“A Crash Course In Congressional Mischief”: Voters Have An Entirely New Reason To Scorn Congress
After years of excoriating Congress for not legislating, Americans got a crash course Tuesday night about the mischief that can transpire when Congress actually fulfills its duties.
With both parties (for a change) committed to passing a spending bill by Thursday to avoid a government shutdown, the comprehensive legislation became a lobbyist’s delight. These omnibus last-minute bills traditionally pass Congress with virtually no debate. And since Barack Obama would never veto legislation to fund the government over minor provisions, anything small snuck into the bill is as good as inscribed into law.
Which brings us to the gem that Matea Gold of the Washington Post discovered on Page 1,599 of the 1,603-page bill. The provision — inserted in the legislation by persons unknown — would suddenly allow a married couple to give as much as $1.56 million to their political party and its committees in a two-year election cycle.
No, that isn’t a typo. Without resorting to Super PACs or taking advantage of a new loophole from the Supreme Court, couples or individuals could give roughly eight times more to their party in 2015 than they could in 2014. As election law expert Kenneth Gross told the Washington Post, “The cost of an ambassadorship just went up.”
Technically, this new giving can only go to three designated areas — convention costs, recount expenses and building funds. But while nothing is certain until regulations are written, it is a safe bet that these categories are likely to be porous. Hypothetically, funds for a new addition to the Democratic National Committee that houses the computers that contain the party’s voter files might also be used to update these registration lists. If nothing else, the parties would no longer have to take money from their general operating funds to pay for these activities.
A case can be made for strengthening the political parties in a Super PAC era. If the parties were too financially powerful in the 1990s when they were the only conduits for unregulated “soft money” contributions, now they are suffering from, in effect, being mere millionaires in a billionaire age. This is especially true as Super PACs are beginning to take on many of the traditional functions of parties like candidate recruitment, voter contact and polling.
It is worth recalling that parties are a force for responsibility and moderation in politics — since their ultimate goal is winning elections rather than enforcing an ideological agenda. Also, as ongoing organizations, the Republican and Democratic National Committees will still be around when the enthusiasms of the current generation of Super PAC donors wane or turn to art collecting and buying sports teams.
As a result, there could have been a robust public debate over the best way to fund political parties in this new electoral environment. Both Republican and Democratic party leaders — as well as the candidates themselves — should come to realize that they are the big losers when the mega-rich dominate campaigns through Super PACs.
It would have been possible to imagine bipartisan legislation in the next few years that would have traded increased legal contribution limits for enhanced disclosure of Super PAC and “dark money” spending. Or even swapped more generous giving for a functioning Federal Election Commission.
Instead Congress in its infinite wisdom decided that “dark money” legislating was a wiser solution. And blaming this one exclusively on the Republicans is probably not true, especially since the Democratic Senate Campaign Committee is currently $20 million in debt.
The result is that the McCain-Feingold legislation, signed with such high hopes 12 years ago, is now as outmoded as Morse Code. And voters (or, at least, that small remnant who still care) have an entirely new reason to scorn Congress. Quite an accomplishment for a group of stealth middle-of-the-night legislators.
By: Walter Shapiro, Brennan Center For Justice, December 10, 2014
“Risky Business”: Brinksmanship And The Return Of Financial Crisis
A government shutdown once again loomed, and familiar deadlines and ultimatums flew around Washington. And Congress just used the threat to loosen the rules created in the wake of the financial crisis, a victory for Wall Street banks in their constant and well-funded campaign against reform.
The rules they have targeted are designed to reduce the risk of another financial meltdown, like the one that drove us into the Great Recession and could have been much worse. Though the repeal has been styled by some as a technical amendment, nothing could be farther from the truth.
Think about the best way to decide legislative policy in the devilishly complex and risk-laden area of derivatives. These are the financial contracts that brought down AIG, the event that triggered the crisis. You might imagine careful deliberation and debate, leading to a thoughtful vote in Congress in which elected representatives must stand up and be counted so that they could be held responsible for a difficult decision.
Of course, that is not how the House of Representatives works, especially not the current lame duck version. A 1,600 page Omnibus Spending Bill appeared Tuesday night and passed the House late on Thursday night. We have become familiar with these spending bills that have replaced reasoned budgeting and serially risk shutdowns just so the administration can be bullied every few months.
This time around, House sponsors attached a provision amending the Dodd-Frank financial reform law. They did this in the dead of night and at the last minute. Lobbyists, who are paid to make certain that the banks can continue to do as much risky business as possible despite the new regulatory regime, pushed to have a provision repealing the “swaps push-out” section of Dodd-Frank slipped into the spending bill so that any resistance to the repeal would risk another shutdown. Citigroup lobbyists wrote 70 out of 85 lines of the original bill.
That’s Washington style representative democracy for you.
The swaps push-out provision requires banks to transact their swaps business in separate subsidiaries. The concept is that any bank swaps business should be done outside the bank itself, which is backed by FDIC deposit insurance and the many supports provided by the Federal Reserve.
Swaps are complex derivatives contracts requiring payments in the future that change as markets prices for stocks, bonds, oil and many other traded assets change. Thus, they create large and volatile financial obligations going back and forth between a bank and its contract “counterparty,” either a company (like AIG), a government or another bank.
Counterparties to the banks who rely on the banks’ performance of its obligations can rely on these federal supports and can assume that the government will step in if a problem occurs. This can embroil the government in any bank default making a bailout more likely, good news for bank creditors like the swap counterparties. To avoid this, the swaps push-out requires a separate corporation, not entitled to the federal supports, to create a firewall, insulating taxpayers from the riskiest trading.
Though swaps were regulated in Dodd-Frank, there were plenty of loopholes, so a great deal of that business will go forward just as before. The swaps push-out section now under threat was already watered down in the original Dodd-Frank deliberations. Nonetheless, it still provides important protection. With swaps push-out, there’s some possibility that the federal government wouldn’t be dragged into a bank default because of the bank safety net.
But members of Congress, urged on by big money from Wall Street, decided that this sensible buffer between casino-like derivatives trading and the American taxpayer was such a bad idea that it had to be discarded through surreptitious and disguised means.
The banks have been out to kill the swaps push-out from the beginning. That makes sense for them since the capital needed to back a subsidiary would cost them more than their basic capital. Banks can raise general capital cheaply since investors have learned that failure is not a concern for banks that are too-big-to-fail. Capital funding for a subsidiary that is separated from this safety net is more costly because a bail out is less likely.
The banks also got some of their customers who often enter into swaps with the banks to urge repeal. The customers complained that their swaps would cost more. Of course they would, since the bank subsidiary’s capital backing the swaps would cost more. But the customers, as contract counterparties, have been relying on the too-big-to-fail safety net. Like investors in the banks, these customers simply should not benefit from a pipeline to the American taxpayers. Any additional cost is an element of elimination of that benefit, nothing more.
In Washington, banks have been allowed to set the terms of the regulatory debate. The financial crisis provides many lessons, but one of its central was that allowing banks free reign leads to disastrous results for all Americans. Six years after the onset of the financial crisis, it’s too soon to forget that lesson and revive too-big-to-fail.
By: Wallace Turbeville, The American Prospect, December 12, 2014
“Congress, Deal-Making, And How The Sausage Gets Made”: If You Want Bipartisan Cooperation, This Is What It Looks Like
The closer one looks at the $1.1 trillion spending package that barely cleared the House last night, the easier it is to notice its flaws. The so-called “CRomnibus” is filled with giveaways, rollbacks, and handouts that almost certainly don’t belong there.
Kevin Drum made a compelling case yesterday that many critics have overlooked an important, big-picture detail: if you want bipartisan cooperation, this is what it looks like.
This is one of those things that demonstrates the chasm between political activists and analysts on the one side, and working politicians on the other. If you take a look at the bill, it does indeed have a bunch of objectionable features. People like me, with nothing really at stake, can bitch and moan about them endlessly. But you know what? For all the interminable whining we do about the death of bipartisanship in Washington, this is what bipartisanship looks like. It always has. It’s messy, it’s ugly, and it’s petty. Little favors get inserted into bills to win votes. Other favors get inserted as payback for the initial favors. Special interests get stroked. Party whips get a workout.
That’s politics. The fact that it’s happening right now is, in a weird sense, actually good news. It means that, for a few days at least, politics is working normally again.
I think that’s largely correct. The old line about no one wanting to see how the sausage gets made applies to lawmaking for a reason – neither process is pretty. For many Americans – including plenty of Beltway pundits – there’s a sense that Democrats and Republicans can get stuff done if they just sit in a room and agree to work out a deal.
And here we have an excellent example of what happens when the parties do exactly that.
But I think there’s one other relevant detail to this that I’d add to the mix.
While it’s never pretty when these bipartisan, bicameral talks produce a thrown-together solution, what’s a little different about 2014 is that Congress, by historical standards, really is broken to an unusual degree. The legislative branch still exists, of course, but its capacity for governing has atrophied to a level with no modern precedent.
That’s relevant in this context for one simple reason: lawmakers realized that this spending bill was an extremely rare opportunity to advance their policy goals. Some of those goals had merit, and some were ridiculous, but in either case, members of Congress saw something unusual: a shortcut.
We all know that the usual legislative process is long and arduous. It involves a series of choke points – hearings, committees, amendments, chambers, etc. – all of which make failure easy. Apply that to the contemporary Congress, which struggles to complete even routine tasks, and members understand that their proposals are almost certain to die, regardless of popularity or merit.
But if a lawmaker can get that proposal squeezed into a spending package like this, all of a sudden, the choke points disappear. If the shortest distance between two points is a straight line, the “CRomnibus” is, in legislative terms, the shortest distance between drafting and law.
To be sure, this isn’t an entirely new phenomenon, but my point is, the need to take advantage of these rare opportunities is more acute when the usual legislative process has broken down to such a farcical degree.
This was members’ only chance to advance their ideas. Are we surprised they exploited it?
By: Steve Benen, The Madow Blog, December 12, 2014
“The War On ACORN Must Never Die”: The Nonsense Is Back, Republicans Tackling Imaginary Problems
Remember the community group called ACORN? Rest assured, congressional Republicans do.
As regular readers know, I’ve occasionally marveled at the right’s preoccupation with the organization, which permanently closed its doors several years ago. As recently as two years ago, Public Policy Polling found that nearly half of Republican voters believed President Obama only won re-election because of ACORN’s interference – even though ACORN didn’t exist at the time.
Such paranoia has been especially common in Congress, where Republicans continued to insist on provisions in spending bills that blocked ACORN from receiving public funding, despite its non-existence.
All of that changed, however, over the summer, when GOP lawmakers seemed to realize it was time to move on. House Republicans finally appeared to be “throwing in the towel” in its campaign against the organization, dropping the anti-ACORN language from their spending bills. It was a bright, new, reality-based day.
And now that day is over. Zach Carter reports that the nonsense is back with a vengeance.
Fear not, America. House Republicans have resumed their war on the Association of Community Organizations for Reform Now, an anti-poverty nonprofit staffed by low-income people, a scant 4 1/2 years after the organization officially folded. […]
On Tuesday, House negotiators unveiled a bill to fend off a looming government shutdown that included the following ominous provision: “None of the funds made available under this or any other Act, or any prior Appropriations Act, may be provided to the Association of Community Organizations for Reform Now (ACORN), or any of its affiliates, subsidiaries, allied organizations, or successors.”
Remember, at present, there is no ACORN. Denying it funding is about as sensible as cutting off unicorn research.
All of which leads to the larger issue of Republicans tackling imaginary problems.
As we talked about over the summer, House Republicans also voted this year to prevent the Department of Energy from blocking offshore-drilling permits, despite the fact that the Department of Energy has nothing to do with offshore-drilling permits.
Last year, House Republicans also approved a measure to block an Obama administration policy on welfare reform that didn’t exist. Some Republicans have taken up measures to prevent the imposition of “Sharia law” on the public, despite the fact that there is no effort to impose such a policy. My personal favorite was the effort to stop the “NAFTA Super-Highway,” which never really existed outside the overheated imaginations of the political fringe and Ron Paul.
But anti-ACORN provisions remain the quintessential example of the phenomenon. When will Republicans move on? At this pace, probably never.
By: Steve Benen, The Maddow Blog, December 10, 2014
“A Walmart Christmas For Congress”: The Senate Should Cancel Its Own Christmas And Stay In Session Until 2015
Assuming Democrats and Republicans agree on a bill to fund the government by Thursday, House Speaker John Boehner has told his members that they will recess after that. Despite Senate Majority Leader Harry Reid’s annual threats to keep the upper chamber in session through the holidays, the Senate is scheduled to do the same. But it shouldn’t. Instead, Reid should keep the Senate in session until Republicans take over next year in order to confirm as many executive branch and judicial nominees as possible.
Consider the actions of Senate Republicans during the past six years. Led by Majority Leader-Elect Mitch McConnell, the GOP used the filibuster to block President Barack Obama’s nominations for key executive branch and judicial positions. In some cases—such as the nomination for the head of the Consumer Financial Protection Bureau—they refused to confirm any nominee unless Democrats made specific changes to the program. In other words, they used the nomination process as leverage to extract policy changes from Democrats. They often refused to confirm any judicial branch nominees. Sick of these tactics, Democrats changed the rules of the Senate in November 2013 so that all executive branch and non-Supreme Court judicial nominees could not be filibustered. In the 13 months since, Senate Democrats have spent much of their time confirming nominees.
That will end in January as Republicans are expected to clog up—if not seal off altogether—the nominations process. “The difference between 50 Democratic senators (plus a tie-breaking vote by Joe Biden) and 49 Democratic Senators is the difference between two full years of filling the judiciary and two years of likely gridlock,” New York’s Jonathan Chait wrote before the midterms.
Relations between the parties have only worsened since then with Obama’s executive action on immigration. In a pre-buttal to that move, Senator Ted Cruz proposed that Congress “not confirm a single nominee—executive or judicial—outside of vital national security positions, so long as the illegal amnesty persists.” It’s not clear whether Republicans will take up that strategy, or how many nominees are “of vital national security positions,” but pressure from the Texas conservative will not make the nomination process any smoother.
That’s what makes Reid’s decision about whether or not to keep the Senate in session so important. Any time spent in recess between now and when the 114th Congress begins on January 3 is time that could have been used to confirm nominees—nominees that won’t be confirmed otherwise. Lawmakers will likely object to working through the holidays. If Reid must give them a couple of days off around Christmas and New Year’s, to appease them, he should do so. But it is too important for the functioning of the executive branch and the makeup of the courts to spend the entire time on holiday.
By: Danny Vinik, The New Republic, December 8, 2014
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