Tag: politics

Sestak: Business as Usual

I haven’t taken much interest in the growing story about the possibility that Rep. Joe Sestak (D-PA) was offered a job to entice him out of the primary race against incumbent senator Arlen Specter. If true, this apparently is illegal.

But does anyone think horse-trading like this does not happen in politics all the time? Perhaps someone was gauche enough to name the price of the horse, and perhaps someone didn’t know enough to keep his mouth shut about it. But it’s pretty much a law of physics that an entrenched group of politicians at a remote level of government is going to divvy up the emoluments the public has ceded to them. A law to the contrary may aspire to some ideal of good government, but its effect is only to hide what is going on.

Only if you pretend that politicians are selfless do you find horse-trading around the Pennsylvania Senate race unusual.

How the World of Campaign Finance Is Changing

Journalists are looking closely at the DISCLOSE bill, Congress’ response to Citizens UnitedCQ says DISCLOSE will loosen independent spending by the parties on their candidates.

Why is Congress liberalizing party spending? CQ explains:

According to one GOP attorney, opponents of the Supreme Court’s decision are realizing that they will have a difficult time challenging the constitutional right of outside groups to spend money, so this bill is a response to free up the parties to compete.

Mark that. Citizens United has altered the incentives regarding speech. In the past, Congress tried to suppress speech to win elections. Now leaders must liberalize in order to compete for votes.

Don’t Give Up on the American People…at Least not Yet

Gloominess and despair are not uncommon traits among supporters of limited government – and with good reason. Government has grown rapidly in recent years and it is expected to get much bigger in the future. To make matters worse, it seems that the deck is stacked against reforms to restrain government. One problem is that 47 percent of Americans are exempt from paying income taxes, which presumably means they no longer have any incentive to resist big government. Mark Steyn recently wrote a very depressing column for National Review Online about this phenomenon, noting that, “By 2012, America could be holding the first federal election in which a majority of the population will be able to vote themselves more government lollipops paid for by the ever shrinking minority of the population still dumb enough to be net contributors to the federal treasury.” Walter Williams, meanwhile, has a new column speculating on whether this cripples the battle for freedom:

According to the Tax Policy Center, a Washington, D.C., research organization, nearly half of U.S. households will pay no federal income taxes for 2009…because their incomes are too low or they have higher income but credits, deductions and exemptions that relieve them of tax liability. This lack of income tax liability stands in stark contrast to the top 10 percent of earners, those households earning an average of $366,400 in 2006, who paid about 73 percent of federal income taxes. …Let’s not dwell on the fairness of such an arrangement for financing the activities of the federal government. Instead, let’s ask what kind of incentives and results such an arrangement produces and ask ourselves whether these results are good for our country. …Having 121 million Americans completely outside the federal income tax system, it’s like throwing chum to political sharks. These Americans become a natural spending constituency for big-spending politicians. After all, if you have no income tax liability, how much do you care about deficits, how much Congress spends and the level of taxation?

Steyn and Williams are right to worry, but the situation is not as grim as it seems for the simple reason that a good portion of the American people know the difference between right and wrong. Consider some of the recent polling data from Rasmussen, which found that “Sixty-six percent (66%) believe that America is overtaxed. Only 25% disagree. Lower income voters are more likely than others to believe the nation is overtaxed” and “75% of voters nationwide say the average American should pay no more than 20% of their income in taxes.” These numbers contradict the hypothesis that 47 percent of Americans (those that don’t pay income tax) are automatic supporters of class-warfare policy.

So why are the supposed free-riders not signing on to the Obama-Reid-Pelosi agenda? There are probably several reasons, including the fact that many Americans believe in upward mobility, so even if their incomes currently are too low to pay income tax, they aspire to earn more in the future and don’t want higher tax rates on the rich to serve as a barrier. I’m not a polling expert, but I also suspect there’s a moral component to these numbers. There’s no way to prove this assertion, but I am quite sure that the vast majority of hard-working Americans with modest incomes would never even contemplate breaking into a rich neighbor’s house and stealing the family jewelry. So it is perfectly logical that they wouldn’t support using the IRS as a middleman to do the same thing.

A few final tax observations:

The hostility to taxation also represents opposition to big government (at least in theory). Rasumssen also recently found that, “Just 23% of U.S. voters say they prefer a more active government with more services and higher taxes over one with fewer services and lower taxes. …Two-thirds (66%) of voters prefer a government with fewer services and lower taxes.”

There is a giant divide between the political elite and ordinary Americans. Rasmussen’s polling revealed that, “Eighty-one percent (81%) of Mainstream American voters believe the nation is overtaxed, while 74% of those in the Political Class disagree.”

Voters do not want a value-added tax or any other form of national sales tax. They are not against the idea as a theoretical concept, but they wisely recognize the politicians are greedy and untrustworthy. Rasumussen found that “just 26% of all voters think that it is even somewhat likely the government would cut income taxes after implementing a sales tax. Sixty-six percent (66%) believe it’s unlikely to happen.”

Fiscal restraint is a necessary precondition for any pro-growth tax reform. If given a choice between a flat tax, national sales tax, value-added tax, or the current system, many Americans want reform, but it is very difficult to have a good tax system if the burden of government spending is rising. Likewise, it would be very easy to have a good tax system if we had a federal government that was limited to the duties outlined in Article I, Section VIII, of the Constitution.

Republicans should never acquiesce to higher taxes. All these good numbers and optimistic findings are dependent on voters facing a clear choice between higher taxes and bigger government vs lower taxes and limited government. If Republicans inside the beltway get seduced into a “budget summit” where taxes are “on the table,” that creates a very unhealthy dynamic where voters instinctively try to protect themselves by supporting taxes on somebody else – and the so-called rich are the easiest target.

Last but not least, I can’t resist pointing out that I am part of a debate for U.S. News & World Report on the flat tax vs. the current system. For those of you who have an opinion on this matter, don’t hesitate to cast a vote.

Just Give Us the Data! Transparency and Change

Yesterday my government transparency site WashingtonWatch.com rolled out a transparency campaign (along with many collaborators) called “Just Give Us the Earmark Data!”

Visitors to Earmarkdata.org are encouraged there to sign a petition asking Congress to publish data about earmarks in formats that are useful for public oversight. Developers can also participate in perfecting the data schema that will capture the “earmarks ecosystem” in the best possible way.

After a surprisingly successful effort at “crowdsourcing” earmark data last summer, the push for earmark transparency gained steam in January, when President Obama spoke about it in his State of the Union speech. A White House “fact sheet” issued the same day called for a “bipartisan, state-of-the-art disclosure database that allows Americans to examine the details of every proposed earmark.”

(We were going to ask for good earmark data anyway, but this gave the idea currency in a lot of quarters.)

The focus on earmarks and transparency got the political calculators whirring on Capitol Hill. “Is earmarking worth doing considering the political heat it is going to draw?”

One set of actors came up with their answer last week. House Democrats announced that they would restrict their earmarking only to non-profits. They want for-profit businesses seeking taxpayer money to go through conventional channels like competitive bidding.

The next day, House Republicans came back over the top of Democrats’ political bet. They announced that they would forgo earmarking entirely.

That’s House Democrats and House Republicans. Don’t assume that earmarking is going to go away. A good-government bidding war is on, though—spurred by the political challenge of transparency.

A couple of observations, least important first:

  • If it wasn’t obvious before, this illustrates that politicians are very capable political risk balancers. Indeed, surfing political waves is arguably the primary task of elected officials, most especially at the national level, and without this skill, they are goners. (That’s why looking for a wellspring of principle in an elected official usually gets you swamped in disappointment.)

    I’ve had a number of friendly cynics suggest that politicians wouldn’t mind earmark transparency—bringing home the bacon brings in the votes! This appears in general not to be true. There may still be earmarking from a hard core group who do perceive overall political benefits from it, but they’ll have to buck their parties, who do not.

    (Alas, I can’t say “I told you so!” because I tended to just grin and say “Maybe you’re right!” For future reference, I agree with the tendency, but doubt the direct outcome described in the adage attributed to Benjamin Franklin, “When the people find that they can vote themselves money, that will herald the end of the republic.” Thankfully, it’s more complicated than that.)

  • Notable: Elected officials’ political tuning is not just reactive. The anticipation of earmark transparency is what started this bidding war.This is especially worth noting with respect to President Obama’s “Sunlight Before Signing” promise, which I most recently reported on here. Skeptics have said that President Obama’s promise to post bills he receives from Congress online for five days before making them law wouldn’t make any difference because a bill that Congress has sent down Pennsylvania Avenue is already final. But a parochial amendment hanging out there for five days threatens to draw political discredit on its author and supporters—and their party. Sunlight Before Signing was a meaningful promise.

    (SBS has two advantages over the creditable “Read the Bill” proposal to hold bills 72 hours before a vote in Congress: 1) SBS takes advantage of interbranch rivalry, and 2) it was a campaign promise of the president!)

  • Broadly, this episode illustrates how transparency can bring welcome change. It’s correct to observe that earmarks represent only a tiny part of overall spending. But applying parallel transparency efforts to other parts of the legislative and regulatory processes are likely to elicit similar good behavior from government officials. There are manifold directions to go with government transparency. Each in its way stands to create political dynamics more congenial to good government and—more importantly—to liberty.

A Campaign Finance Lesson

The Washington Post offers an instructive campaign finance story this morning. The essence of the story: employees of banks and brokerage houses contributed more to candidate Barack Obama in 2008 than to his rival John McCain. A lot more in fact: such employees gave almost twice as much to the current president at they did to the Arizona senator.

Now, however, President Obama is attacking the banks and Wall Street for greed and selfishness, not to mention for ruining the economy. Moreover, Obama is proposing curbs on Wall Street pay and heavy regulation of banks. It would appear, in other words, that contributions don’t buy many favors with this administration.

But the story goes deeper. Wall Street is now shifting its contributions to the GOP.  That’s not surprising. In fact, being an intelligent man, President Obama must have known his attacks on Wall Street might deprive his party of contributions. Yet, he went forward with the attacks and proposed laws.

Why? In the coming election, contributions will matter a lot less than votes. Obama thinks his attacks on Wall Street will cast the Democrats as the party of “us” against the detested “them.” The votes gained will greatly outweigh the donations lost. The currency of politics is votes in the market for election.

The next time someone tells you that donations are “legalized bribery,” ask them why Obama took $18 million from Wall Street and gave them in return endless abuse and hostile legislation.

Quid pro quo, indeed.

Wednesday Links

  • Is there a place for gay people in conservative politics? We’ll be discussing it today at Cato. Watch here live at 12 PM EST.

Criminalizing Politics

Steve Poizner, the California insurance commissioner who is seeking the Republican nomination for governor, created a stir this week by charging opponent Meg Whitman’s campaign with attempting to coerce him out of the race. He said he had reported her campaign to state and federal law enforcement authorities.

What did Whitman actually do? Well, Poizner said that Whitman consultant Mike Murphy had contacted a Poizner staffer by phone and email to urge him to withdraw from the race. The email, released by Poizner, said: “I hate the idea of each of us spending $20 million beating on the other in the primary, only to have a badly damaged nominee. And we can spend $40 million tearing up Steve if we must; bad for him, bad for us, and a crazy waste to tear up a guy with great future statewide potential.” In the email, Murphy went on to suggest that if Poizner dropped out of the race before the June 8 vote, Whitman and her team would immediately get behind him for a 2012 challenge to Sen. Dianne Feinstein.

Poizner says that’s not only “strong-arm tactics” but possibly an illegal inducement to get him to withdraw. But isn’t this really just politics as usual? Don’t candidates as a matter of course say “support me this time, and I’ll support you next time” or “run for a different office and I’ll endorse you”? Presidential candidates, or their campaign managers, are often said to have promised the vice presidency to more than one rival to clear the field.

The point about spending $40 million of Republican money tearing up fellow Republicans is a pretty common complaint about party primaries. In fact, National Review correspondent John J. Miller raised just that concern about the Rick Perry-Kay Bailey Hutchison showdown in Texas.

Even during the Rod Blagojevich flap over “selling” a Senate seat, the always-provocative Jack Shafer and Jim Harper both asked, Isn’t this what politicians do? They make deals – including deals like “I’ll support your campaign if you’ll make my buddy (or me) a Cabinet secretary.” No doubt the promises are often worthless, but they still get made. Blagojevich and Murphy have reminded pols all over the country that such deals are better made in person, not via email or telephone.

Politics ain’t beanbag, Mr. Poizner. Accept the deal or reject it. But “let’s clear the field and spend our money fighting the other party” is pretty standard politics. And a darn sight better than another standard political practice, using the taxpayers’ money to bribe the voters to support you.