The federal government is making billions of dollars on student loans every year. So why double the interest rate on the loans next year? To boost those profits.


The federal government pays tons of money to run its student loan programs, right? The interest rate on those loans is doubling next year from 3.4% to 6.8% in order for the taxpayers not to need to subsidize student loans as much, right?

Not according to law professor Alan White, who says that “Congress’ dirty secret is that the government makes a huge annual profit on student loans.” In his latest blog on the highly respected blogsite, Credit Slips, he cites as his main source “the scrupulously nonpartisan Congressional Budget Office.” According to its data, “$37 billion will flow IN to [the U.S.] Treasury from student loans made this fiscal year at the 3.4% rate.” And that’s after accounting for about $1.5 billion to administer those loans. So the interest rate doubling dispute “is about whether to increase this annual profit next year.” The two parties “are arguing about how much of the federal deficit to plug with student loan interest money.” If the interest “rate will jump up to 6.8% for 2013 loans, [that would yield] another $30 to $40 billion return to Treasury.”

But wait a minute. How about all the money that is lost because of all the borrowers who can’t or don’t pay on their student loans? Prof. White acknowledges that many loans do go into default, but because student loan creditors have “supercreditor powers, especially wage garnishment and tax refund intercepts. . . [, t]here is no statute of limitations… , and even bankruptcy discharge is difficult. The $37 billion Treasury profit for [fiscal year] 2012 is after allowing for estimated credit losses in the $5 billion range.”

So how can there be such a huge amount of profit? “In two words, yield spread. ….  Treasury can borrow money at 0.5% or less, and lends it to students at 3.4%.   Administrative costs are well below 1%.”

The bottom line: $37 billion profit for taxpayers in 2012, and about twice as much as that in 2013 if the interest rate doubles.

I don’t know if this law professor is right. My head started spinning when trying to figure out the pages and pages of accounting tables in the Congressional Budget Office’s report. But even if he is right, is it such a bad thing for the federal government to be making a profit with its investment of taxpayer money on student loans? After all, we have a huge deficit hole to plug.

But it seems important when making tough choices to frame the issues honestly. It’s one thing to talk about doubling the student loan interest rate so that borrowers are then paying more of, or even all of, the taxpayers’ cost of those loans. It’s an entirely different story if we’re doubling the interest rate from a level where it’s already raking in billions of dollars in profits, making way beyond paying the taxpayers’ cost.

A study by the Brookings Institute concluded that the “United States spends 2.4 times as much on the elderly as on children, measured on a per capita basis, with the ratio rising to 7 to 1 if looking just at the federal budget.” Is it fair to add this additional deficit-paying burden on the younger generation?

And beyond the question of fairness, we are a nation in which the income gap between the well-off and the poor is widening, opportunities for improving one’s economic status are reducing, and the middle class is being squeezed from all directions.  So doesn’t adding yet another burden on people’s efforts at economic advancement hurt the nation as a whole?

Student loans are not just burdening recent graduates. They’re now directly hurting people you wouldn’t expect. And dragging down the whole economy.


Recent college graduates are clearly hurting in this economy as they come out of school and enter the job market. The national unemployment rate has come down from the Great Recession high of 10.0% in October 2009 to 8.2% in May 2012. But it’s the persistence of extraordinarily high unemployment that is hurting young graduates. Only one other time since the Great Depression of the 1930s had the unemployment rate hit 10%, during the recession of 1981-82. But then, like in most other modern recessions, a strong recovery reduced the unemployment rate quite quickly, in that case down to 7.2% in less than two years. In contrast the current recent graduates are trying to claw their way into their first career jobs in the midst of a “jobless recovery.”

And they are forced to do so saddled under the most student loan debt ever.  You’ve probably heard the news of the past few months that total student loan debt now exceeds $1 trillion and is more than the nation’s total credit card debt. Realize that most of these graduates started college before the Great Recession hit, many heading into careers that looked relatively sensible back then but are now disaster areas. Public school teachers, anyone?

And many others made the tough decision to stay in school to ride out the recession, maybe shifting into more reliable fields, only to be confronted with one of the most anemic recoveries in modern history.

But it’s not just these twenty-something year olds who are hurting. Two other populations are being hugely impacted.

First, middle-aged students have gone back to school in a scramble to shift with the rapidly changing economy to more marketable careers. Their gamble has included taking on a huge amount of student loan debt. As the title of this Reuters article says, “Middle-aged borrowers [are] piling on student debt.” It states that in the last three years, average student loan debt has gone up 47% for the 35-to-49 year old age group, more than for any other group.

Second, just as dramatic, parents of students are taking on more and more student loan debt on behalf of their children. According to this Bloomberg article, “Loans to parents have jumped 75 percent since the 2005-2006 academic year… .  An estimated 17 percent of parents whose children graduated in 2010 took out loans, up from 5.6 percent in 1992- 1993.”

Hopefully the retrained, re-schooled middle-aged workers will find work that justifies taking out the loans. After all, the labor force has to adjust to the changing realities of the labor market, and if it does so efficiently the whole economy benefits.

And hopefully the parents’ investment in their children’s education will also be worthwhile. Their kids’ increased earning power over their lifetimes may well make it so. And you’d think that if a college student knows that his or her parents are mortgaging their home or their retirement, that student would be motivated to make good use of the education!

But the bigger question is whether this cycle of increased student loan debt is sustainable. What would the consequence be for all of us if student loan defaults increased significantly, like subprime mortgage defaults did at the beginning of this Great Recession?  A title of a recent report by the National Association of Consumer Bankruptcy Attorneys asks the question squarely: “The Student Loan ‘Debt Bomb’: America’s Next Mortgage-Style Economic Crisis? 

I’m a bankruptcy attorney who looks across my desk just about every day into the faces of clients whose investment in higher education did not pan out. I know that in my line of work I don’t tend to hear the success stories, but from where I’m sitting it feels like we’re heading in a dangerous direction.

The headline story: many more Americans now believe that strong conflict exists between the rich and the poor. The surprising backstory: our attitude has NOT changed about how the rich got to be that way.

This follows up on my last blog about the very recent report by the Pew Research Center titled “Rising Share of Americans See Conflict Between Rich and Poor.” In just the last couple of years there has been a major spike in public perceptions that serious class conflict exists in our society. I would think that with a big shift like this, people’s attitudes about how the wealthy acquired their wealth would have changed, too. But it hasn’t.

So how would you answer this survey question?

“Which of these statements come closer to your own views—even if neither is exactly right: Most rich people today are wealthy mainly because of their own hard work, ambition or education.  Or, most rich people today are wealthy mainly because they know the right people or were born into wealthy families.”

In the Pew survey, slightly more people—46%—said that a person’s wealth is the result of connections and birth, than those—43%—who said that it is a result of that person’s own efforts. Those percentages have virtually not shifted in the last three years. So if I’m reading this right, at the same time that many more Americans are feeling there’s more class conflict, no more of us are feeling that wealth is only for those born into it. In other words, just as many people continue to believe that wealth is attainable for those willing to work hard for it.

That belief may be a false hope for many since there is a lot of evidence that upward class mobility has taken a serious hit in America in the last decade or two. This may be reflected in the Pew report where it breaks down the differing responses among different categories of people:

  • Age:  More young people than older ones believe that wealth is a matter of birth and connections than personal effort. The percentage of people who believe that wealth is a result of personal effort went down with each younger age category—65+, 50-64, 35-49, and 18-34. It would be interesting to know if this greater doubt among younger people about not being able to gain wealth has persisted over time. Or are younger people just more keenly aware of –and in fact daily experiencing—serious challenges to their upward mobility.
  • Race:  Although Whites are split right down the middle—44% to 44%—on this question, a full 10% more Blacks—54%—believe that wealth is a matter of birth and connections. It’s hard not to see in this difference a greater lingering perception of discrimination among Blacks.
  • Politics:  My favorite breakdown is this one: Republicans and Democrats have the exact same percentages—32% and 58%—but on the opposite sides of the question! 32% of Republicans believe wealth is primarily a matter of birth and connections while 58% believe it’s a matter of hard work; 58% of Democrats believe it’s a matter of birth and connections and 32% believe it’s a matter of hard work. And independent voters? THEY are split down the middle. It all sounds like a fitting metaphor for our current political stalemate.

Many more Americans now believe that strong conflicts exist between the rich and the poor. After years of very high unemployment, millions of home foreclosures, and months of the Occupy Movement dominating the news, maybe this is not so surprising. But there ARE some unexpected aspects of this change in attitude.

In mid-January, the Pew Research Center released a report titled “Rising Share of Americans See Conflict Between Rich and Poor.”

You’ve likely heard about the Pew Research Center, but you may not know that it is a highly respected public policy research organization that is not only nonpartisan, it does not even take positions on issues. Instead it sees its role as “provid[ing] information on the issues, attitudes and trends shaping American and the world.” This report is an example of data it puts out for others to debate about their policy implications.

The survey analyzed in this report was conducted in mid-December, and compared the results to those of the same survey in 2009. The main conclusion is that the percentage of people who believe that there are either “very strong” or “strong” conflicts between the rich and the poor has increased in just two years from less than half—47%– to about two-thirds—66%–of us. Even more dramatic, the percentage stating the conflict is “very strong” doubled in these two years, from 15% to 30%.

If these attitudes are not just temporary, and especially if this trend continues, the social and political consequences for our nation would be huge.

But beyond this headline-grabbing main finding, the report also contained the following surprises:

  • This perception of conflict is perceived to be greater among rich and poor than within other longstanding social conflicts in society—more than between immigrants and native born, between blacks and whites, and between young and old.
  • This perception is NOT one held only by those with lower income.  To the contrary people of all incomes share a similar increase in perception of conflict.
  • Younger people perceive more class conflict than do older people, women more than men, Democrats more than Republicans, and African Americans more than whites and Hispanics.
  • In spite of increases in perceptions of class conflict among virtually all groups, the report does “not necessarily signal an increase in grievances toward the wealthy” nor “growing support for governmental measures to reduce income inequality.” Specifically, “there has been no change in views about whether the rich became wealthy through personal effort or because they were fortunate enough to be from wealthy families or have the right connections.”

The reason American Airlines filed Chapter 11 bankruptcy is so that it could break promises it made to its employees and its aircraft suppliers. It is the only major airline that had not filed bankruptcy after 9-11.

According to its website, the airline “took this action in order to achieve a cost and debt structure that is industry competitive and thereby assure our long-term viability and ability to continue delivering a world-class travel experience for customers.”

In other words, they couldn’t stay in business if they had to keep their promises.

It couldn’t “achieve” a “cost and debt structure that is industry competitive” without bankruptcy for two main reasons.

1) Its management made some bad bets about leasing jets which are now outdated and much less fuel efficient than newer ones. It can’t get out of these lease contracts without bankruptcy.

About 40% of American’s jet fleet of 619 planes are MD-80s made by McDonnell Douglas Corp. before it was bought out by Boeing, so they are no longer in production. They are being replaced by newer jets which are about one-third more fuel efficient. Just last July the airline announced it would buy 460 single-aisle jets in the industry’s biggest-ever order, and now says it wants to still go through with that order.

2) The airline’s negotiations with its labor unions have been dragging out, with mediation scheduled to start in early December with its pilots’ union. A Chapter 11 gives management major leverage against its employees, including with the ever-sensitive issue of pension benefits.

To enable American to avoid filing bankruptcy back in the years immediately after 9/11—during 2005 Delta, Northwest, United Airlines and US Airways were all in Chapter 11—its unions made concessions worth about $1.6 billion annually. “We agreed to sacrifice based on the expectation that our airline would regain its leadership position,” wrote David Bates, president of the Allied Pilots Association. We “will fight like hell to make sure that front-line workers don’t pay an unfair price for management’s failings,” according to James Little, the international president of the Transport Workers Union, which represents aircraft mechanics and baggage handlers.

Why did American file Chapter 11 now? It did not have an immediate cash crunch—it had $4.1 billion in cash and short-term investments to fund current operations. It did not even have to look for immediate “debtor-in-possession” financing when it filed its Chapter 11 case, as is often the case. The timing must surely have had to do with its labor negotiations. Plus the company had some big debts coming due next year, and ever increasing pension funding costs that it hopes to dump or trim. So instead of waiting until it had not choice, the company filed the bankruptcy reorganization as a strategic move.

Check back here for my next blog, which I’m calling “The Morality of the American Airlines Chapter 11 Reorganization,”comparing it to an individual filing a consumer bankruptcy.

In most parts of the country, foreclosure rates have been highest for low-income borrowers, and lowest for higher-income borrowers. But the exact opposite is true in “boom-market metropolitan areas located in California, Nevada and Arizona.

This is one of the most surprising finding of a report released a couple of weeks ago by the Center for Responsible Lending (CRL) called Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures. In my last blog I wrote about this report, focusing on its main headline story that 5 years into the foreclosure disaster, we’re not even halfway through it. But this conclusion that higher income homeowners are more prone to foreclosure in certain parts of the country is a real eye-opener.

This very thorough study of mortgages divided the borrowers into four categories:

Low-income: at 50% or lower than the area median income

Moderate income: at 50-80% of the area median income

Middle-income: at 80-120% of the area median income

Higher-income: at more than 120% of the area median income

Regional housing markets were also divided into four categories, based on appreciation in home prices between 2000 and 2005:

Weak-Market States:  Indiana, Iowa, Kansas, Kentucky, Michigan, Mississippi, Nebraska, North Carolina, Ohio, Oklahoma, Tennessee, Texas

Stable-Market States: Alabama, Arkansas, Colorado, Georgia, Illinois, Louisiana, Missouri, North Dakota, South Carolina, South Dakota, Utah, West Virginia, Wisconsin

Moderate-Market States: Alaska, Connecticut, Idaho, Maine, Minnesota, Montana, New Mexico, New York, Oregon, Pennsylvania, Vermont, Washington, Wyoming

Boom-Market States: Arizona, California, Delaware, Distr. of Columbia, Florida, Hawaii, Maryland, Massachusetts, Nevada, New Hampshire, New Jersey, Rhode Island, Virginia

For the weak-, stable-, and moderate-market states, the rates of foreclosure were highest among low-income borrowers, lower among moderate-income borrowers, lower still among middle-income borrowers, and the lowest among higher-income borrowers. But in the boom-market states, the foreclosure rates are completely opposite: highest among higher-income borrowers, lower among middle-income borrowers, lower still among moderate-income borrowers, and the lowest among low-income borrowers.

While it seems intuitive that the lower income borrowers would be less able to weather the storms of a harsh recession, why are the results topsy-turvy in the boom-market states?

Start by remembering that by the report’s definition most “higher-income borrowers” were not that wealthy:

While these borrowers may have had higher incomes (with a median of $61,000 for middle-income borrowers and $108,000 for higher-income borrowers), the extremely high cost of housing in these boom markets, even for modest homes suggests that the majority of these borrowers were not the very wealthy buying mansions, but rather working families aspiring to homeownership and the middle class.

But then the report made a fascinating discovery in looking at the incidence of high-risk features within mortgages, such as hybrid or option ARMs, prepayment penalties, or higher interest rates:

While in weak market areas, low-income and moderate-income families have the highest incidence of mortgages with at least one high-risk feature, the pattern is reversed in boom markets.

I suspect that because housing was so expensive in these boom-markets, even home purchases made by those in the higher-income categories used higher risk mortgages because a) they needed to stretch their housing dollar to afford what they were buying, b) property values were climbing so fast that everybody figured they could refinance later into a better loan, and c) sales were happening so quickly that the entire process got sloppy.

The end result is that mortgages with “high-risk factors” are resulting in more foreclosures, even if they belong to higher-income borrowers. There could be many explanations for this–for example, homes in those regions’ may be deeper “underwater,” or the unemployment rate may be higher there, either of which could push up the foreclosure rate. But overall the results seems to imply that a borrower’s good payment history is better predicted from the existence or absence of “high-risk factors” in the mortgage than from the borrower’s amount of income.

Going on five years into our foreclosure disaster, a major report is now authoritatively giving us that sobering news.

The Center for Responsible Lending (CRL) is a respected non-partisan research and policy organization with the mission of “protecting homeownership and family wealth by working to eliminate abusive financial practices.” In mid-November it released the results of its comprehensive analysis of foreclosures called Lost Ground, 2011: Disparities in Mortgage Lending and Foreclosures. This study reviewed and tabulated 27 million mortgages originated from 2004 and 2008, and looked at the borrowers’ performance on those loans through last February. As its title signals, the study addresses at how different socio-economic groups, different parts of the country, and different racial groups have been affected by the flood of foreclosures. Its findings contain a number of meaningful surprises, which I’ll tell you about some other time. But its first finding—that we’re not even halfway through these foreclosures—is what most caught my attention.

The analysis shows that of all mortgages entered into from 2004 through 2008, at least 2.7 million of them have been gone all the way through to completed foreclosure. This is about 6.4 percent of all mortgages entered into during that period of time. And this 2.7 million does not include foreclosures that have occurred in these last few years on earlier mortgages, those entered into before 2004.

Of this same set of 2004-2008 mortgages, another 3.6 million households are “at immediate, serious risk of losing their homes.” The study defined this category as those mortgages already in the midst of the foreclosure process, or more than 60 days delinquent. Not all of these will result in completed foreclosures, but a large percentage likely will.

So, about 2.7 million foreclosed, 3.6 million to go.

It’s important to realize that this 3.6 million in seriously troubled mortgages does NOT include other troubled mortgages which originated outside the 2004-2008 period, nor those which are performing decently now but will nevertheless go to foreclosure in the near future because of new unemployment, etc. So it is very likely that there will be more than that 3.6 million number.


I realize that for many people, this constant talk about foreclosures gets tiring, frustrating, even maddening.  Unless you are dealing with a foreclosure yourself, or are close to someone who is, it’s one of those things that’s in the news so much, year after year, that the stories start sounding the same so you start tuning it out.

But I can’t tune it out. I don’t want to tune it out. Much of my job is to listen attentively to those stories, told to me virtually every day by hard-working men and women who are fighting to save their family home, their place of shelter and stability and dignity. Behind every single foreclosure, and every threatened foreclosure, there is a very human story. Some of the stories are rather straightforward, but most are messy. Human beings being who we are, our lives don’t tend to travel down a neat and tidy path. My job is to take your financial story, lay out your options, and help you chose among them to get to the best place you can get to. Including with your home.

The country is nowhere close to working through its foreclosure epidemic. But let me help you get through your own personal part of it.

Why is the unemployment rate staying so high, years after the recession officially ended? If we knew the answer to this question, we’d have a fighting chance at addressing the problem.

In our national economy of 300 million people, it’s not easy to tease out what’s keeping the unemployment rate so high so long. But one just-published study caught my eye because it gives an answer that seems to make sense. It takes a creative look at the connection between high household debt and the unemployment rate.

Now it may sound like common sense to say that if the bottom drops out of a population’s most valuable commodity—their homes—so that their debts exceed their assets, these people are either going to have much less money to spend or be less comfortable about spending money they have. So the goods and services they are no longer buying means unemployment for whoever was providing those goods and services.

But some argue that there are other more important causes of high unemployment. One example is the “argument that businesses are holding back hiring because of regulatory or financial uncertainty.” Another one is that shifts in the global market require unemployed people to retrain, keeping unemployment high while they do so. All of these theories seem to make some sense, but the point of economics is to figure out which of these is really the cause. Or if all three contribute to unemployment, economists are supposed to calculate how much each one does.

So this study determines that high household debt, especially mortgage debt, is the primary reason for unemployment, causing at least 65% of the current unemployment.

Before the start of the Great Recession there was huge variation across the country in the amount of household debt, tending to be highest where the housing prices had climbed the most. For example, the household debt-to-income ratio in California was 4.7 while in Texas was only 2.0. This study looked closely at the differences in employment losses in high- and low-debt counties, distinguishing between losses in employment sectors primarily catering to the local population—such as local restaurants, personal services—and those with a national base—such as manufacturing, call centers. Unemployment rates in the local employment sectors were much worse in the high-debt counties than the low-debt ones, whereas unemployment rates in the nation-based employment sectors were similar in both high-debt and low-debt counties.

Although this may sound somewhat commonsensical, these results did not support other possible justifications for the persistent high unemployment. The study results did not support that jobs were not being created because of governmental or economic uncertainty (think Washington deficit reduction stalemate or the Eurozone crisis) or because of a retraining time gap.

Instead “weak household balance sheets and the resulting  … demand shock [that is, overleveraged consumers not having or spending money] are the main reasons for historically high unemployment in the U.S. economy.”

This seems to mean that high unemployment will be with us as long as a large percentage of homeowners are underwater on their homes. Is anybody in Washington even working on this problem?

U.S. corporations are making record profits quarter after quarter, yet unemployment seems to be stuck at a devastatingly high rate. Why aren’t these financially flush big businesses hiring?

I’ve been writing a string of blogs about how tax debts are dealt with in bankruptcy, and I’ll get back to that after today. This is the time of year when the nation’s major corporations report their 3rd quarterly profits, and so I found myself scratching my head about the disconnect between their huge profits and their lack of hiring. So I read a number of news stories and editorials and this is what I got out of them:

1.  Big businesses have gotten to be more “productive,” in the sense of producing more goods and services with less labor. That has happened partly through investments in labor-saving technology and partly by requiring employees to work harder and faster for the same pay. With the cut-throat labor market, companies don’t need to increase salaries to retain or replace their employees.

2.  Profits have increased because a larger percentage of sales for large U.S. corporations have been overseas. Around 40 per cent of their profits are from foreign sales. For many companies, sales are growing modestly in the U.S. while growing much faster elsewhere, especially in the “emerging markets” of China, India, and South America.  

3.  Relatively strong overseas sales come with job growth overseas instead of here. According to the U.S. Commerce Department, in the past decade, U.S.-based multi-national corporations added 2.4 million jobs outside the country while cutting 2.4 million jobs here. Jobs naturally grow where sales are growing–someone has to take customer orders at the 3,000+ KFCs in China! But of course there’s also increased foreign outsourcing of work that used to be done here, from manufacturing to computer programming.

4. Normally when businesses are more productive, resulting in more profits, they tend to expand, thus creating more employment opportunities. But this has not been happening for three reasons.

a. With the double-whammy of very high unemployment and loss of home values, U.S. consumers either don’t have the means or the attitude to spend money, so companies are leery about expanding to increase production.

b. The international business environment—particularly the European sovereign debt crises in Greece, Italy and elsewhere—is making big business cautious.

c. Political gridlock in Washington, D.C. makes business planning very difficult. With the Congressional deficit-reduction “super committee” scheduled to issue its report very shortly, big businesses have been sitting tight to see if this “super committee” will come up with its momentous compromise, and what it’ll consist of.

The bottom line: big businesses don’t need to hire to produce the goods and services they are producing, at least within the U.S., and they don’t want to expand and hire here because of lackluster consumer demand and high uncertainty in the world economy and in domestic politics.

Not only do the majority of the wealthy think that they should be taxed more, so do a majority of Republicans. These are the surprising conclusions of two recent polls.

When the second-richest American, Warren Buffett, wrote an op-ed column in the New York Times a few months ago advocating increased taxes for himself and everybody else with an annual income over $1 million, that wasn’t such a big surprise. He has been pushing similar policies for quite a while. For that matter so has the # 1 richest American, Bill Gates.

But that column by Buffett generated such a firestorm of opposition that it would have been easy to think that he and Gates don’t have much support among their wealthy colleagues.  Not true, according to a survey of millionaires taken during October 2011 by the Spectrem Group, “the premier research and consulting firm in the wealth and retirement industry.” More than 67 percent of those millionaires surveyed said that the U.S. economic situation would be improved by increasing taxes on those with more than $1 million in annual income, pretty much what Buffett is advocating.

Well, OK, that’s surprising. But maybe they’re so rich they can easily afford to pay taxes. Or maybe those in the top 1% being made infamous by the Occupy Wall Street folks are not as greedy as they are being made out to be. Or maybe just not that anti-government. As Mark Cuban, another of the ultra-rich, has said straight out in his own blog a couple months ago: “Pay your taxes. It’s the most Patriotic thing you can do.”

Now Gates, Buffett, and Cuban may not exactly be representative of all wealthy Americans. And who knows how reliable that Spectrem Group survey is. But if true, it’s noteworthy that a full two-thirds of millionaires think that if their taxes were higher that would help our economy instead of hurt it.

But what about everyday Republicans? I would have thought that a very strong majority of Republicans would oppose “increasing the taxes paid by people who make more than one million dollars a year.” This was the wording of the question asked in a CNN/ORC poll taken in mid-October.  But instead about 56% of Republicans favored increased taxes for these high-earners, while 43% opposed them.

I don’t pretend to know what this means. It may be as simple as an attitude—even among Republicans–of “tax the other guy to plug the deficit.” There are only about 250,000 U.S. households with incomes of more than a million dollars, so they don’t get a lot of votes in a national poll. Whatever the cause for this willingness for a selective tax-increase among the Republican electorate, it seems to reveal a disconnect between them and their single-mindedly anti-tax representatives in Washington.