Tag: Senate

Barbarians Inside the Gate

I watched the congressional conference committee on the budget yesterday on CSPAN, and it seemed like the final fall and sacking of Rome. Two of the remaining generals defending fiscal sanity, Reps. Paul Ryan and Jeb Hensarling, pled with the invading barbarians to limit their fiscal pillaging and warned that the Treasury was empty. But the barbarians, in the form of Rep. Rosa DeLauro and others, had visions of spreading the empire’s gold widely, and were not deterred by talk of damage to future generations.

The barbarians are inside the fiscal gate. The gate is the 60-vote margin usually required for big, new spending programs to pass in the Senate. Ryan and Hensarling were right that the Democrat budget plan could be a major turning point in the nation’s fiscal history. The “reconcilation” process approved by the Democrats lowers the bill passage margin in the Senate to a simple majority. The procedure was put in place in the 1970s to control spending and reduce budget deficits. But the Democrats may try to use that budget-restraint mechanism for the opposite – to pass a massive new health care subsidy program.

Ryan and Hensarling have proposed an alternate fiscal vision, but their troops have left the field, and they will need to rebuild their armies before they can put that vision in place.

Senate Negotiates REAL ID Revival Bill with Anti-Immigrant Activists

Anti-immigrant groups have done nothing but lead Republicans off the electoral cliff, but they are very aggressive and vociferous. This has evidently convinced Senate staff to negotiate with them about reviving the moribund REAL ID Act. REAL ID lobbyist Janice Kephart reports the state of play on the Center for Immigration Studies blog.

Interestingly, the National Conference of State Legislatures may join the National Governors Association in seeking to sell state authority over licensing and identification policy to the federal government, exchanging state power for the right to beg for federal funds evermore.

I wrote a little bit in a previous post about the dynamics at play when a group that supposedly represents state interests in Washington, D.C. begins to represent Washington, D.C.’s interests to states.

Taxpayer Financing of Campaigns Returns

Taxpayer financing of congressional campaigns has returned.

Yesterday Senators Richard Durbin (D-IL) and Arlen Specter (R-PA) introduced a modified version of their public financing bill first proposed in 2007, now as then called the Fair Elections Now Act (FENA).  The older version included “free media vouchers” and discounted ad rates for television; the new model focuses more on small contributions and matching funds from the federal treasury.

These bills to finance campaigns with government revenue are often introduced in Congress and rarely make any headway, much less pass either chamber.  Their perennial failure is not difficult to understand. Members are interested in campaign finance regulations that make it more difficult for challengers to raise money.  They are not interested in giving candidates federal revenue to run against incumbents. Members are especially unwilling to fund campaigns because the public takes a dim view of  using taxes in this way.

FENA tries to avoid public opposition by creating the appearance that taxpayers do not actually fund this scheme.

As Politico reports:

In the Senate version, the public money would come from assessing the country’s largest government contractors with a small surcharge… In the House, the money would come from the sale of broadcast spectrum.

But the question should be asked: if public financing of campaigns will actually achieve all the great things claimed by its proponents, shouldn’t the public be asked to pay the bill? After all, the public can expect to receive the promised benefits. Why should the bill be financed by government contractors and the sale of public assets?

We know the answer to these questions. Durbin and Specter have to obscure the role of taxes in these schemes because the public would oppose the bill if taxpayers were on the hook for the funding. Yet the senators obscure rather than eliminate the role of the taxpayer who will have to pay higher levies to fund more expensive government contracts or to replace the money that might have been obtained from the sale of the spectrum.  Once the FENA lunch turns out not to be free, will voters feel like paying the tab?

The rationale for the new program also merits attention. In the past, advocates of taxpayer financing argued that private financing of campaigns corrupted representation, policymaking, and the general political culture.  Replacing private contributions with public financing would, it was claimed, remove private interests and end corruption.  That rationale appealed to most of the supporters of  public financing; they tend toward the left politically and had little trouble believing the Republicans running Congress – all of them – were corrupt.  But 2006 brought the Democrats back to power, and general claims of corruption no longer fit the background assumptions of both powerful legislators and supporters of public financing. So we now hear little about corruption and a lot about how FENA will free up legislators to “tend to the people’s business.”

Will “tending to the people’s business” be enough to convince Americans to spend tax dollars funding congressional campaigns at a time of record public sector deficits brought about by reckless spending on bailouts and much else?

The question answers itself.

Week in Review: No End to Spending and Regulation in Sight

Geithner to Propose Unprecedented Restrictions on Financial System

geithnerThe Washington Post reports, “Treasury Secretary Timothy F. Geithner plans to propose today a sweeping expansion of federal authority over the financial system… The administration also will seek to impose uniform standards on all large financial firms, including banks, an unprecedented step that would place significant limits on the scope and risk of their activities.”

Calling Geithner’s plan another “jihad against the market,” Cato senior fellow Jerry Taylor blasts the administration’s proposal:

What President Obama is selling is the idea that government must be the final arbiter regarding how much risk-taking is appropriate in this allegedly free market economy. It is unclear, however, whether anybody short of God is in the position to intelligently make that call for every single actor in the market.

Cato senior fellow Gerald P. O’Driscoll reveals the real reason behind the proposal:

Federal agencies have long had extensive regulatory powers over commercial banks, but allowed the banking crisis to develop despite those powers. It was a failure of will, not an absence of authority.   If the authority is extended over more institutions, there is no reason to believe we will have a different outcome.  This power grab is designed to divert attention away from the manifest failure of, first, the Bush Administration, and now the Obama Administration to devise a credible plan to deal with the crisis.

A new paper from Cato scholar Jagadeesh Gokhale explains the roots of the current global financial crisis and critically examines the reasoning behind the U.S. Treasury and Federal Reserve’s actions to prop up the financial sector. Gokhale argues that recovery is likely to be slow with or without the government’s bailout actions.

In the new issue of the Cato Policy Report, Cato chairman emeritus William A. Niskanen explains how President Obama is taking classic steps toward turning this recession into a depression:

Four federal economic policies transformed the Hoover recession into the Great Depression: higher tariffs, stronger unions, higher marginal tax rates, and a lower money supply. President Obama, unfortunately, has endorsed some variant of the first three of these policies, and he will face a critical choice on monetary policy in a year or so.

Obama Defends His Massive Spending Plan

President Obama visited Capitol Hill on Wednesday to lobby Democratic lawmakers on his $3.6 trillion budget proposal. Both the House and Senate are expected to vote on the plan next week.

obama-budget1In a new bulletin, Cato scholar Chris Edwards argues, “Sadly, Obama’s first budget sets a course for more government bloat, more economic distortions, and ultimately lower standards of living for everyone who is not living off of federal hand-outs.”

On Cato’s blog, Edwards discusses Obama’s misguided theory on government spending:

Obama’s budget would drive government health care costs up, not down. But aside from that technicality, the economics of Obama’s theory don’t make any sense.

Obama’s budget calls for a massive influx of government jobs. Writing in National Review, Cato senior fellow Jim Powell explains why government jobs don’t cure depression:

If government jobs were the secret of success, then the Soviet Union wouldn’t have collapsed, because it had nothing but government jobs. Communist China, glutted with government jobs, would have generated more income per capita than Hong Kong where, at least before the Communist takeover, there were hardly any government jobs, but Hong Kong’s per capita income was about 20 times higher than that on the mainland.

Multiplying the number of government jobs did nothing then and does nothing now to revive the private sector that pays all the bills, in large part because of the depressing effect of taxes required to pay for government jobs.

Cato on YouTube

Cato Institute is reaching out to new audiences with our message of individual liberty, free markets and peace. Last year, we launched our first YouTube channel, which has garnered thousands of views and subscriptions. Here are a few highlights:

This Is Who’s Minding the Store?

There was a revealing colloquy during President Obama’s press conference last night.

I’ve edited it for brevity, leaving in the relevant sections. See if you can pick out the most interesting tidbit. The President called on ABC News’ Jake Tapper:

OBAMA: Jake?

QUESTION: Thank you, Mr. President.

Right now on Capitol Hill, Senate Democrats are writing a budget. And according to press accounts and their own statements, they’re not including the middle-class tax cut that you include in the stimulus, they’re talking about phasing that out, they’re not including the cap-and-trade that you have in your budget, and they’re not including other measures.

I know when you outlined your four priorities over the weekend, a number of these things were not in there. Will you sign a budget if it does not contain a middle-class tax cut, does not contain cap-and- trade?

OBAMA: Well, I’ve emphasized repeatedly what I expect out of this budget. I expect that there’s serious efforts at health care reform and that we are driving down costs for families and businesses, and ultimately for the federal and state governments that are going to be broke if we continue on the current path.

[President highlights other policy priorities]

Now, we never expected, when we printed out our budget, that they would simply Xerox it and vote on it. We assume that it has to go through the legislative process. I have not yet seen the final product coming out of the Senate or the House, and we’re in constant conversations with them.

[more on policy priorities]

Our point in the budget is: Let’s get started now. We can’t wait. And my expectation is that the Energy Committees or other relevant committees in both the House and the Senate are going to be moving forward a strong energy package. It will be authorized. We’ll get it done. And I will sign it.

OK?

QUESTION: (OFF-MIKE) willing to sign a budget that doesn’t have those two provisions?

OBAMA: No, I – what I said was that I haven’t seen yet what provisions are in there. The bottom line is, is that I want to see health care, energy, education, and serious efforts to reduce our budget deficit.

And there are going to be a lot of details that are still being worked out, but I have confidence that we’re going to be able to get a budget done that’s reflective of what needs to happen in order to make sure that America grows.

Hey, Jake? The President doesn’t sign the budget resolution. Here’s one of many budget process primers you can look over.

The Fourth Estate is pretty weak on budget process, which contributes to the poor results that come out of Congress. Since the passage of omnibus legislation completing spending for this fiscal year (2009), WashingtonWatch.com has begun to highlight how the administration and Congress are falling behind schedule for fiscal year 2010. I’ve not seen anything in the mainstream media about the impending collapse of the budget process for the coming fiscal year.

Update: Jake Tapper contacted me about this post to explain that he was using the term “budget” as a shorthand for the reconciliation legislation that Congress often produces in the budget process. It’s clear to me now that Jake Tapper knows the budget process – and that he handles criticism well.

Republicans and Earmarks

This week, a handful of fiscally conservative Republican senators have been trying to cut earmarks out of the $410 billion omnibus appropriations bill. According to Taxpayers for Common Sense, the legislation contains 8,570 earmarks worth $7.7 billion.

Senator Tom Coburn (R-OK) has sought to strike specific items, like the $200,000 earmark for Tattoo Removal Violence Prevention Outreach Program in Burbank, California and the $1.9 million earmark to the Pleasure Beach Water Taxi Service in Connecticut.

Senator John McCain (R-AZ) has taken a broader approach by introducing an amendment to strike all earmarks from the bill and revert to last year’s spending levels.

Not surprisingly, they have been unsuccessful. And given recent events, one must wonder if these efforts by fiscal conservatives are even welcomed by members of their own party.

The amendments introduced by Coburn and McCain were defeated by opposition from not only by the majority of Democratic senators, but also many Republican appropriators, like Senators Thad Cochrane (R-MS) and Lisa Murkowski (R-AK).

And despite his occasional anti-earmark rhetoric and support for the Coburn and McCain amendments, Senate Minority Leader Mitch McConnell (R-KY) is one of the chief beneficiaries of the earmark-laden omnibus bill. Reports suggest he requested either $75 or $51 million for his home state of Kentucky. Either way, he will obtain far more than his Democratic counterpart, Senate Majority Leader Harry Reid (D-NV), whose earmark requests total $26 million.

Democratic Senator Claire McCaskill (D-MO) has been fairly consistent in her criticism of the earmarking process and, for the most part, has voted accordingly. Proving that Republican affection for earmarking is a bicameral phenomenon, her stance attracted ire from Representative Roy Blunt (R-MO), formerly one of the highest-ranking Republicans in House, who said he “would hope that Claire would change her mind on this,” as he praised Senator Kit Bond’s (R-MO) prowess at earmarking.

Now, earmarks make up a relatively small slice of the overall budget, but as Coburn has noted, the problem with earmarks is ‘‘the hidden cost of perpetuating a culture of fiscal irresponsibility. When politicians fund pork projects they sacrifice the authority to seek cuts in any other program.”

For more on earmarks, check out the “Corporate Welfare and Earmarks” chapter of the Cato Handbook for Policymakers.

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