Bricks and Mortars

Suckers or incompetents?

By Lawrence Reichard | Jan 11, 2018

It's been a busy time in Augusta. Politicians have been working overtime to thwart the will of Maine voters. Various ballot measures passed by Maine voters in 2016 have been stymied by the Legislature and or Gov. Paul LePage. Those measures include ranked-choice voting, which has run head-on into politicians' keenest instinct: self-preservation. And then there are Medicaid expansion and a 3-percent surcharge on incomes of more than $250,000, with the funds earmarked for education.

We're told there's no money for Medicaid expansion, though the federal government will cover almost all the cost. And we're told the high-income surcharge will chase wealthy "job creators" from the state, though there's no evidence to support this. On the contrary, the much-vaunted job-creator class often rates education considerations higher than tax rates when deciding where to put jobs.

While Augusta says it can't find $54.5 million a year for Medicaid expansion, to provide health insurance to 70,000 low-income Mainers — at a state cost of only $789 per person — the state is gearing up to lavish a 20-year, $60 million tax break on General Dynamics, a Fortune 100 company and the fifth-largest military contractor in the world.

In 2016, General Dynamics made $3 billion in profit and bestowed a tidy $21 million — enough for the state to fund health insurance for 27,000 Mainers — on CEO Phebe Novakovic. From 2013 to 2016, General Dynamics had so much cash lying around that it bought back $9.4 billion of its own stock.

But apparently that isn't enough for General Dynamics, so the company has prevailed on state Rep. Jennifer DeChant of Bath to draft and sponsor a bill granting the $60 million tax break. And General Dynamics is helping draft the bill. General Dynamics wants to take away health care from 3,800 Mainers to fatten its bottom line by one one-thousandth.

This kind of thing is nothing new for General Dynamics. In the last 20 years, General Dynamics has extracted a total of $200 million in tax breaks from the state and from the city of Bath, home of the General Dynamics Bath Iron Works shipyard. That's enough money for the state to fund health insurance for 13,000 Mainers, year in and year out.

And the state's $60 million tax break will not go to BIW workers. The recent BIW four-year contract calls for stagnant wages and a greater employee share of health insurance costs. The money will go instead to the millionaire and billionaire General Dynamics executives and stockholders, to whom President Trump said Dec. 22, 2017, referring to the recently passed tax bill, "You all just got a lot richer."

The BIW scam is the same as that of the high-income surcharge: Give us the money or we'll leave the state. Nonsense. General Dynamics's Marine Division is racking up profits of 15 percent, enough to make any CEO salivate. Only a fool would upset that apple cart.

Bath Iron Works, a General Dynamics subsidiary, used to frighten Augusta with the Ingalls Shipyard boogeyman. Give us tax breaks or we'll go under and all our work will go to Ingalls Shipyard in Mississippi. Now they scarcely bother to haul out the Ingalls boogeyman. Just sign the damn paper.

But BIW's not going anywhere. The federal government, BIW's only customer, likes having its current geographic production dispersal, as it protects against enemy attack and natural disasters such as the hurricanes that plague the Ingalls Gulf Coast shipyard. And BIW is not going to walk away from a $500 million shipyard, or from a highly skilled workforce that is not quickly or easily replaced.

According to University of Southern Maine Professor Emeritus Orlando Delogu, Ingalls runs the same extortion racket down in Mississippi: Give us what we want or we'll go under and all our jobs will go to Maine.

In other words, state Rep. DeChant and her Augusta colleagues have for 20 years been suckered by the General Dynamics millionaires, and they're lining up to get suckered again, while Maine's poor go without health care and Maine's schools are chronically underfunded — in betrayal of yet another successful ballot referendum.

Meanwhile, in my last column I reported that in six tweets designed to soften up her constituency for her vote in favor of the deeply unpopular Republican tax bill, Sen. Susan Collins wrote that she had extracted from Senate Majority Leader Mitch McConnell a promise to pass, by the end of 2017, two specific bills designed to mitigate provisions of the bill that would — and now will — harm poor and middle-class Mainers.

Well, as this column goes to press Jan. 1, neither bill has passed either house of Congress. In fact, neither bill has even been introduced.

As predicted in this column, the sugary sweet promises McConnell made to Collins weren't worth the oxygen used to utter them. McConnell played Collins for a straight-up sucker. Either Collins knew McConnell's promises were worthless and didn't care, or she was incompetent for believing promises that were at best — and obviously — highly unrealistic, and at worse were flat-out disingenuous.

In exchange for their crucial votes in favor of the tax bill, other senators got their demands written right into the bill. Alaska's Lisa Murkowski got her fevered wish to destroy the Arctic National Wildlife Refuge. Florida's Marco Rubio got expansion of the child tax credit. The previously principled Bob Corker of Tennessee got — as did President Trump — a special tax break for his real estate business. Collins got promises.

In sum, the actions of Maine's politicians, in Augusta and in Washington, beg two questions. Are they suckers or simply incompetent? And why is it that their seeming gullibility or incompetence always benefits the wealthy?

Lawrence Reichard is a first-place Maine Press Association winner, freelance writer and activist living in Belfast.


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