Partisanship: Blame Grover Norquist, Not The Founders
Everyone recognizes that Washington is not working the way it should. This has led some on the left, like Harold Meyerson, to question whether the Founders “screwed up.”
Many on the right, meanwhile, are promoting radical changes to our constitutional system. They talk about a version of a Balanced Budget Amendment, which would require a super-majority for most changes in financial policy. This would enshrine in our Constitution the right’s do-little government philosophy.
But the Constitution is not the problem. If we want to get Washington working again, we should listen to the Founders — not blame them for problems of our own making or change the ground rules of the system of government they bequeathed to us.
True, the Founders established a deliberative democracy, with a series of checks and balances designed to prevent the majority from running roughshod over the rights of political minorities. But these checks and balances have served our nation well.
The problem is not the democratic system bestowed upon us by George Washington, Alexander Hamilton and James Madison. The problem is the additional obstacles to action – the filibuster, hyper-partisanship, and special interest pledges – that our Founders would have found abhorrent.
Our Founders struck a delicate balance between the promotion of majority rule – the essential predicate for a democratic government of “We the People” – and the desire to protect minority rights and prevent the “tyranny of the majority.” The Constitution is designed to delay and temper majority rule while allowing a long-standing majority to get its way.
So, for example, the Constitution staggers the election of senators so that only one third of the Senate can change hands in any one election. As a result, it usually takes more than one election for any one party to gain a governing majority.
Modern politicians have placed layer after layer of lard on this deliberative system of government, ultimately producing the gridlock now plaguing Washington. The Senate Republicans now use the filibuster rule as a virtual requirement. Every piece of legislation must enjoy a super-majority of 60 votes in the Senate — meaning a determined minority can permanently stop the majority from getting its way.
President George Washington, in his farewell address to the nation, warned about just such “alterations” to our constitutional system. He said this would “impair the energy of the system.”
Washington also decried political parties. He passionately warned the nation against any effort “to put in the place of the delegated will of the nation the will of a party.”
While political parties were forming and solidifying even as Washington uttered these words, our modern politicians have enshrined hyper-partisanship through tricks like the “majority of the majority” rule, whereby the House speaker will only bring to the House floor legislation that has the support of the majority of his political party.
It is hard to imagine a more powerful example of the precise party-over-country danger Washington warned us about.
Washington may have had the likes of Grover Norquist in mind when he warned that some men “will be enabled to subvert the power of the people and to usurp for themselves the reins of government.”
Even anti-tax Republicans, like Sen. Tom Coburn (R-Okla.) and Rep, Frank Wolf, have now decried the oversized role Norquist’s no new taxes pledge played in forcing the debt ceiling showdown and helping to prevent any solution that would have included new revenues. Coburn and others have warned their colleagues against putting Norquist’s “no–tax” pledge over their oath to support the Constitution and to serve “we the people” – not Norquist or any other special interests.
Washington today has serious problems, but we should not blame the city’s namesake for them. Rather, politicians of both parties should support a reform agenda designed to remove from our political system the modern procedural obstacles that have produced our current gridlock.
Maybe even in these divided political times we can all agree that when casting blame for what ails Washington, the fault it not with George Washington and our other Founding Fathers. It’s with the causes of our current gridlock – including figures like Norquist and his no-tax pledge.
By: Doug Kendall, Opinion Contributor, Politico, October 22, 2011
State Loan Program That Rick Perry Touted Had To Be Bailed Out
Gov. Rick Perry has anchored his presidential campaign to his claims of creating jobs.
With no business record of his own, Perry must contrast his ability to create jobs with public money against the records of two front-runners, Mitt Romney and Herman Cain, who tout credentials as private employers.
His GOP opponents already have sniped at his gubernatorial record, saying Perry inflates his job-creation numbers and takes credit for a business climate he inherited. Perry’s efforts to create jobs and spur agribusinesses as the state’s agriculture commissioner during the 1990s might provide even more fodder for the opposition.
Over his eight years as Texas’ farmer-in-chief, Perry oversaw a loan guarantee program with so many defaults that the state had to stop guaranteeing bank loans to startups in agribusiness and eventually bailed out the program with taxpayer money.
The state auditor panned Perry’s claims of creating jobs and criticized Perry and his fellow board members at the Texas Agricultural Finance Authority for not following their own lending guidelines.
In some instances, the auditor said, Perry and the authority guaranteed loans to applicants with a negative net worth or too much debt. Citing growing debts, the auditor finally suggested that state officials consider dismantling the program.
Even as the first alarms were sounded, Perry defended the program, saying no taxpayer money was at risk, blaming others and claiming he had fixed it.
It only got worse.
By 2002, Perry’s successor, Agriculture Commissioner Susan Combs, a Republican, stopped making loans as the percentage of bad loans neared 30 percent.
By 2009, her successor, Agriculture Commissioner Todd Staples, also a Republican, asked the Legislature to pay off the loan guarantees with a $14.7 million appropriation. The finance authority could no longer afford the $541,000 to cover the annual interest on the bad debts, almost all of which dated back to Perry’s tenure.
“It’s bad,” Staples told the American-Statesman at the time. “Unfortunately, taxpayers are on the hook for something that happened as long ago as 1987.”
In effect, Perry, as governor, signed his own government bailout when he approved the 2009 appropriations bill.
The Perry campaign did not respond to questions about whether Perry, as president, would use public money in economic development programs and what lessons he learned from his experience guaranteeing risky business loans with public money.
Mired in partisan politics
When the Legislature created the Texas Agricultural Finance Authority in 1987, the intent was to boost the state’s agricultural economy by selling state-backed bonds to guarantee bank loans to entrepreneurs who could not get commercial loans. The goal was to create small businesses and jobs by processing — rather than simply growing — Texas agricultural products.
The program immediately got mired in partisan politics, with Agriculture Commissioner Jim Hightower, a Democrat, on one side, and the Republican members of the finance authority appointed by Gov. Bill Clements on the other.
The impasse ensured that no loans were made during Hightower’s term.
In 1990, Perry campaigned on a promise to create jobs and expand the rural economy by making loans to agribusiness startups that would process the state’s agricultural products.
Clements’ appointees to the finance authority board gave Perry, a board member, sole authority to guarantee loans before newly elected Gov. Ann Richards, a Democrat, could replace them.
Under the program, the state would guarantee 90 percent of a lender’s loan — up to a maximum of $5 million — to an applicant.
Entrepreneurs lined up for money to spin cotton into yarn, process meats, develop cotton insulation, market canna bulbs to wholesale nurseries and sell pinto beans as a ready-to-eat frozen meal, to name a few.
‘This has not cost Texans money’
Perry had made four loan guarantees for $5.8 million by the time the attorney general ruled that he had to share that authority with his fellow board members. Even then, Perry and his staff drove the decisions.
Mary Webb, a Richards appointee who joined the finance authority as chairwoman in 1992, said the part-time board members had to rely on Perry’s staff at the agriculture department when screening loan applications.
“They did the legwork,” she said. “We looked at the deals to see if they fit with the legislation: Would they create jobs and help the agriculture community?”
By the time Webb left the board in 1995, she said she knew a couple of loans were in trouble. She said she learned only later the scope of the problems with other loans.
The first loan guarantees were financed by selling $25 million in bonds.
Twice, in 1993 and 1995, Perry campaigned for voters to approve more bonding authority.
Perry claimed the first two years of the program had created 4,100 jobs and pumped $390 million into the economy by guaranteeing loans to 47 companies. He predicted more than 40,000 jobs could be created with the additional bonding authority.
He didn’t mention troubled loans as he touted the program’s virtues at a 1993 Capitol press conference: “We think that this Texas Ag Finance Authority is, without a doubt, one of the finest programs that the Texas Legislature, that the citizens of Texas have ever gone forward with.”
At another stop, Perry said, “We can truly say it has not cost the taxpayers of Texas any money.”
Voters turned him down in 1993, but Perry finally won an extra $200 million in bonding authority two years later.
“This is one of the few government programs that truly has worked,” Perry said. “This has not cost Texans money.”
In January 1997, State Auditor Lawrence Alwin first alerted state officials, saying Perry and the board had violated their own lending guidelines.
He said 10 of the 48 companies had defaulted, and six more were in trouble. The first bad loans were written off as uncollectible in 1995, according to records.
Alwin also debunked a $40,000 report by a state-paid consultant claiming the program had created or retained more than 5,000 jobs at a cost of $412 per job as well as contributing $600 million to the economy.
The consultant’s data, which Perry submitted to the Legislature, were “unverifiable, incomplete, untimely, and inconsistent” and based on unrealistic assumptions about job creation, Alwin concluded.
A year later, Alwin warned that the situation had gotten worse. The program was $5.7 million in the red because of bad loans.
The issue hit the newspapers.
Perry and his lieutenants defended the program.
Deputy Agriculture Commissioner Larry Soward told The Dallas Morning News that the audit reflected a number of bad loans made early in the program to farmers and ranchers trying their first business ventures.
“The business acumen of the people behind them might not have been as strong as possible,” Soward said.
But he insisted the program would rebound: “The fact that there is a negative balance does not mean the program is in trouble.”
Perry echoed a similar refrain in a guest column in the Amarillo Daily News.
“By their very nature, TAFA loans are considered higher risk. Because of this, some defaults were inevitable and a negative balance was expected in the early years of the program,” he wrote.
He blamed the problems on “some unfortunate decisions made by the previous TAFA board early in the program.”
Perry promised the problem was fixed. “Today, TAFA is on solid footing with a positive balance projected by 2010,” he wrote.
He reminded readers that the loans were funded by debt — commercial paper: “No taxpayer money has ever been used to make TAFA loans.”
In 1998, Perry was elected lieutenant governor, and Combs succeeded him as agriculture commissioner.
She talked of expanding the loan guarantee program to other borrowers beyond food and fiber processors. But she asked Alwin to do a follow-up audit.
His warning was prescient. He said a program that guaranteed loans to people who typically couldn’t qualify for commercial loans would have a hard time finding enough good loans to generate the income to offset the losses from the bad ones.
In 2002, Combs and the agricultural finance authority bowed to that reality, suspending any new loans.
Twenty-nine of 102 guaranteed loans defaulted, almost all of them during Perry’s tenure, according to the records provided this month by the agriculture department.
While the majority of the loans were in good standing, the majority of the original $25 million — $14.7 million — was bad debt. Just as the auditor warned, the income from the good loans could not generate enough cash to make the program self-sustaining.
“We hit a brick wall,” Staples said in 2009.
By: Laylan Copelin, American-Statesman Staff, Statesman.com, October 22, 2011
The GOP’s Latest Tax Gimmickry: Soak The Poor
It’s one of the strangest things in our politics: The only “big” ideas Republicans and conservatives seem to offer these days revolve around novel and sometimes bizarre ways of cutting taxes on rich people.
Given all the attention that Herman Cain’s nonsensical and regressive 9-9-9 tax plan has received, the Republican debates should have as their soundtrack that old Beatles song that droned on about the number nine.
Now, Texas Gov. Rick Perry hopes to pump up his campaign with a supposedly bold proposal to institute a flat tax, which would also deliver more money to the well-off. Perry plans to outline his proposal this week, but he has already touted it as a sure-fire way of “scrapping the 3 million words of the current tax code.”
There is absolutely nothing new about this idea, and candidates who pushed flat taxes in the past saw their campaigns flat-line, most prominently businessman Steve Forbes in 1996 and again in 2000. Politically, the idea falls apart rather quickly when middle-income voters realize that its main effect is to cut taxes on the financially privileged while usually raising them on Americans who have more modest incomes.
Note to Perry: Voters are shrewd in figuring out whether tax proposals really benefit them. That’s why raising taxes on millionaires — the exact opposite of what Cain and Perry want to do — wins support from a broad majority.
But the more interesting question is: Why are today’s Republicans so enthralled by tax gimmicks? Their party, after all, was once innovative in thinking about affirmative uses of government. The Grand Old Party instituted the Homestead Act and created land-grant colleges, the interstate highway system, student loans, the Pure Food and Drug Act and even a prescription drug benefit under Medicare.
It was Richard Nixon who supported laws establishing the Environmental Protection Agency and the Occupational Safety and Health Administration. In signing the OSHA bill, Nixon called it “one of the most important pieces of legislation, from the standpoint of 55 million people who will be covered by it, ever passed by the Congress of the United States, because it involves their lives.” Yes, government regulations save lives, a view now heretical in the GOP.
Republicans have boxed themselves into a rejection of both their own traditions and the idea that government can do any good. Thus they have confined themselves to endless fiddling with the tax code. Almost everything conservatives suggest these days is built around the single idea that if only government took less money away from the wealthy, all our problems would magically disappear.
There is a history to this. The Republican fixation on taxes dates to the mid-1970s, when supply-side economics began taking hold. The late Jude Wanniski, an editorial writer for the Wall Street Journal who campaigned indefatigably on behalf of lower marginal tax rates, came up with the “Two Santa Clauses” theory. He argued that if Democrats earned support by giving voters benefits through government programs, Republicans should play Santa by giving people tax cuts.
Wanniski sold his tax ideas to Jack Kemp, one of the most ebullient political figures of his generation, who in turn sold them to Ronald Reagan. Reagan made Kemp’s 30 percent tax cut (co-sponsored with Sen. Bill Roth) a centerpiece of his 1980 campaign. The political scientist Wilson Carey McWilliams perfectly described the result in a 1981 essay. “After years of learning that ‘you don’t shoot Santa Claus,’ ” he wrote, “the Republicans decided to nominate him.”
But Republicans have a problem now. In the Kemp-Reagan days, they were selling across-the-board tax cuts. Most of their benefits flowed to the rich, but almost everyone got a piece. Today, many Republicans complain resentfully that less prosperous Americans don’t pay enough in taxes — overlooking the fact that citizens who don’t pay income taxes still shell out a significant share of their earnings in payroll, sales and (directly or through their rents) property taxes.
Reagan’s optimism has thus been replaced by crabby put-downs of the less affluent. Perry said it directly in his announcement speech: “We’re dismayed at the injustice that nearly half of all Americans don’t even pay any income tax.” Considering the other injustices in our society, this seems an odd and mean-spirited obsession.
“Tax the poor” is a lousy political slogan. That’s why Cain’s 9-9-9 plan and Perry’s flat tax are doomed to fail. Among conservatives, Santa Claus has given way to Scrooge.
By: E. J. Dionne, Opinion Writer, The Washington Post, October 21, 2011
How Fox News Is Really Destroying The Republican Party
Would more House Republicans rather have John Boehner‘s job or Sean Hannity’s? How many Republican presidential candidates would rather be in a Fox News studio than the White House? The wave of stunt candidates so far — Donald Trump, Herman Cain — and those who have opted out of the race to keep their TV gigs — Mike Huckabee, Sarah Palin — suggests the answer is a non-zero number. Even seemingly serious establishment candidate Tim Pawlenty has reportedly hit up Roger Ailes for a post-campaign contract (Ailes shot him down.) If the GOP‘s presidential circus this year has taught us anything it’s the allure of conservative media over Republican politics, and media seems to be winning.
Tea Partiers have two career tracks: get elected or become a pundit. And it often seems like they’re using one to audition for the other. Louisiana Rep. Tom Graves, whom his local newspaper describes as a guy with “a far noisier, more peppery style, [who has] proven quite adept at drawing free media attention,” is one of the House freshmen who, as we noted earlier, House Speaker John Boehner is having a hard time controlling, largely because the top Republican on Capitol Hill doesn’t have much to offer him. Graves, of course, is a popular guest on Fox.
Donald Trump scored a regular spot on Fox & Friends by claiming his researchers had found evidence Obama might not have been born in America. He’s not a big fundraiser, he’s not a policy wonk, and the majority of Americans don’t like him, but candidate after candidate has lined up to meet with him in Manhattan, not some farm in Iowa. Sarah Palin, too, pretended to run for president for months, only to opt to keep her day job as paid TV analyst, which she said would leave her “unshackled.” Mike Huckabee, who was in the top two in national polls for the first half of the year, decided to stay on the network having just built a nice mansion for himself in Florida. Fox cancelled Rick Santorum‘s Fox contract when he started running for president, but given that Santorum lost his last election in 2006, it might be nice to get that job back once he loses this one too. Michele Bachmann rose to prominence with her many cable news interviews, but in recent months, she’s been undone by her own unscriptedness, implying vaccines cause mental retardation just because a woman walked up to her and told her so. That might be something a conservative talk show host can get away with, but much harder on the campaign trail.
And then there’s Herman Cain. He’s going through a crisis of seriousness despite ascent in the polls, in no small part because he seems more interested in selling books than building a political organization that can win elections. At least, as he told Businessweek‘s Joshua Green, he’s not being greedy about it. “I’m still doing paid speeches,” Cain told Green, “But I have not raised my prices. This economy’s on life support, so I’m very mindful of those companies that would like to have me come and speak. But I’m not gonna take advantage of my newfound popularity just to put more dollars in my pocket.” Yet!
Is it any wonder why the only guy who seems to want the GOP’s nomination more than he wants a timeslot on Fox News is the one who’s already too rich to care about Roger Ailes’s money?
By: Elspeth Reeve, The Atlantic Wire, October 20, 2011
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