Director of Government Relations :: Larry Hart

Democrats in the House are trying a series of maneuvers that they hope will make them look better to constituents who are in revolt over runaway spending and a massive annual deficit (latest estimate–$1.47 trillion).  Their method is to pass bills that look good but use deception that allows them to make misleading statements.  In some cases, the Republicans are going along with this game.

Today’s bill, though, has drawn strong Republican opposition.  It’s the Transportation and Housing Appropriation bill, known as THUD.  This bill actually totals $500 million less than last year.  The problem is, spending for this bill is up 38 percent since 2008. Last year alone saw a one year increase of 23 percent. This, of course, will not be mentioned in most of the stories written about the bill.  In addition, there are numerous wasteful and politically oriented programs that won’t be touched.  One example is $677 million for “sustainability and livability” programs that no one has been able to adequately define.  There is concern that these vague programs can be used to interfere with local land use and zoning decisions.

Then there is the “Transformation Initiative Program.”  This allows the HUD Secretary to take up to 1 percent from a program within HUD and create a fund to “research, capacity building, technical assistance and demonstration programs.”  Since these are not defined and there is no oversight, these monies could be used as a “slush fund” to benefit political friends.  Anyone voting for this bill (and subsequent appropriations bills) should not be allowed to get away with calling themselves “fiscal conservatives” back home.

A more disturbing gimmick was used to pass a bill on Tuesday using the “Suspension of the Rules” calendar which allows no amendments, a few minutes of debate and a two-thirds vote to pass.  It was HR 5730, labeled the Surface Transportation Earmark Recission Act.  Sponsor Betsy Markey (D-CO), a very liberal member of Congress from a conservative district, claims it will save the taxpayers money by “eliminating $713 million in unobligated funding for 309 earmarks.”  Sounds pretty good.  The problem is, it doesn’t reduce federal spending by one penny.  It takes off the books projects that will never happen.  Nevertheless, Ms. Markey sent out a news release headlined, “MARKEY SCORES WIN AGAINST WASTEFUL SPENDING.”  This bill passed 394-23. Republican John Duncan of Tennessee spoke on the floor in favor, saying he “applauded the gentlewoman from Colorado for this legislation,” although he acknowledged it will have “no impact on spending.”  Duncan noted that this bill was similar to one sponsored last week by Congressman Tom Perriello (D-VA) which also did not cut one penny from the federal budget.  Remarkably, Perriello is also a very liberal member of Congress from a conservative District.  You can expect to see more of these political gimmick bills in September and October, particularly if the Republicans don’t object.

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Dear Senator:

On behalf of the American Conservative Union, I strongly urge you to vote “NO” on the motion to proceed to H.R. 3628, the DISCLOSE Act.  Despite revisions to the House-passed bill, this measure remains what it has been from the start-a cynical ploy to affect election campaigns already in progress in the hopes that its constitutionality may not be dealt with until after November.

This bill should really be renamed the SUPPRESS Act because it suppresses free speech far beyond its stated purpose of overturning the Citizens United decision of the Supreme Court.  This bill’s supporters would have you believe that it only deals with “powerful corporations” who, under the Citizens United decision, will have “unlimited ability to pour millions of corporate dollars” into political campaigns.  In reality the greatest effect would be on issue organizations, whether conservative or liberal in nature, that happen to be incorporated, as most are.  Even local chambers of commerce and agricultural organizations could come under this regulatory regime, as may bloggers, who do not get the same protection as other media organizations.  The bill also penalizes groups that have a government contract from exercising their free speech rights.

The disclosure requirements themselves make no sense, as the top donors to any group would be “disclosed,” even if they did not fund the organization’s communications.

Despite the bills revisions, this bill still carves out special rules for unions.  As Senator Susan Collins said about the revised bill, “(it) would provide a clear and unfair advantage to unions, while shutting other organizations out of the election process or subject them to onerous reporting requirements that would not apply to unions.” So who really has the most money to spend? Federal Election Commission statistics compiled by the Roll Call newspaper show, that of the 15 organizations with a total of over $93 million to spend on the election, 14 of them are unions with a total of $81 million in the bank.

The fact is, donations to groups for independent expenditures and electioneering communications over $250 are already required to be disclosed through the FEC.  This bill is nothing less than an attempt to place a chill on groups of all persuasions who want to participate in the American political system.  Please vote “NO” on the motion to proceed to S. 3628, the DISCLOSE Act.

Sincerely,

Larry Hart
Director of Government Relations
The American Conservative Union

Director of Government Relations :: Larry Hart

On Thursday, Senate Majority Leader Harry Reid was two votes short of creating yet another $30 billion pot of money controlled by federal bureaucrats, this time a “lending fund” for small business.  But, as has often been the case, two Republicans obliged.  The two, George LeMieux of Florida and George Voinovich of Ohio are leaving the Senate next year and don’t have to answer to the voters.  The $30 billion was added to a hodge-podge of tax breaks and “enhancements” to existing small business programs.  Ironically, the bill still did not pass because these two Republicans are upset that no other amendments have been allowed to the bill and say they will withhold their further support until that happens.  So Reid punted and instead filed cloture to force a vote on the so-called DISCLOSE Act on Tuesday.  This partisan bill which passed the House overturns the Supreme Court Citizens United decision that gives incorporated groups political free speech rights and adds new draconian rules to keep these groups from being effective in the 2010 elections.  The conventional wisdom has been that with even Scott Brown of Massachusetts saying the bill is too partisan for him to support, there are not 60 votes to move the bill in the Senate.  As we have seen with these other bills, you never know until the vote is taken.

Reid and the Obama Administration did suffer their first defeat on their effort to put each sector of the economy under federal control Thursday when Reid threw in the towel on a major energy bill.  This means no carbon tax or even a renewable energy mandate for utilities.  Some type of small energy bill including new provisions on oil drilling will still be unveiled next week.  This leaves the Democrats and eight Republicans who have taken a lot of political heat for supporting the massive cap and trade legislation in the House last year in the position of supporting unpopular legislation and not accomplishing anything.

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Director of Government Relations :: Larry Hart

Although the election of Scott Brown to replace Ted Kennedy in Massachusetts nominally gave the Republicans the ability to stop bad legislation, it hasn’t turned out that way. The Democrats have been either one or two votes short of the 60 they need to move legislation and somehow one or two Republicans have always obliged. Tuesday it looked like a package of “aid to small business bills” in the Senate would pass with one provision dropped—a $30 billion “small bank lending fund” which some have dubbed “TARP III”—a very small version of the $700 billion big bank bailout. Reid had already decreed that no amendments to the bill would be allowed. But this proved to be a deception. Although the bill itself as presented by Majority Leader Harry Reid will not have the bank fund in it, Louisiana’s Mary Landrieu, who chairs the Small Business Committee, has an agreement to vote on the fund as an amendment—the ONLY amendment vote allowed. Even though the most liberal Republican in the Senate, Maine’s Olympia Snowe, opposes this provision, Landrieu says she has the 60 votes needed to pass the amendment. Supposedly, the $30 billion will “only” be used for “healthy” banks to help lending to small business, but the way most of these provisions have been written, wide discretion has been given to federal bureaucrats to decide who gets the money and what it’s used for. The two things to watch for here will be the final language of the amendment—not yet seen—and which Republicans will oblige the Democrats to get the measure passed.

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Director of Government Relations :: Larry Hart

While campaigning back home as deficit hawks, members of Congress from both parties are continuing to play games with spending issues.  The Senate Appropriations Committee, not known for its fiscal prudence, has announced with great fanfare that they are cutting a grand total of  $14 billion from the $1.14 trillion in discretionary spending Congress has control over for Fiscal Year 2011.  But even this tiny amount is deceptive.  Most of this “cut” will come from the Defense budget.  But what has happened in the past is that any funds cut from Defense gets put back in later in the year through the “emergency supplemental” bills always brought up since the start of the Iraq and Afghanistan wars. The Republican response? They want to cut $6 billion more from various programs. That’s a difference of ½ of one percent.  That’s not surprising since the senior Republican on Appropriations, Thad Cochran of Mississippi, has spent much of his career fighting conservative efforts to eliminate earmarks and cut wasteful spending.

House and Senate Democrats are each on the verge of giving up pet programs to get some bills passed before the August recess.  The supplemental spending bill for the troops in Iraq and Afghanistan has been held up for months while liberals in the House tried to add on totally unrelated domestic spending programs including a state bailout provision demanded by the teachers’ unions to keep states from reducing spending.  The Senate did not have 60 votes for this, keeping the bill in limbo and infuriating Secretary of Defense Gates.  Now Pelosi and Majority Leader Hoyer say they will try to attach this bad legislation to another bill.  In the Senate, leading senators are saying they are willing to drop a $30 billion “small bank bailout” provision touted by the Obama Administration as providing help to get credit going, but, as with the big bank bailout, leaving open the possibility of another slush fund that could be used over and over again for different purposes.  You can tell the rush to the August recess is on.

Director of Government Relations :: Larry Hart

Republican congressional leaders were on the airwaves over the weekend saying they had gotten the message from the last time they were in the majority and spent taxpayers’ money without regard to what then looked like large annual deficits.  This, they say, will not happen again.  Yet under the radar, Republicans are enabling new spending.  A case in point is a bill scheduled for a vote this evening (HR 1855) to create a new grant program under the Workforce Investment Act.  Under the suspension of the rules procedure, the bill must get a two-thirds vote to pass, giving the Republicans leverage.  There have been no hearings on this bill or on a reauthorization of the Workforce Investment Act as a whole.  Although the $2.5 million cost of the bill is petty cash in the federal budget, it seems odd that Republicans would acquiesce to any new grant program when the emphasis should be on cutting the thousands of grant programs that already exist.  The original intent of the bill was to give unions a big say in the grants but that language was changed to get Republican support. Nevertheless, it’s not hard to figure out who will get preference in the Obama Administration.

Last week, Republicans on the House Energy and Commerce gave unanimous support to a bill authored by cap and trade authors Henry Waxman (D-CA) and Ed Markey (D-MA) called the Blowout Prevention Act.   While claiming to prevent blowouts, the real aim of the bill is to reduce domestic oil production and raise the cost of energy.  The Republicans explanation for this one is that they got some changes to the bill that made it somewhat better than the original bill, but an excellent analysis by Marlo Lewis at www.openmarket.org shows the final draft of the bill still gives federal regulators life or death decision-making power over deepwater oil drilling and it’s not hard to figure out what those decisions will be under the Obama Administration.  As Rahm Emmanuel once said, a crisis is a terrible thing to waste and Waxman and Markey are seeing to it that this crisis will be used to suppress domestic energy production even more than it has in previous bills, this time with Republican support.

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Dear Senator:

Director of Government Relations :: Larry Hart

Senator Scott Brown (R-MA) who has been the Democrats’ best friend on major economic bills such as the financial services overhaul–, now scheduled to pass this week,– and extensions of unemployment and health care subsidies with no spending offsets, has refused Senator Chuck Schumer’s best efforts to lure him into being the key vote on the campaign finance bill.  The House earlier passed the DISCLOSE Act which would overturn the U.S. Supreme Court Citizens United decision which allowed incorporated groups to have the same political speech rights as individuals and then goes further to clamp down on the ability of these groups to be active in this year’s elections.  Brown says it’s too blatantly partisan even for him (unions are carefully excluded from some of the provisions) and he’ll hold fast with his fellow Republicans, at least for now.  For now, this makes it impossible for Schumer and company to get the 60 votes they need.  Stay tuned.

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Dear Senator:

On behalf of the American Conservative Union, I strongly urge you to vote “NO” on H.R. 4173, the conference report on the financial services overhaul bill.  Many changes have been made to the bill since it last passed the Senate.  Unfortunately, the heart of the bill remains the same, a massive transfer of power from the Congress to the executive branch, a power grab by federal bureaucrats to take over yet another sector of the U.S. economy with little congressional oversight.

The premise of this bill seems to be that since federal regulatory agencies made a hash of oversight responsibilities of large financial institutions’ exotic investment practices, we should invest these bureaucrats with vastly increased powers of regulation.  This bill still gives permanent bailout authority for large financial institutions deemed too big to fail.  These regulators also get to decide whether to authorize a bailout or liquidate a firm if they feel like it.  To pay for it, the bill, while eliminating a bank tax in advance, authorizes a future tax to pay for either the bailout of liquidation.

This bill creates an Office of Financial Research to accumulate data on all individual financial transactions, leaving it up to the regulators as to how much invasion of privacy this will cause.  Although these provisions have been improved in the conference report, much of the implementation of this data accumulation is still left to federal bureaucrats.

Not surprisingly, this bill is a trial lawyers’ dream, in that it creates new class-action lawsuit opportunities that would allege “price manipulation” of derivatives and credit default swaps, issues so vague as to encourage frivolous lawsuits aimed at pressuring targets to make settlements.

The law firm of Davis, Polk and Wardwell has produced an analysis of this bill showing its implementation will require 243 new rulemakings by eleven federal agencies.  Yet in its 2300 page length, there is not one paragraph that tackles the biggest problem-child of the federal government’s financial services sector, the government sponsored enterprises of Fannie Mae and Freddie Mac.

As with TARP and the federal takeover the U.S. health care system, this bill is expected to pass with very few people having read its contents, setting up another scenario of buyer’s remorse once there is time to review it.  Incredibly, House Financial Services Committee Chairman Barney Frank admitted as much by saying he plans a follow up bill to “fix” problems he has already found in it, yet urges its passage as is.

Along with its harmful provisions, this bill’s vague language is a complete abdication of congressional power to unelected federal bureaucrats.  Please vote “NO” on the conference report to H.R. 4173.

Sincerely,

Larry Hart
Director of Government Relations
The American Conservative Union

Director of Government Relations :: Larry Hart

Having held hostage funding for the troops in Iraq and Afghanistan for many weeks while they argue over how much unconnected domestic spending to add to the bill, congress has upped the ante.  Instead of $25 billion in new deficit spending, as originally proposed, the House and Senate are each insisting on $25 billion of their own pork adding a $50 billion cost to the bill.  Having already warned of the consequences to defense spending, Secretary of Defense Gates was on Capitol Hill today telling members of congress that time has run out and they must act to prevent “stupid” things from happening as he put it a few months ago.  So far this has had little effect and there has been little or no media or public outrage despite the supposedly strong feelings about spending and increasing the debt.  Keep this in mind the next time your member of congress talks about “doing something” to reduce overspending in congress.

The Senate Finance Committee will finally recognize that the country faces the biggest tax increase in its history when the 2001 and 2003 tax cuts expire on January 1.  They will hold a hearing Wednesday on the effects of tax rates on economic growth and distribution.  It will be interesting to see the liberal dominated panel explain how raising tax rates will promote growth but they will surely find a way.  The Democrats have a big dilemma in trying to prevent the most popular tax cuts from expiring while allowing capital gains and “taxes on the wealthy” stay in place.

Senators Jim DeMint (R-SC) and David Vitter (R-LA) have teamed up to offer a bill to prohibit using Justice Department funds to sue the state of Arizona over its new illegal immigration law.  The idea was to get a record vote on an amendment to a pending bill to help small business.  Majority Leader Harry Reed had claimed he would allow an open amendment process but right before the 4^th of July recess reneged and shut the amendment process down.  DeMint and Vitter still hope to find a bill they can use to offer this as an amendment.

Director of Government Relations :: Larry Hart

House Democrats are at war with the White House and the White House is at war with Senate Democrats.  Meanwhile, U.S. troops in Iraq and Afghanistan are left holding the bag.  The last chance for the House to accomplish anything before the 4th of July recess evaporated at Midnight Thursday night when Democrats insisted on challenging the Obama Administration’s prized “Race To The Top” education program.  As a result, the Senate will have to take up the bill again after the holiday recess. For weeks, the war supplemental funding bill has been held hostage by the liberals in the House that they add funding the teacher’s unions want to preserve some jobs in certain states, in effect a state bailout fund which has been shrinking from around $50 billion to around $10 billion. (There’s another $11 billion in loose change in the latest version for some other pet programs).  But those Democrats who claim to be fiscal conservatives, the so-called “Blue Dogs,” have been under more and more pressure to stop looking the other way on higher and higher spending bills, as they have for years, while at the same time anti-war sentiment in the Democrat caucus has also increased.  Speaker Pelosi and House Majority Leader Hoyer used a legislative trick now a few years old to divide the bill into two parts, one for the troop funding which the anti-war faction could vote against but Republicans would vote for and one for domestic funding which the anti-war faction can vote for but the Republicans would vote against.  Later they merge the bills when it passes the Senate.  It worked again, but barely as 38 Democrats opposed the procedure and it only passed by a vote of 215-210. (Six Republicans and two Democrats didn’t show up for the vote).  The problem is House Appropriations Chairman (D-WI), known for his fierce temper and who has already announced his retirement, satisfied the “Blue Dogs” by taking money from the “Race to the Top” education funds.  This drew a veto threat from the White House and the House, not knowing what the Senate would do on this issue, suspended action and adjourned for 12 days.  The Senate, for its part, has suddenly found itself playing the part of the more responsible body on spending, passing a bill that had few of the goodies included in the House version, which allowed them to pass their version of the war funding bill with considerable Republican support.  This has also made the White House unhappy, as they are looking for ways to satisfy their union supporters and big city mayors looking for extra money this year.

Meanwhile, the deadline set by the Pentagon for getting the funding passed will be missed with the August recess deadline seen as the latest they can go without harming other programs.

Oh yes.  Included in this package is a budget allocation for Fiscal Year 2011.  For the first time since the budget act was passed in 1974, the House will not pass an actual budget resolution that sets priorities for the next five years, despite the Democrats huge majority.  It will be tough for incumbents to have find accomplishments to talk about this Fourth of July, but a Happy Independence Day to you from all of us at ACU.

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Director of Government Relations :: Larry Hart

Despite President Obama’s fist pounding over Republican opposition to the bill giving enormous control of the private financial sector to government bureaucrats, only three House Republicans broke ranks Wednesday to vote for the final version which sailed through on a vote of 237-192.  All three, Mike Castle of Delaware, Walter Jones of North Carolina  and Anh Cao of Lousiana, had voted “No” the first time around.  Meanwhile, seven Democrats flip-flopped from “No” to “Yes,” all with different reasons for doing so. Four of the seven have difficult races for re-election—Baron Hill, Kurt Schrader, Zack Space and Harry Teague, while three are liberal veterans, Solomon Ortiz, Dennis Kucinich and Pete Visclosky.  Despite the House win, the game plan completely fell apart for the week.  The idea was to sweep the bill through the House and Senate in two days and announce the “triumph” over Wall Street during the Fourth of July recess. First, Senator Robert Byrd passed away, then their elimination of a $19 billion bank tax that angered the three moderate Senate Republicans who voted for the bill the first time only succeeded in switching Susan Collins of Maine. Maine’s other senator, Olympia Snowe, and Scott Brown of Massachusetts played harder to get.  I should add that Nebraska Democrat Ben Nelson, pilloried for playing both sides during the health care debate, is consistently voting with the Republicans on spending issues these days.  So Majority Leader Harry Reid was forced to give up on that until the week of July 12.

Both sides also refused to budge on an extension of unemployment insurance. The Democrats refused to “pay” the cost by using unspent stimulus funds and Republicans refused to end their filibuster while the bill still increased the deficit.  Even the offer of Ohio Republican George Voinovich, retiring this year and not interested in any battles,  to vote for a bill “half paid for” was turned down, making it obvious that the Democrats felt they were better off talking about Republicans being “mean” to the unemployed than  actually doing anything for them.

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