Tag: campaign finance

Adler on How the IRS Is Rewriting ObamaCare to Tax Employers

Jonathan H. Adler is the Johan Verheij Memorial Professor of Law and director of the Center for Business Law and Regulation at Case Western Reserve University.  In this new Cato Institute video, Adler explains how a recently finalized IRS rule implementing ObamaCare taxes employers without any statutory authority.

For more, see this previous Cato video, “States Should Flatly Reject ObamaCare Exchanges”:

See also our November 2011 op-ed on this IRS rule that appeared in the Wall Street Journal.

An Intended Consequence

The New Republic has an interesting article explaining “How Campaign Finance Laws Made the British Press so Powerful.” Basically, only British newspapers are free of regulations that suppress political speech. The author suggests adding more controls (including content restrictions) on the British newspapers to enforce “impartial” coverage. In other words, the media should be just as repressed as everyone else, and political leaders should be free of criticism.

Like many others, I have long thought that U.S. newspapers editorialize in favor of campaign finance restrictions to control competing speech and thereby become more powerful. After Citizens United, other organizations now enjoy the same First Amendment protections as media corporations like The New York Times and The Washington Post. No doubt that does mean such corporations are less powerful than they would be if campaign finance laws suppressed political speech that competes with their editorials and news reports. However, such competition is good for voters.

The First in a Long Series

The Washington Post offers today a critical look at independent fundraising and spending in the 2012 campaign.

The article states independent groups are raising money “in response to court decisions that have tossed out many of the old rules governing federal elections, including a century-old ban on political spending by corporations.”

But the century-old ban is on campaign contributions by corporations, and it is intact. Spending on elections was not prohibited to some corporations until much later.

Other spending by corporations, like the money spent by The Washington Post Company to produce the linked story, has never been regulated or prohibited by the federal government.

The article mentions a “shadow campaign” and refers to Watergate. It states “independent groups are poised to spend more money than ever to sway federal elections.” Surely something is amiss here! Or at least the causal reader of the Post might conclude that.

But what is going on? A spokesman for one of the independent groups says they are trying to influence the debt ceiling debate and that as far 2012 goes: “We’re definitely working to shape how the president is perceived, because how he is perceived will have a huge impact on how this issue is resolved.”

It sounds like the group is engaging in political speech on an issue, speech that could have some effect on next year’s election. What is amiss about that? Isn’t the right to engage in such speech a core political right under our Constitution?

The article also argues that independent groups, being independent, may fund speech that may harm a candidate they are trying to help. Candidates, in a sense, have lost some control over their campaigns and their messages.

Of course, absent limits on contributions to candidates and parties, the money going to independent groups might go to…candidates and parties. Liberalizing speech, not suppressing independent groups, might be a good way to prevent groups from airing ads that harm or misrepresent candidates for office. Finally, candidates do have the power to repudiate independent ads.

Expect more news stories like this one over the next 18 months. The cause of campaign finance reform is in desperate straits. Reformers in the media are going to construct a narrative that says: money is destroying democracy in 2012, all because of Citizens United. They hope thereby to set the stage to restore restrictions on campaign finance.

Defending Anonymous Speech

For some time now, the U.S. Supreme Court has placed little weight on the value of anonymous speech, especially in the campaign finance context. True, in McIntyre v. Ohio Elections Commission (1995), the Court struck down a state law prohibiting distributing anonymous campaign literature. But from Buckley v. Valeo (1976) onward, the Court has looked favorably on disclosure of campaign spending. Even Citizens United saw only one justice, Clarence Thomas, speak out in favor of anonymous speech.

Long-time First Amendment advocate Nat Hentoff raises some questions about limiting anonymous speech in this video. He praises Justice Thomas and recalls the importance of anonymous speech during the founding era.

A Weak Defense of Disclosure

In an earlier post, I wrote about the problems with the Obama administration’s executive order to force government contractors to reveal their political activity.

The administration defends the mandate by arguing “taxpayers deserve to know how contractors are spending money they’ve earned from the government.”

For the first (and perhaps last) time, I rise to the defense of government contractors. The President apparently believes that anyone who sells a good or service to the government must account for the uses of the money received in the transaction in perpetuity? Obama’s press secretary said the President’s “goal is transparency and accountability. That’s the responsible thing to do when you’re handling taxpayer dollars.”

I do not understand this. The government extracts taxes and spends the money. Indeed, government officials should be accountable for that spending. But once the exchange is made, the money belongs to a private firm. It is no longer the property of the taxpayers.  Perhaps the use of a firm’s money should be disclosed, but you need a different argument to justify that mandate. The President seems to be proposing that anyone who does business with the government may have to account for the money they earn in those transactions. That assertion strikes me as a real expansion of government power.

The most troubling part of all this remains the President’s view that he can enact this mandate through an executive order. Americans should be wondering why a rule rejected by Congress can simply be enacted by fiat by the President. The President does not enjoy the power of a king, does he?

The President’s gambit may be in trouble. Sen. Susan Collins, a Republican from Maine, is questioning the content of the decree. I am glad she is concerned about the First Amendment. I would be happier if she questioned the Obama-Bush conception of executive power that informs this effort.

Monday Links

  • “One of the first rules of negotiating is never to threaten to do something unless you are prepared to do it.”
  • Policymakers and pundits assume the U.S. is so dominant that we’re prepared to fight multiple fronts at once, and that it won’t affect our security.
  • Candidates for office should prepare to raise money, not rely on taxpayer subsidies.
  • More market liberalization could help prepare Japan for any other natural disaster.
  • Are Tea Party-backed Republicans prepared to go the distance on spending cuts?