Joe Biden is Obama's secret weapon

Mitt Romney has a credibility problem.

Shepard Smith, the Fox news anchor, was talking about Mitt Romney's "friendship" with Newt Gingrich when he said it, but the sentiment could apply categorically.

"Politics is weird. And creepy. And now I know lacks even the loosest attachment to anything like reality."

I laugh every time I watch that video.

There is indeed something weird about Romney's singular focus on the economy when he, as the former head of a private-equity firm that bought and dismantled companies for profit, knows as much about job creation as a butcher knows about animal husbandry.

There's something creepy about a Republican ignoring tried-and-true red-meat issues, like gay marriage or immigration or "religious liberty," with which Republicans are historically good at dividing and suppressing votes.

And there's something truly surreal about Romney's avoidance of the words "George W. Bush." In Florida last week, Romney said that Obama doubled the national debt but didn't mention the part about the stimulus program, the auto bailout and the fact that George W. Bush added $4 trillion to the debt. (In fact, it was Vice President Dick Cheney who said deficits don't matter.) Evidently, Romney is banking on memory loss but just to be sure, he's avoiding Bush's name so as not to remind us where much of that debt actually came from.

Yet there was a moment of clarity last week of the kind that comes from having the scales fall from your eyes to see the truth about America's classless society. The Obama campaign released a video about the time Bain Capital, the Wall Street firm Romney once headed, took ownership of a steel mill in Kansas City. Former workers recalled Bain loading the mill up with debt, filing for bankruptcy, firing employees, closing the mill, shirking pension obligations, and walking away with a smile.

Let me say this. My father is a truck driver. He hauled steel for more than a decade. He was proud, as most white working-class men are, and he saw what happens when rich guys take over a steel mill. They don't care about the important stuff, only money, and even when they have "enough," as my dad would say, they want more until the company is bled to death. The Obama camp was careful to avoid appearing to be anti-private equity (since so many firm directors give to the Democratic Party), just anti-vulture capitalism. But that kind of hairsplitting means little to working-class men like my father. They know the truth when they see it.

Shortly after it released the video, the Obama campaign released "The Biden," as they like to say. That is, Joe Biden, the vice president, who actually comes from working-class stock. Picking Biden as his running mate was brilliant, but we didn't see it as such four years ago. With the economy still humping along, with Romney as the richest man ever to run for the White House, with unlimited sums of money being poured into this election -- all this makes it crystal clear why a cool and rational wonk like Obama needs a pulpit-pounder like Biden.

The campaign "released" Biden on Youngstown, Ohio, an old mill town gone to seed like rest of the Rust Belt that rings around the Great Lakes. In a speech, Biden took on the notion that complaints about inequality and injustice are rooted in envy. "[Romney] doesn't get what's at the core of all this. It's about people's dignity." He went on:

I resent when they talk about families like mine, what I grew up in. I resent the fact that they think we're talking about envy. It's job-envy. It's wealth-envy. That we don't dream. My mother and my father believed that if I wanted to, I could be President of the United States, I could be Vice President. My mother and father believed that if my brother and sister wanted to be a millionaire, they could be a millionaire. My mother and father dreamed as much as any rich guy dreams. They don't get us. They don't get who we are.

As Bob Moser, of the American Prospect, said: "This wasn’t Obama’s brand of 'class warfare,' which never actually sounds like a declaration of war. This was righteous fury. The real thing. From the gut."

Biden's right. Romney has a credibility problem. He told college students that a simple solution to the rising cost of tuition is to borrow from your parents. He made a bet with Rick Perry (who didn't accept) for $10,000. He said speaking fees of over $300,000 "wasn't much money." And he said his wife drives not one but two Cadillacs.

There's another reason why Romney "doesn't get what's at the core of all this." As the American economy has shown signs of tepid but incremental improvement, Romney has pivoted to focus on debt. The hope, I suspect, is that talk about the national debt will sound so big and scary, as it did two summers ago, that Romney will seem to be the most sensible choice.

But most people don't understand debt, and they don't want to. They understand their own (which is bad), but not the federal government's (which might be good, it depends). What they do understand is jobs. Their jobs and the jobs of the people they love. I'd bet that in the minds of most Americans, the national deficit is big and scary, and somebody ought to do something about it, but it's not as pressing or immediately felt as losing one's job, health insurance, home -- or sense of dignity.

Perhaps politics does lack even the loosest attachments to reality. That's certainly a luxury Romney and the others of the 1 percent can afford. For the rest us, though, this is the real thing. Life lived from the gut.

Photograph: Getty Images

John Stoehr teaches writing at Yale. His essays and journalism have appeared in The American Prospect, Reuters Opinion, the Guardian, and Dissent, among other publications. He is a political blogger for The Washington Spectator and a frequent contributor to Al Jazeera English.


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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.