Bolstering the I.R.S.

        Robert A. Levine    5-14-12

 With federal budget deficits and the national debt as major problems for the country going forward, why have Republicans been unwilling to fund more I.R.S. agents to pursue tax cheats and increase federal revenue? The 2012 Obama budget asked for an increase in funding for the agency, much of which would have been dedicated to hiring more agents and enforcement initiatives. However, Congress in its infinite wisdom instead cut the I.R.S. budget, forcing the agency to offer buyouts to over 5000 of its employees.

 A report by the internal monitor of the I.R.S. in January noted that the cuts in funding and an increased workload made the agency unable to adequately collect taxes or provide reasonable service to the public. In fact, staff reductions resulted in an inability to obtain billions of dollars annually owed to the government, but not paid. One estimate from I.R.S. data had tax cheating costing the federal government $3 trillion over the last decade. In addition, every tax filer has to pay an extra $2200 to the government to compensate for those taxes that are evaded. The great bulk of the tax avoidance is by wealthy individuals or small businesses. If with more agents I.R.S. audits rose significantly, much of the money now owed could flow into federal coffers, a good deal of it voluntarily through tax dodgers’ fears of being caught.

 The recent GOP House budget proposal emphasized cutting tax rates, while closing loopholes and deductions, but did not provide the I.R.S. with additional help to improve enforcement of the current tax laws. And in a cynical maneuver, the loopholes and deductions to be ended were not specified in the GOP bill, so that no estimate could be made of whether the revenue generated would be equivalent to what was lost with the tax cuts. Last year when the additional money was requested for the I.R.S., one Republican Congressman declared that no money would be forthcoming for “I.R.S. goons.” This is emblematic of the way many Republicans view the I.R.S; an agency whose powers should be reduced rather than expanded. And when service from the I.R.S. is not up to par, citizens’ hostility to the agency grows, which is probably what Republicans want.

 One would think that in this time when shrinking the federal budget deficit is so important to both parties and the electorate, the idea of collecting more money from tax cheats would be a no-brainer for the deficit hawks in the GOP. Not only would it bring in additional revenue to reduce the deficit, but it’s also an issue of fairness for those who pay their share. And getting it done would be relatively painless. Do Republicans hate the I.R.S. so much that they are willing to let fraud go unpunished and tax-evaders keep their ill-gotten gains?

 Republicans appear to be hostile to anything that has to do with taxes. While there’s little question that the tax code needs changing, the tax laws now in place need to be maximally enforced for the good of the nation. This should be done independently of cutting taxes, or reform of the tax code.

 Resurrecting Democracy
www.robertlevinebooks.com

Dysfunctional Washington- What Does the Future Hold?

                   Robert A. Levine   5-3-12

With the vast majority of Americans disgusted with Washington and polls showing that Congressional approval rates are in the toilet, can we anticipate that the discourse might improve in the future? Can we expect that politicians will take citizens’ displeasure to heart with positive steps to improve the atmosphere in Washington, so that the important business of the nation can be accomplished? Unfortunately, the answers are no and in fact it is more likely that the political climate will deteriorate in the years ahead.

A recent article in Politico by Charles Mahtesian and Jim VandeHei spelled out the reasons why the situation appears so bleak.( http://go.politicoemail.com/?qs=67d22cc68366780fe484783c07fb312183a2b7697dbdc4f50575b972c7aae470) Basically, it’s the loss of centrists and moderates on both sides of the aisle with greater polarization in both the Senate and the House. Whereas twenty years ago, 40% of Senate Republicans were considered moderate, barely 10 % can be so-labeled today. In the House, it was 30% twenty years ago and almost none currently. Similarly, moderate Democrats now constitute 12% of the party in the House versus 35% in 1989. Moderate Democrats in the Senate are 15% compared to 27% 20 years ago.

The refusal of Tea Party activists to support any Republican who is not to the extreme right of the political spectrum has resulted in moderate conservatives being shunted aside in Republican primaries or having to retire. And right-wing conservative Super PACs, from outside the contested state or congressional district, with vast sums of money since the Citizens United ruling, have supported the most partisan candidates with attack ads. To make matters worse, the candidates being skewered cannot respond effectively to these ads, as they don’t have the financial resources to mount a defense.

Centrist Democrats have also gone down to defeat or retired, with the liberal wing of the party and organized labor going after incumbents who have not hewed to the party line, particularly in regards to health care. This is particularly true in the House where Jason Altmire and Tim Holden were just defeated in Pennsylvania Democratic primary races. The list of moderate Democrats Senators not running for re-election include Ben Nelson of Nebraska, Joe Lieberman of Connecticut, Kent Conrad of North Dakota and Jim Webb of Virginia.

Republican moderate Susan Collins of Maine is also retiring along with moderate conservative Kay Bailey Hutchinson of Texas. The reasons for all of these retirements include the partisanship in Washington and the inability to legislate effectively. In addition, there’s the fact that campaigning opens up moderate candidates to blistering attack ads, often personal in nature, augmented by Citizens United Super PAC money. As examples of internecine combat in the Republican Party we just have to look at the battles Oren Hatch of Utah and Charles Grassley of Indiana are going through, because these long time conservatives are not deemed conservative enough by extreme elements in their party. Interestingly, Oren Hatch received a 100% rating from the American Conservative Union and the Chamber of Commerce in 2010, but that isn’t considered adequate by the far, far right. Maybe it’s the fact that in the past, they were willing to talk across party lines and were even cordial at times to Democrats.

The loss of moderates in the House and Senate are going to make compromise on any issue more difficult to accomplish, and the atmosphere in Washington is bound to become even more toxic. Perhaps the saddest aspect of the current political climate is the fact that the moderate middle, including independents, moderate Republicans and centrist Democrats, has no bloc to represent their views, despite the fact that they are the largest percentage of voters.

 To change the political environment so that government can function again, campaign financing reform, including limitations and transparency on Super PAC donations is necessary, despite the Citizens United ruling. Perhaps it will take a constitutional amendment, but it must happen if American democracy is to prosper. And the way both the Republicans and Democrats have evolved over the past several decades, it is evident that a third party of the center is needed to represent the moderate middle and bring common sense and compromise back to Washington. Neither of these remedies will be easily accomplished, since both current parties and the deep pockets behind them will fight fiercely to keep these prescriptions from being realized.

 Resurrecting Democracy
www.robertlevinebooks.com

Turning Back the Clock Politics

                    Robert A. Levine   4-19-12

The gridlock in Washington and the difficulty Congress has in passing significant legislation does not require intricate analysis and pontificating by pundits over its cause.

Conservative initiatives that would have Americans live in the past are the main divide between conservatives and liberals or moderates. It’s the reason conservatives want to expel moderates from the GOP whom they label as RINOs (Republicans In Name Only). The more conservative a politician is, the more he or she sees the past through rose-colored glasses and wants to move America back in time. They want to go back beyond the Great Society of Johnson, the New Deal of Roosevelt, and even measures favored by Nixon such as the EPA.

Examining conservative stances, their love affair with the past becomes readily apparent. Smaller government and lower taxes head the list. This is in disregard of globalization and the problems raised, the complexity of citizen’s lives, the need for an adequate safety net, protection against external and internal enemies, a suitable infrastructure for the nation, food, drug and environmental monitoring, safety standards for air travel and automobiles, allocating the wireless spectrum and off shore drilling, and numerous other functions of government in the modern world. Conservatives would like to shrink the federal government’s role and spending in virtually all of the above areas, except for the military.

As for lowering taxes, America’s marginal income tax rates are among the lowest they have ever been and among the lowest in the developed world. During the early 1950s through 1963, the marginal tax rate was above 90%, and as recently as 1979 it was 70%. In moving the nation back past the New Deal, conservatives would probably be happy with the income tax rate of 7% that was in place in 1913.
And conservatives want government to be less intrusive in people’s lives, except when it comes to hot-button issues of importance to them, such as a woman’s right to choose and same-sex marriage. This really has to do with religious beliefs and government should not be involved in regulating these areas. However, many conservatives would like the wall between government and religion to be torn down and for policy to be concordant with religious practices. Perhaps they would feel more comfortable in the Massachusetts’ colony in the 17^th century, when religion and government walked hand in hand, controlling people’s lives.
Conservatives also do not think contraceptive coverage should be an expected part of health insurance since this could lead (God forbid) to women’s sexual freedom and possibly sexual relationships outside of marriage. Better that America should go back past the 1960s, before oral contraceptives became widely accepted and state laws banning the sale and use of contraceptives were overturned by the Supreme Court. And conservatives believe a woman’s place is still in the home with the man as the breadwinner for the family, with no need for equal pay for equal work laws.

There’s also the “old West” model of society that conservatives promote; every citizen packing guns and standing their ground against whomever they see as miscreants. There’s no acknowledging the danger of weapons in an overwhelmingly urban nation and that weapons should be limited to hunting, sport shooting or home protection.

Their rejection of scientific information take us back in time as well, with an unwillingness to accept evolution, the “big bang” theory or global warming, and a desire to teach non-science in the classroom.
In addition, conservatives are suspicious of America being corrupted by foreign influences. This may be one of the reasons for their adamant opposition to sensible immigration reform, besides the economic grounds and possible racism. The overwhelmingly WASP nation that existed around the time of the revolution would probably fit the bill for them.

Unfortunately, the Supreme Court is currently dominated by conservatives who hold many of the above views and would like to take America back to a simpler and more freewheeling time of robber barons and gunslingers.

If conservative ideology becomes more ascendant in the future, America will indeed be returned to a previous era, its stature in the world eroded, economic inequality heightened, and the gains women have made rolled back. Perhaps if the electorate truly understood how conservative policies would change the nation, America might remain in the present with a brighter future.

Resurrecting Democracy
www.robertlevinebooks.com

Beware of What You Wish For- Big Business and the Republican Congress

           Robert A. Levine  3-29-12

 In the realm of beware of what you ask for…was the desire of Big Business and its lobbyists, including the Chamber of Commerce, to elect a Republican Congress in 2010, providing millions of dollars that went to support GOP candidates. According to a New York Times article, “the return on investment has not always met expectations.” (http://nyti.ms/Hm2k9s) This may be somewhat of an understatement.

 Instead of pursuing legislation that would aid American businesses, enhance economic growth and reduce unemployment, Republican members of Congress have blocked these measures despite the fact they’re supported by corporate lobbyists and pro-business groups. The recalcitrance of these Republican members of Congress stems from their desire to reduce all government spending and cut the size of government. The two measures currently in limbo that businesses would love to see enacted are the transportation bill and authorization for the Export-Import Bank. The virulently anti-tax group, the Club for Growth, whose more appropriate name should be the Club for Stagnation, is opposed to this legislation, and many Republican members of Congress are taking their cues from them. A spokesman for this organization noted “Free market is not always the same as pro-business.”

 Though a ninety day extension of the highway transportation trust may be enacted by the House shortly, businesses say that long-term funding is required to start new infrastructure projects that would boost employment and the economy. It is possible that 1.5 million construction workers may be laid off unless funding is authorized. Collection of gasoline taxes would also be stopped, $110 million daily, the money probably going to the oil companies, never to be collected by the government. Speaker Boehner had previously promoted a $260 billion five year bill which was blocked by the Republican caucus and the Senate has already passed a version of the bill with bipartisan support. Currently, the federal government funds transportation spending to the tune of $51 billion annually, with each billion responsible for 30,000 jobs.

 The Export-Import Bank lends money to foreign entities to purchase American products and has been an important factor in American sales abroad since 1934, its charter due to lapse in May. U.S. exports have been thriving during the economic recovery. However, American goods would be at a competitive disadvantage without Export-Import Bank financing as other countries are willing to provide this kind of backing for their exporters. The Club for Growth opposes the Bank as an anomaly in the free market system, wanting lending to be a private function and unwilling to support the Bank as a necessity when other countries employ their funds to undermine our exporters. Rigid ideologues can not fathom pragmatic solutions to problems, dealing only in absolutes. The president of the National Association of Manufacturers, who contributed significant sums to Republican candidates in the last election cycle, had harsh words for opponents of the Bank, but these may fall on deaf ears.

Whether the extreme right-wing conservatives will eventually relent and support these two bills in the House remains to be seen. The American economy will lose if they do not, with both business and workers suffering.

Resurrecting Democracy
www.robertlevinebooks.com

Congress and Corruption- Hand in Hand

                                    Robert A. Levine    3-22-12

 The number of cases of corruption and ethics transgression involving individual members of Congress over the years has helped contribute to the abysmal ratings of America’s national legislative bodies in the eyes of the public.  However, the extent of self-dealing, along with personal and family enrichment by these elected representatives of the people is given transparency by a 346 page report by CREW, Citizens for Responsibility and Ethics in Washington.

Instead of going to Washington to serve their constituents, it appears that the majority of the members of Congress are going to the Capitol to serve themselves. With a detailed examination of the records of each House member during the last two election cycles, Crew was able to show that over half of them or their families profited through their offices. Crew analyzed “campaign spending, budget earmarks, office accounts and lobbying by any relatives.” They found an extraordinary amount of money was generated by Congressional members for themselves or relatives through “creative accounting, self-interested budgeting and generous expense reimbursements.”

Numerous examples are given involving members of both parties in an article in the New York Times (http://nyti.ms/GHSE7C). It can at least be said that while passing laws in a bipartisan manner is close to impossible, gaming the system is an accepted bipartisan enterprise.

Though this thorough analysis of Congressional members only involved a four year period, this kind of behavior has been going on throughout the institution’s history and is common practice. The public has forgotten the House Banking Overdraft Scandal of the late 80s and early 90s in which hundreds of members of Congress issued 20,000 bad checks for $10.8 million dollars without any penalties or fees. Among the prominent perpetrators were Republicans Dick Cheney, Newt Gingrich, and the Democratic House Speaker at that time, Tom Foley. (A more detailed account of this scandal can be obtained by downloading a free addendum to my book Resurrecting Democracy from my website http://www.robertlevinebooks.com/ – A History of Political Corruption Through 1992)

Forget transparency! Forget ethics! The sad part of this recent revelation by CREW is that many of these practices by House members are not illegal and do not violate House ethics rules. As long as the two parties play ball together in terms of allowing members to enhance their incomes in any way possible, even though they won’t play ball legislatively, little can be done to change the rules or make them act in a less self-serving fashion. This is more reason to consider the formation of centrist third party whose members come to the plate clean and make ethics reform in Washington a central tenet of their beliefs and action.

 Resurrecting Democracy
www.robertlevinebooks.com

A Pox on Both Your Houses- A Sudden Burst of Bipartisanship

                        Robert A. Levine   3-19-12

With public approval of Congress at 10% or below in a number of polls, and with voter wrath directed at incumbents, members of Congress and Senators are starting to realize they have to do something to improve their status in the eyes of the electorate. They are even considering (gasp!) passing two bills on a bipartisan basis and approving stalled judicial nominations. This is not being done in the spirit of compromise and because partisan rancor in the two houses of Congress has suddenly evaporated. It is an effort to show the American people that Congress is not completely dysfunctional and that the two parties can work together on occasion to pass needed legislation.

However, this Kumbaya moment sounds better than it actually is, with intra-party squabbling and inter-party conflict over some of the issues still unresolved. The two bills being considered in the House and Senate are a transportation bill and the JOBS Act (Jumpstart Our Business Startup Act). Unfortunately, the transportation bill passed by the Senate, differs from the one passed by the House and the differences have to be reconciled, a task that may not be so easy. Among other problems, the House bill would eliminate guaranteed funding for mass transit, which would hurt America’s cities and force commuters to pay higher fares.

Under President Reagan’s aegis in 1982, Congress allocated 80% of highway trust revenues to highways, bridges and tunnels and 20% to mass transit. This formula has remained in effect until now. But under the House bill, all revenue would go to highway projects, with a one time payment of $40 billion spread over five years that mass transit would share with other transportation initiatives. Revenue for the $40 billion would supposedly come from off-shore oil and gas drilling leases. The Senate bill keeps the current formula in place, but it’s only for a two year period. And Senate provisions to fund the bill, a pot-pourri of measures that have been criticized as unrealistic, uses ten years of revenue to pay for the two year program. House Speaker Boehner has been under pressure to bring the Senate bill to the floor in the House, as a number of construction jobs would be generated if it passed. But he would have to override objections from the most conservative members of his party to get the legislation enacted and prove to the public that Congress is not in perpetual gridlock. The right-wingers want to include drilling in the Arctic National Wildlife Reserve in the bill and cut total spending.

The JOBS Act, which was passed overwhelmingly in the House by both parties, will be debated in the Senate this week and may run into trouble there. Regulations from Sarbanes-Oxley and Dodd-Frank that curbed predatory behavior by investment bankers would be overturned if the JOBS Act were passed in its current form. The bill, a conglomeration of measures, would cut oversight on new companies going public, reducing consumer protection. Companies would be allowed to raise money through social media over the Internet without filing the standard disclosures. Small investors would be able to be solicited, many of whom are not sophisticated enough to properly evaluate the offerings. Auditing restrictions for small companies moving towards an IPO would also be loosened. In addition, the law would allow investment bankers to publish research on companies whose IPOs they are underwriting, a practice that is now banned since it previously led to abuses. SEC Chairman, Mary Schapiro, in a letter to the Senate Banking Committee noted that the provisions of the bill would weaken protection for small investors and would reduce market transparency. A number of Senate Democrats want to amend the bill to enhance consumer protection, but Senate Republicans led by Mitch McConnell want to see it passed as is. Increased funding for the Export-Import Bank, which helps American company sales overseas, is also a source of conflict, as some Senate Democrats and Republicans want to tie it to the JOBS Act and some Republicans want to eliminate the agency completely.

Nothing ever seems to go smoothly in the two Houses of Congress, even when there are attempts to show Americans that bills can get passed in a bipartisan manner. Good luck.

Resurrecting Democracy
www.robertlevinebooks.com-

The DISCLOSE Act- Antidote to the SuperPACs?

                                                            Robert A. Levine   2-17-12

Most citizens paying attention to the current Republican presidential primaries would agree that the new power of the SuperPACs following the Citizens United decision by the Supreme Court two years ago is undermining the democratic process. By allowing unlimited contributions to these organizations by individuals, corporations, unions and other entities, the voices of ordinary Americans have been drowned out by advertising spawned by special interests.

 Though the Citizens United ruling by a 5-4 decision of the Court was purportedly to enhance freedom of speech, it has greatly tilted the political playing field in favor of the wealthy. And Republican candidates have benefited disproportionately. The pro-Romney SuperPAC, Restore Our Future, collected $18 million from two hundred donors in the second half of last year, with 10% of America’s billionaires contributing. Newt Gingrich’s SuperPAC, Winning The Future, received $10 million from hotel and gambling magnate Sheldon Adelson and his wife. Foster Freiss, a wealthy investor, is the main backer of Rick Santorum’s SuperPAC, the Red, White and Blue Fund. With no financial or other restrictions, the SuperPACs have concentrated on negative advertising, using attack ads that bend the truth to tear down opponents. Obama recently reversed his stand on SuperPAC funds to try and bolster his own fundraising to compete with the Republican organizations.

The advent of the SuperPACs promises to make the 2012 election the most expensive and most negative in history, notwithstanding the electorate’s disdain for these ads. Political strategists employ them because they work. And since the SuperPACs are supposed to be independent of the campaigns, it allows the candidates deniability for the mudslinging.

How can America control the growth and power of these SuperPACs that allow the most affluent individuals and corporations to dominate the political dialogue? Though Citizens United could be overturned by a constitutional amendment or a change in the composition of the Supreme Court, neither of these is very likely. However, increasing the transparency of the SuperPACs could have a significant effect. Donors might be more reluctant to contribute knowing that they and their businesses would be open to scrutiny if their names were promptly revealed. It would also show voters where the candidates were generating support and stockholders where their money was going.

The DISCLOSE Act (Democracy is Strengthened by Casting Light on Spending in Elections) was originally introduced in 2010. It was passed by the House and blocked by Republicans in the Senate on a party-line vote. Though most of its provisions appear to be common sense in a democratic system, the problem with the bill is that it was formulated by Democrats; Schumer, Leahy and Whitehouse in the Senate and Van Hollen in the House. It has been recently reintroduced, but without any bipartisan support, it is virtually dead on arrival in both Houses of Congress.

Among the important provisions of the DISCLOSE Act-

Would require explicit disclaimers for political ads- the top fund raiser would have to issue a disclaimer standing by the information given, similar to what candidates currently must do. And the five top donors to the organization would be listed on the screen at the end of the ad.

Corporations receiving federal contracts worth more than $50,000, foreign corporations, and companies that have not paid back their TARP money would be banned from spending money on federal elections.

The act would also require that donors of $10,000 or more be revealed within twenty-four hours, which would go a long way towards transparency.

Though the DISCLOSE Act has been opposed by the ACLU as well as Republicans as an infringement on free speech and privacy, it seems reasonable to have people and organizations who sponsor political advertisements stand behind their messages. It’s merely truth in advertising and anonymous negative ads have no place in our democracy.

In terms of political advertising in America (and everywhere else), it’s obvious that- money talks; always has and always will.

Resurrecting Democracy
www.robertlevinebooks.com

Weakening the STOCK Act- Stock and Trade of the House Republicans

                           Robert A. Levine

Once again, House Republicans have been unwilling to take a strong stand against insider trading. Though a revised version of the STOCK Act (Stop Trading On Congressional Knowledge) was passed yesterday by the House by an overwhelming margin, it was only after Republicans had weakened the bill. In December, Republican Spencer Bachus from Alabama, Chairman of the House Financial Services Committee postponed voting on a bill that would have prohibited insider trading by members of Congress. This was despite the fact that the bill had over a hundred co-sponsors and overwhelming public support. Today the Washington Post reported today that Bacchus is under investigation by the Office of Congressional Ethics for possible insider-trading violations. How’s that for having the fox in the henhouse?

 In the current bill, Republican Representative Eric Cantor of Virginia and the House Republican leadership eliminated a provision  that would have regulated the collection of intelligence gleaned from political insiders; ie members of Congress, senators and other federal officials. This valuable knowledge can be passed on to hedge funds, mutual funds and other financial industry personnel who use it to determine investment strategies. The Senate had previously approved the bill with a provision that required “political intelligence consultants” to register as lobbyists and divulge their activities. Republican Senator Grassley of Iowa, who had crafted the amendment on political intelligence, was quite angry over the House Republicans’ actions, saying- “It’s astonishing and extremely disappointing that the House would fulfill Wall Street’s wishes by killing this provision.” But Congressman Cantor wanted further study of the issue by the Government Accountability Office which could delay action for up to a year.

 According to Democratic Representative Louise Slaughter of New York, one of the originators of the STOCK Act, Wall Street and those involved in the political intelligence industry had been lobbying against the Grassley measure. They were concerned that the required registration would have compelled transparency from investment advisors regarding clients to whom they transmitted political intelligence. And Wall Street and their lobbyists were successful in their efforts to gut the bill of the troublesome provision.
 Once again, ethics has taken a back seat to Wall Street’s needs and political expediency. What’s new?

 Resurrecting Democracy
www.robertlevinebooks.com