, who has spearheaded this issue for over a year, remains cautiously optimistic. “I think we could have 4 votes for this issue,” Padget told ThinkProgress by phone, which would constitute a majority of the seven-member Board. “Still,” he said, “there is a lot of work to be done. I look forward to Commissioner-elect Putnam’s contributions to this effort.”





It's worth taking a step back from the current politics of the tax cut deal and just thinking about the two basic options here.



Option 1: Let the tax cuts for the rich expire. We keep the tax cuts for income under $250,000. The extensions of unemployment insurance are pared back somewhat, and what's left is paid for by spending cuts elsewhere. There's no payroll tax cut, and the extra funds the stimulus gave to the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit expire. Perhaps some form of the tax credit for business investment passes during the next Congress.



This means hundreds of billions of dollar less in deficit spending, but also hundreds of billions of dollars less in stimulus. Some families relying on unemployment benefits are cut off, and many more see their checks reduced. Families relying on the tax credits the stimulus expended also find themselves with less money in their pocket. The payroll tax cut is worth about $1,000 to a worker making $50,000, and because they don't get that in their paychecks, that money doesn't make its way into the economy.



Option 2: Extend the tax cuts for the rich and add tax cuts for everyone else. This is the deal we're looking at. The tax cuts for the rich get extended, and the estate tax is lower than its 2009 level (though higher than it's 2010 level). The cost of extending them is about twice as much in progressive tax cuts and unemployment insurance that have a much larger stimulative effect (if you look at the old Mark Zandi estimates, payroll tax cuts and unemployment benefits are among the most stimulative options). The Center for American Progress estimates that this package will create 2.2 million jobs over the next two years.



If you'd offered me these two options three months ago, I'd have taken No. 2. I said then, and I believe now, that the short-term need is more stimulus, not deficit reduction. If the cost of stimulus is tax cuts for the rich, well, that's not ideal, but the stimulus is more important. But No. 2 wasn't on the table.



The Obama White House, in a move I and others lamented, stopped pushing for more stimulus. They didn't say that if the Republicans were going to insist on more tax cuts for the wealthy, the cost would be more help for those who are hurting. They defined success on the Bush tax cuts in terms of the Bush tax cuts, not in terms of economic recovery. This gave the Republicans the ability to position themselves as defenders of the economy: "We shouldn't be raising taxes during a recession," Rep. Kevin McCarthy said.



The way this should have gone is that Democrats should have proposed turning the Bush tax cuts into a two-year payroll holiday, and adding some other relief measures besides. We should be cutting taxes during a recession -- the cuts just shouldn't be focused on the rich. But Democrats didn't run that play. They didn't really run any play. Obama simply opposed the tax cuts for the rich. And so this outcome, in being completely different than the one they said they were going for, is being understood as a loss, and even a capitulation. But they're losing their way into a better deal, and one that looks more like the deal they should've been going for in the first place.



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166188One Responsehttp%3A%2F%2Fwww2.macleans.ca%2F2011%2F01%2F07%2Fthis-weeks-travel-news-33%2FThis+week%27s+travel+news2011-01-07+20%3A17%3A34macleans.cahttp%3A%2F%2Fwww2.macleans.ca%2F%3Fp%3D166188 to “This week's travel news” ...

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This might not be the 'most impressive' Star Wars announcement you were looking for. Not that it's a bad thing the complete saga will be.


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