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Tag: supercommittee

Playing Washington’s Inside Game

And then there were 12.

When the 435 House members and 100 senators failed in July to agree on a long-term deficit reduction plan, congressional leaders did what they often do when they don’t know what to do: They appointed a committee. But don’t sneer, for this is — cue the trumpets — a supercommittee!

Made up of only a dozen lawmakers and perfectly balanced between Repubs and Dems, this panel is to find about $1.5 trillion in spending cuts and new revenues to shrink the federal deficit. They are to come to an agreement by Thanksgiving — how’s that for a symbolic deadline? The theory is that the group will be small enough to work together across partisan lines for the good of the country, independent of the competing budgetary needs of various groups and the demands of special interests.

The problem with theories, however, is that reality has a way of intruding on their perfection. In this case, the intrusion is literal. The 12 solons will not be sitting at the table alone, for such names as AT&T, BlueCross/BlueShield, Citigroup and GE have been escorted inside by the members. They’ll not go in physically — but monetarily. For they are among the top donors of campaign cash to the 12 budgeteers, giving them an advantage over us plain citizens.

For example, Wall Streeters have invested $17 million in the campaigns of the supercommittee’s six Republicans and $15 million in the six Democrats. That pile of political money will be a screaming presence in the negotiating room, for members will be thinking about their need to get more of it for the next election and will not want to offend donors.

By the way, one of the first decisions reached by the committee members was that they would allow themselves to continue collecting campaign donations while they decide whose programs and subsidies get cut — and whose don’t. How do you think that’ll work out? Turkeys are not the only endangered species this Thanksgiving!

This is one congressional committee that’s likely to affect your life, for it’s going to decide such things as whether to whack your Social Security benefits or cut back on Big Oil’s $4-billion-a-year taxpayer subsidy. You might have an opinion about which choice the supercommittee members should make, but can you reach any of the members personally and get a chance to bend their ear? No? Too bad, because Big Oil can. And it is.

So are insurance giants, Wall Street bankers, military contractors and other corporate powers — not only because of their big-dollar campaign donations, but also because they have some very special lobbyists who’re on a first-name basis with the members. You see, these lobbyists used to work for the 12 lawmakers on the supercommittee. In all, 109 former congressional staffers have now been hired by various corporate interests to lobby their old bosses.

General Electric, for example, has eight lobbyists on board who previously were on the staffs of supercommittee members. They include the head of GE’s Washington lobbying brigade, who had been the chief of staff for Sen. Max Baucus, D-Mont. Indeed, Baucus’ Senate office seems to have been a training ground for influence-peddlers — 26 of his former aides are now lobbying him and the other 11 deficit whackers to protect the subsidies that oil, insurance and other corporations receive from us taxpayers.

As one congressional watchdog dryly notes, “It’s not like (the 12 members) are in an idealized, platonic debating society.”

Indeed not. Once again, the game is rigged for those with the money and connections to play inside. Of course, the hired guns deny any insider advantage. The former chief of staff to supercommittee member Dave Camp, R-Mich., for example, is hustling Big Pharma’s agenda, but he says flatly, “I make my case just like anyone else.”

Oh, sure — anyone else who has a top staffer-turned-lobbyist working the system for them, which leaves out roughly 99 percent of us! And they wonder why Congress and corporate lobbyists rank below E. coli bacteria in public approval ratings.

To find out more about Jim Hightower, and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate web page at www.creators.com.

COPYRIGHT 2011 CREATORS.COM

Big PACs Throw Money At Supercommittee Members

Want to get a huge influx of cash? Looks like all you have to do is be part of the supercommittee.

From the time the six Republicans and six Democrats were appointed to the special committee to reduce the deficit, suspicions about lobbyists’ influence on these politicians arose. AP reported in August that the 12 members had received more than $3 million in the past five years from special interests. Given those contributions, the supercommittee members will no doubt consider their donors’ requests instead of acting in the best interests of the general public when making their proposal.

Now, as the supercommittee continues its deliberations, new reports reveal that special interests have stepped up their efforts to influence the politicians and ensure that their sectors are not adversely affected. The watchdog Sunlight Foundation writes:

PACs for 19 of the biggest political donors in the country, as determined by Center for Responsive Politics, have reported contributing more than $83,000 to 10 of the 12 members of the super committee or their leadership PACs, Federal Eelection Commission filings show. It’s the first glimpse available of fundraising by super committee members as they wrestle with their mandate to recommend at least $1.2 trillion in cuts to the debt, increased revenues, or a combination of both.

… The totals represent just a fraction of what super committee members and their leadership PACs have raised since being named to the committee.

Rep. Dave Camp, R-Mich., raised $26,500 from PACs of the big donors, with most going to his leadership PAC, Continuing a Majority PAC. Pfizer, Goldman Sachs and Comcast all sent $5,000 checks to the fundraising committees of the chair of the House Ways and Means Committee within days of his appointment to the debt reduction panel.

Rep. Xavier Becerra, R-Calif., who was criticized when a fundraising invitation sent out on his behalf advertised his new position on the super committee, raised $15,000 from the big PACs, including $2,500 checks from the American Health Care Association and the American Hospital Association sent within days of his appointment.

Pfizer’s PAC reported the highest amount of contributions — $10,000 — to super committee members; the pharmaceutical manufacturer also donated $5,000 to Sen Max Baucus, D-Mont.

Defense contractor Lockheed Martin contributed to the most super committee members–Camp ($2,500), Rep. James Clyburn, D-S.C. ($1,000), Sen. Rob Portman, R-Ohio ($2,000) and the leadership PAC of Sen. John Kerry, D-Mass., Campaign for our Country ($2,500).

Sen. Patty Murray, D-Wash. and Sen. Jon Kyl, R-Ariz., were the only members of the committee who did not receive donations.

Considering these special interests, it won’t be surprising if military contractors, banks, and pharmaceutical companies avoid the harshest measures when the supercommittee unveils its proposal.

How Democrats Can Make Their Case For Raising Revenue

(Bloomberg) — Social Security may be known as the “third rail” of American politics, but it is the debate over taxes that has been the “kryptonite” of the Democratic Party in recent decades.

President Barack Obama has put the question of revenue increases on the front burner as part of his fiscal-policy agenda, and the discussion will grow in visibility and intensity as the early December deadline for a report from the congressional supercommittee approaches.

Although almost every expert, economist and open-minded leader in both parties (excluding, of course, the hard-line Republican leadership) agrees that we need more revenue to bring future deficits under control, the political danger for Democrats in the debate remains severe.

Indeed, one Democrat with a proven ear for politics, Bill Clinton, has expressed doubts about the administration’s decision to wade into the revenue controversy, saying, “I personally don’t believe we ought to be raising taxes or cutting spending until we get this economy off the ground.” (More recently, though, Clinton acknowledged that deficit reduction requires “adequate revenues,” scooting a bit closer to the administration’s line.)

How can Democrats tackle the tax question without courting political disaster?

Obama has tried two approaches. Last spring, when he was pressing for revenue increases during the debt-ceiling talks, his emphasis was on a “balanced approach”: If spending was to be cut, then revenue should be increased, too.

Not Balanced

The “balanced” argument was perhaps too effective. When the president reached a debt-limit deal with the Republicans that was all spending cuts and no revenue increases, he was excoriated for accepting a package that didn’t meet his own standards.

In the end, though, the argument for a balanced approach has limitations, because it requires only a mix of spending cuts and tax increases, without specifying how much of each — or both — is needed. That’s a bit like saying, “If you are going to serve liver, you should also serve Brussels sprouts” — perhaps correct, maybe even candid, but hardly compelling.

More recently, Obama has emphasized “fairness,” in particular in pushing for his proposed Buffett rule, which would raise taxes on incomes of $1 million a year or more, and with his plan to require private jets to pay a landing fee. The president has rallied his base with these populist appeals, and polls show that most Americans agree that those in the upmost tax brackets pay too little in taxes.

Fairer Package

In addition, because the bulk of the pain from spending cuts falls disproportionately on those at the bottom, tilting the revenue increases toward higher-end taxpayers would make any overall package fairer.

But the limitation of the fairness argument is that it frames the revenue increases as a penalty that should be imposed on the wealthy for paying too little. It is more of a jab at the rich than an appeal for raising needed revenue.

The argument that billionaire investor Warren Buffett should pay at least the same tax rate as his secretary fails to explain why either is paying what they are paying, or why anyone should be paying more. Even if middle-class voters are stirred by the populist sentiment behind such rhetoric, they may be unnerved by its implicit zeal to raise taxes, and the tone of the debate leaves the administration vulnerable to the usual caricatures of Democrats as overenthusiastic tax hikers.

Making the Argument

So what is a better way to make the case for much needed revenue increases?

First, the administration needs to reiterate, time and again, that tax increases — on anyone — are a last resort. This may seem like a tweak, but it is an important one. Even when voters favor mixed approaches to our ballooning deficit, more of them believe that our fiscal problems are caused by too much government spending, not too little taxation.

To avoid being burned by the tax debate, Democrats need to begin the conversation by reiterating that they support revenue increases — not because there are people who can afford to pay more, but because there is no other way to get our fiscal house in order.

Second, the administration needs to understand that this debate is playing out against a backdrop of unprecedented public doubt about the effectiveness of government spending. For political purposes, it matters little if Americans believe the government actually spent too little trying to reverse the Great Recession — as progressives such as Paul Krugman argue — or if they think government spent too much, as Republicans contend. Either way, the necessity for more revenue is being weighed in an environment that is highly skeptical of government’s ability to use that revenue wisely.

Mythical Muffins

The strong reaction to the report that the Justice Department bought $16 muffins — a story that, as should have been immediately obvious, was wrong — illustrates the depth of the public’s cynicism. The president and the Democrats must engage the tax debate with that skepticism in mind.

One approach that addresses this challenge is tying specific revenue increases to specific uses. For example, revenue from the so-called Buffett rule could be used to endow a trust fund dedicated to education reform and rebuilding our schools, popular investments in our nation’s future that are starved for resources. Revenue generated from new fees on private plane flights could be set aside to fund improvements at airports. This would neutralize arguments about “class warfare,” and remind the public of our vital shared needs.

Bush Cuts

The single largest revenue item — allowing the Bush-era tax cuts for the highest-income taxpayers to expire as scheduled at the end of next year — could be devoted to several purposes. For example, a large portion could be applied directly to paying down the debt. In other words, easing the future burden on our children, not expanded government spending.

Another dedicated use could be funding an infrastructure bank to rebuild roads and bridges, with projects selected by an independent board of governors, not elected officials.

Alternatively, a portion of the funds could be set aside for loans to small businesses to help spur economic growth; in the past, Small Business Administration loans have helped launch or grow some of the most innovative and successful U.S. companies, including Apple Inc., FedEx Corp., Nike Inc. and Under Armour Inc.

Here’s the bottom line: Tying tax increases to dedicated and popular uses insulates proposals for much-need revenue from attacks of “class warfare” or general anti-tax sentiment, and can help rebuild faith that marginal dollars collected by the government will be put to a clear and important public purpose.

Advocates of revenue increases need to develop an effective way of defending their side if they are to prevail in the contentious debate that will soon start in Congress, and in the critical election just 13 months from now.

(Ron Klain, a former chief of staff to Vice President Joe Biden and a senior adviser to President Barack Obama on the Recovery Act, is a Bloomberg View columnist. He is a senior executive with a private investment firm. The opinions expressed are his own.)

Copyright 2011 Bloomberg.

What Does Obama’s Speech Mean For The Supercommittee?

President Obama announced his $3 trillion deficit reduction proposal today, which has many on the left praising the president’s willingness to tax the wealthy and many on the right grumbling. But what does this mean for the 12 members of the “supercommittee” tasked with reducing the deficit?

Obama said in his speech today,

“I will not support — I will not support — any plan that puts all the burden for closing our deficit on ordinary Americans. And I will veto any bill that changes benefits for those who rely on Medicare but does not raise serious revenues by asking the wealthiest Americans or biggest corporations to pay their fair share. We are not going to have a one-sided deal that hurts the folks who are most vulnerable.”

This creates a tricky situation for the six Republican members of the supercommittee: All of them have signed Republican Tax King Grover Norquist’s pledge to not raise taxes under any circumstances. So if they stick to their pledge, and Obama sticks to his new promise, the supercommittee’s plan will almost definitely be vetoed.

If the supercommittee misses its Thanksgiving deadline for making recommendations to trim the deficit by $1.2 trillion within the next 10 years, automatic spending cuts will be implemented starting in 2013.

Some commentators believe the president’s speech guarantees that the supercommittee’s recommendations will not be approved. Andy Kroll of Mother Jones wrote, “Obama’s veto threat essentially extinguishes even the slightest glimmer of hope that those dozen lawmakers would reach an agreement that could pass both chambers and win Obama’s support.”

After Obama’s speech, Senate Minority Leader Mitch McConnell (R-Ky.) said, “The good news is that the joint committee is taking this issue far more seriously than the White House.”

But with such a strong veto promise from the president, many wonder whether the supercommittee’s work — however “serious” it might be — will yield any results.