Eric Cantor’s Glaring Conflict Of Interest
When Eric Cantor shut down debt ceiling negotiations last week, it did more than just rekindle fears that the U.S. government might soon default on its debt obligations — it also brought him closer to reaping a small financial windfall from his investment in a mutual fund whose performance is directly affected by debt ceiling brinkmanship.
Last year the Wall Street Journal reported that Cantor, the No. 2 Republican in the House, had between $1,000 and $15,000 invested in ProShares Trust Ultrashort 20+ Year Treasury EFT. The fund aggressively “shorts” long-term U.S. Treasury bonds, meaning that it performs well when U.S. debt is undesirable. (A short is when the trader hopes to profit from the decline in the value of an asset.)
According to his latest financial disclosure statement, which covers the year 2010 and has been publicly available since this spring, Cantor still has up to $15,000 in the same fund. Contacted by Salon this week, Cantor’s office gave no indication that the Virginia Republican, who has played a leading role in the debt ceiling negotiations, has divested himself of these holdings since his last filing. Unless an agreement can be reached, the U.S. could begin defaulting on its debt payments on Aug. 2. If that happens and Cantor is still invested in the fund, the value of his holdings would skyrocket.
“If the debt ceiling isn’t raised, investors would start fleeing U.S. Treasuries,” said Matt Koppenheffer, who writes for the investment website the Motley Fool. “Yields would rise, prices would fall, and the Proshares ETF should do very well. It would spike.”
The fund hasn’t significantly spiked yet because many investors believe Congress will eventually raise the debt ceiling. However, since Cantor abruptly called off debt ceiling negotiations last Thursday, the fund is up 3.3 percent. Even if an agreement is ultimately reached before Aug. 2, the fund could continue to benefit between now and then from the uncertainty. (One tactic some speculators are using is to “trade the debt ceiling debate” — that is, to place short-term bets on prices as they fluctuate with the news out of Washington.)
Salon’s Andrew Leonard calls the debt ceiling negotiations “Washington’s titanic game of chicken,” and the longer the game goes on, the more skittish the bond markets will become.
“Cantor’s involvement in the fund and negotiations is not ideal,” Koppenheffer said. “I don’t think someone negotiating the debt ceiling should be invested in this kind of an ultra-short. We can only guess how much he understands what’s in his portfolio, but you’d think a politician would know better. It looks pretty bad.”
Cantor spokesman Brad Dayspring noted that U.S. Treasury bonds make up a large portion of the congressman’s pension, and said investment in ProShares ETF serves to balance that investment and to diversify his portfolio. Disclosure forms indicate that Cantor has considerable personal assets, including real estate in Virginia worth up to $1 million, and a number of six- and seven-figure loans to private entities and limited liability companies. So his investment in ProShares ETF represents only a small portion of his overall portfolio — but that share could grow a little larger just over a month from now.
By: Jonathan Easley, Editorial Fellow, Salo, June 27, 2011
Democrats Must Be Adults As GOP Redefines ‘Tax Increase’
OK, this isn’t exactly asking what the meaning of “is,” “is,” but it is close.
What is a tax increase? Is it letting a previous, temporary tax cut expire and go back to the earlier tax? Is it the “closing of a loophole” to remove a favorable tax break put in place for a specific industry? Is it the imposition of a fee or the increase in a fee? Is it really anything that results in an increase in revenue?
We can go on and on here, but what we are really talking about is not an esoteric debate. If you listen to Republicans right now, particularly Rep. Eric Cantor, who picked up his marbles and went home from White House negotiations, you would think that everything is a “tax increase.”
The sad aspect of the current debate is that what many Republicans are espousing is that added revenue should be “off the table.” This is clearly a nonstarter for truly solving our problems.
It also is inflexible and holds to the absurd notion that taxes can never go up; they can only go down. That sort of reminds me of: Housing prices can only go up; they don’t go down! Hmmm…
Democrats, to be honest, have to be the responsible party when it comes to providing balance to the cuts/revenue equation. They need not fear the boogeyman crying “tax raiser!”
Americans, by large majorities, understand that the richest 2 percent of their fellow citizens have seen rapid and large increases in their wealth of late, and asking them to pay their fair share is a no brainer. Americans understand that providing huge tax breaks to oil companies already making huge profits makes no sense. Americans understand that rewarding companies for parking their profits overseas or exporting jobs is untenable, and such behavior should not entitle them to special tax “incentives.”
In short, most Americans know that adequate revenue is part of the critical balance that will create and keep jobs as well as attack our debt problem. It is not about eviscerating government and tearing apart our social fabric. Republicans as conservative as Ronald Reagan have known the meaning of a tax increase and have not hesitated to use it.
By: Peter Fenn, U. S. News and World Report, June 27, 2011
Memo To Rep Eric Cantor: Blame Is A Tricky Thing
In April, House Democrats “celebrated” the 100th day of the new Republican rule in the chamber. Most notably, Dems emphasized the fact that the GOP, despite a year of campaign promises, haven’t even considered any jobs bills, with Republicans instead preferring to waste time on pointless gamesmanship and culture war crusades.
As if to say, “Oh yeah?” House Majority Leader Eric Cantor (R-Va.) turned to Twitter to respond to the Democratic argument:
And here we are six weeks later.
Cantor said that “everything seems to be going in the wrong direction,” but denied that Republicans deserve a share of the blame for the stagnant economic recovery.
Well, Eric, blame is a tricky thing, isn’t it?
Even in April, Cantor’s argument was foolish. Indeed, by Cantor’s reasoning, job growth should be impossible. How can all of these jobs be created in the midst of Obama-induced uncertainty? And with crushing tax rates so high? And a massive debt? And with pesky regulations stifling the engines of ingenuity?
We were apparently supposed to believe that Republicans’ mere presence in the House of Representatives is enough to overcome these burdensome hurdles.
That is, until the jobs picture deteriorates, at which point, Republicans bear no responsibility whatsoever.
Heads Cantor wins; tails Dems lose.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, June 6, 2011
Joplin And Natural Disasters: They’re Called “Emergencies” For A Reason
I’ve been writing a lot this week about congressional Republicans’ new approach to disaster relief funds in large part because I find it rather amazing, even for a contemporary GOP that no longer seems capable of surprising.
For all of our differences over party, ideology, and creed, we know that when disaster strikes and our neighbors face a genuine emergency, America responds. We don’t ask what’s in it for us; we don’t weigh the political considerations; we don’t pause to ponder the larger ideological implications.
We act. It’s who we are; it’s what we do.
The problem isn’t that conservative Republicans necessarily disagree with this principle. Rather, the problem is, they place other principles above this one when prioritizing how and whether to act.
While much of Joplin, Mo., is still under rubble from a devastating tornado, conservatives in Congress are starting to argue for a tougher approach to disaster aid, demanding that any funding be offset by cutting federal money elsewhere.
Disasters will no longer be considered “emergencies” if conservatives win this battle to redefine the way Congress funds aid packages for states and cities stricken by natural and man-made catastrophes. […]
Traditionally, the government has responded to disasters — hurricanes, tornadoes, floods and acts of terrorism — by using its power of the purse to aid the affected areas with “emergency” dollars that add to the debt because they don’t count against annual spending caps.
When hurricanes Katrina and Rita slammed into Louisiana and Mississippi in 2005, a vocal minority in the House called for offsetting tens of billions of dollars of spending with cuts to other programs. At the time, House Republican leaders shut them down. But now, as much of the Southern and Midwestern parts of the country have been hit by a series of catastrophic acts of nature, that vocal minority has become a controlling majority — at least in the House.
It was House Majority Leader Eric Cantor (R-Va.) who presented the new way of looking at disaster relief. He was willing to approve a $1 billion emergency package for Southwest Missouri, but on a condition — he wanted to cut money from a clean-energy program to pay for it. His party agreed.
The callousness becomes even clearer in the larger context. If the oil industry wants taxpayer subsidies, conservative Republicans don’t blink, and certainly don’t wonder how we’ll pay for the incentives. When Wall Street needed a bailout, the entire Republican leadership was on board with writing a very large check, without much thought to fiscal responsibility.
But when working-class communities get slammed by a natural disaster, through no fault of their own, suddenly the GOP grows miserly. Republicans’ first thought isn’t, “How can we help these struggling Americans get back on their feet?” Instead, it’s, “How will we block disaster relief aid unless we get corresponding spending cuts?”
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, May 27, 2011
Blinded By The Right: Unwavering Support For Israel Hurts Wider U.S. Interests In The Middle East.
In 2003, Democrats upset about President George W. Bush’s plans to invade Iraq invited French President Jacques Chirac, an opponent of the war, to address a joint meeting of Congress. It was blatant political play, an attempt by the opposition to work with a foreign leader in offering a counterargument to the president’s invasion plans and limit his ability to carry though with his decision to go to war in the Middle East. Chirac was feted across Washington by liberal think tanks and pro-French lobbying groups as American politicians and Democratic activists fell over themselves to be identified with a strong anti-war leader.
This, of course, did not happen. The idea that Congress would openly side with a foreign leader against the president of the United States seems too far-fetched to believe. Remarkably, however, something not dissimilar happened in Washington Tuesday, May 24, as Israeli Prime Minister Benjamin Netanyahu spoke to a joint meeting of Congress (a speech interrupted more than 25 times by a rapturous standing ovation). While these types of congressional addresses are rare, this particular event is even a bit more unusual: The speech’s intention — with the full assistance and backing of the Republican leadership in Congress and implicit support of Democrats — was to give Netanyahu a public forum to offer a rebuttal to President Barack Obama’s recent proposals for moving forward with the Arab-Israeli peace process.
As the New York Times reported last week, the invitation was initially requested by Netanyahu of the GOP leadership before the president’s Middle East speech plans had even been formalized: It was “widely interpreted as an attempt to get out in front of Mr. Obama, by presenting an Israeli peace proposal that, while short of what the Palestinians want, would box in the president.” In turn, Obama’s May 19 speech was scheduled purposely so that the president could get out ahead of Bibi’s remarks.
It’s one thing for Republicans to oppose the president’s position on Arab-Israeli peace. In the hours after Obama’s Middle East speech, Republican presidential contenders like Tim Pawlenty and Mitt Romney did just that, arguing that the president had proverbially thrown Israel “under the bus.” (Never mind that Obama simply reiterated long-standing U.S. policy toward the Arab-Israeli peace process.) They were joined — in a bipartisan manner — by prominent Democrats, including Senate Majority Leader Harry Reid, in offering pushback on the president’s words.
It is certainly appropriate for members of Congress to disagree with the president’s foreign-policy agenda. But it’s something else altogether to be appearing to work in concert with the leader of another country in trying to put the president on the defensive –and seeking to score a partisan political advantage in the process. By openly siding with Netanyahu against Obama and making Arab-Israeli peace a partisan issue, Republicans in Congress are at serious risk of crossing a dangerous line and in the process undermining U.S. interests in the Middle East.
This behavior follows a concerning pattern. Last November, House Majority Leader Eric Cantor, after a meeting with Netanyahu, suggested that a Republican Congress would serve as a check on the Obama administration when it came to Israel policy (a position he later sought to walk back). In the fall of 2009, Cantor criticized the Obama administration for its rebuke of the Israeli government over the eviction of Palestinian families in East Jerusalem’s Sheikh Jarrah neighborhood. Most surprising of all, the attack was lodged from Jerusalem, where Cantor was heading a 25-person GOP delegation — an unusual violation of the unspoken rule that members of Congress should refrain from criticizing the U.S. government while on foreign soil. Former Arkansas Governor Mike Huckabee took a similar position this February while traveling in Israel. He called the Obama administration’s opposition to Israeli settlements (a position long held by Democratic and Republican presidents) equivalent to “racism” and “apartheid.”
Last week, as Netanyahu lectured Obama at a frosty White House news conference and issued statements on what he “expected to hear” from the president about his commitment to Israeli security, Republican lawmakers barely batted an eye at behavior that by any other foreign leader would spark outrage from their caucus — and instead aimed their attacks at Obama.
This seems at pace with the GOP’s default position on Israel. This February, writing in the pages of National Review, Romney stated that “Israel must now contend with the fact that its principal backer in the world, the United States, is seeking to ingratiate itself with Arab opinion at its expense.” It’s a view that no doubt would have been met with astonishment in Arab capitals, where America’s image remains largely negative. One can’t help but wonder whether the tail isn’t wagging the dog — after all, is there a reason that the United States shouldn’t seek to ingratiate itself with Arab public opinion? There is an implicit assumption here that no matter what Israel says or does the United States must continue to be blindly supportive — an odd stance for an American politician to take, particularly when Israel’s actions occasionally run counter to larger U.S. interests.
Although one cannot ignore the fact that strongly held empathy for Israel is, in part, motivating this position, there is of course a healthy dose of domestic politicking at work. Democrats have long relied on Jewish support — both electorally and financially. Republicans, though less reliant on Jewish voters, have successfully made support for Israel a litmus test for Democrats to prove their national security mettle. Moreover, with strong backing for Israel among the party’s conservative base, defending Israeli behavior has become a surefire way for Republicans to politically cater to social conservatives and evangelical voters. In fact, Israel probably enjoys more clear-cut support for its policies among social conservatives than it does among American Jews! (And Netanyahu, in particular, didn’t just fall into this love fest: He has long supported and helped spearhead the alliance between the Israeli right wing and American religious conservatives.)
All this is a very far cry from George H.W. Bush’s open conflict with Israel and the American Jewish community in 1991 over loan guarantees for Israeli settlements. That the perception continues to exist that Bush’s aggressive stance cost him severely in the 1992 presidential election no doubt haunts the Republican Party — and any American politician inclined to put public pressure on Israeli leaders.
But ultimately there is more than politics at stake here. At a critical moment in the political transformation of the Middle East, America’s steadfast and unyielding support for Israel — underwritten by both parties in Congress — risks undermining America’s long-term interests in the region. Last year, Gen. David Petraeus commented in congressional testimony that “Arab anger over the Palestinian question limits the strength and depth of U.S. partnerships with governments and peoples [in the region].” His statement provoked controversy in Washington, but ask any seasoned Middle East observer and you’d be hard-pressed to find one who disagrees with the general’s assessment. It is not Iraq, Afghanistan, or Libya which is the greatest source of anti-American attitudes in the Arab world — it is the continued lack of resolution of the Arab-Israeli conflict and the view of many in the region that the United States has its thumb on the scale in favor of Israel.
None of this is to suggest that Washington should turn its back on the Jewish state. But this is also a time when a more evenhanded position on the conflict is desperately needed — particularly as the United States will need to deal with a new government in Cairo that will likely be less supportive of Israel, a wave of unsteady democratic reforms spreading across the Mideast, and a U.N. General Assembly that appears ready to endorse Palestinian statehood this fall. These events will have serious repercussions not just for Israel but for U.S. policy in the region. Obama at least seems to realize this fact and has — albeit tepidly — challenged a recalcitrant Israel to get serious about peace. Yet Congress seems intent on restraining his leverage, effectively holding U.S. actions hostage to the whims of partisan politics — and in the process working in concert with a foreign leader to do it. At some point, it raises the legitimate question of who is looking out not for Israel’s interests, but America’s.
By: MIchael A. Cohen, Foreign Policy, May 24, 2011
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