A piece of history that's working against Joe Sestak on Tuesday is that, true to the pattern for the past 60 years Pennsylvania will be electing a Republican governor.
For the past 60 years, the voters in Pennsylvania have changed the party in the governor's mansion every eight years, like clockwork. Ed Rendell, a Democrat, has served his eight years, so it's time to elect a Republican governor, and that would be Tom Corbett.
And vote-splitting takes extra effort, so a voter who votes for a Republican governor is more likely to vote for a Republican senator.
Sestak could still be elected to the Senate even if Tom Corbett is elected governor, but it will be a little bit harder, and in a close election that little extra edge could make a difference.
Sunday, October 31, 2010
Sunday, October 17, 2010
Trickle-Up Economics
I suffer from a certain amount of cognitive dissonance every time I hear a conservative politician or pundit talk about the need for tax cuts for the wealthiest 2% of Americans in order to stimulate the economy. What I hear on the news almost every night is that the biggest factor driving the economy is consumer spending, and that they economy is not recovering because consumer spending remains weak.
So, if lack of consumer spending is the problem, the solution should be policies that give consumers more income to spend, right?
No, the mantra from the right is that we need more money in the hands of wealthy individuals and businesses. Of course, the very meaning of "wealthy" is having more income than you need to spend, which means that increasing the disposable income of the wealthy does not increase consumer spending but simply makes the wealthy wealthier. Investments in plants and equipment would also help the economy, but businesses are investing now because the economy is so bad (the kind of self-reinforcing behavior that makes "boom and bust" cycles work), and most investors are not putting their money into new businesses creating new jobs but into government securities, which is why interest rates are so low.
During the Reagan years, the belief that reducing taxes for the rich would stimulate the economy was called "trickle-down economics." But if consumer spending is the issue, then what we really need is trickle-UP economics. We need to adopt policies and programs that put more money into the hands of the lower economic levels where it will translate into consumer spending and economic growth for the entire economy.
The following chart presents empirical evidence of this truth also. This chart was originally published by Slate and it shows the income growth of different income levels during Republican administrations and Democratic administrations based on data compiled by Princeton political science professor Larry M. Bartels.
The chart obviously shows what it was intended to show, which is that the policies of Democratic presidents cause greater economic growth among the lower income levels, while the policies of Republican presidents promote more growth at the higher levels and less growth at the lower levels. But there's another inference which can be derived from the chart, which is that everyone does better when the lowest income levels are rising. For the top 5%, the income growth might be pretty much the same either way, but for everyone else, there is a correlation between income growth at the lowest levels and income growth at all levels.
So it's not necessarily a zero-sum game, and the "class warfare" that conservatives complain about might not be necessary, because policies that benefit the working class are going to benefit the wealthy, but policies that benefit the wealthy don't seem to benefit wage earners.
So, if lack of consumer spending is the problem, the solution should be policies that give consumers more income to spend, right?
No, the mantra from the right is that we need more money in the hands of wealthy individuals and businesses. Of course, the very meaning of "wealthy" is having more income than you need to spend, which means that increasing the disposable income of the wealthy does not increase consumer spending but simply makes the wealthy wealthier. Investments in plants and equipment would also help the economy, but businesses are investing now because the economy is so bad (the kind of self-reinforcing behavior that makes "boom and bust" cycles work), and most investors are not putting their money into new businesses creating new jobs but into government securities, which is why interest rates are so low.
During the Reagan years, the belief that reducing taxes for the rich would stimulate the economy was called "trickle-down economics." But if consumer spending is the issue, then what we really need is trickle-UP economics. We need to adopt policies and programs that put more money into the hands of the lower economic levels where it will translate into consumer spending and economic growth for the entire economy.
The following chart presents empirical evidence of this truth also. This chart was originally published by Slate and it shows the income growth of different income levels during Republican administrations and Democratic administrations based on data compiled by Princeton political science professor Larry M. Bartels.
The chart obviously shows what it was intended to show, which is that the policies of Democratic presidents cause greater economic growth among the lower income levels, while the policies of Republican presidents promote more growth at the higher levels and less growth at the lower levels. But there's another inference which can be derived from the chart, which is that everyone does better when the lowest income levels are rising. For the top 5%, the income growth might be pretty much the same either way, but for everyone else, there is a correlation between income growth at the lowest levels and income growth at all levels.
So it's not necessarily a zero-sum game, and the "class warfare" that conservatives complain about might not be necessary, because policies that benefit the working class are going to benefit the wealthy, but policies that benefit the wealthy don't seem to benefit wage earners.
Wednesday, September 29, 2010
Why Health Care Reform Won't Be Repealed
Even if Republicans were to get majorities in both houses of Congress, there really is no likelihood of health care reform being repealed, because repeal won't have full Republican support, despite what Republican may be claiming in their "Pledge to America."
Republicans are claiming to support, and re-enact, all the things that people like. Specifically:
The reason that Republicans won't be able to repeal those parts of the act is that those are the parts of the act that the insurance industry likes. Requiring insurers to provide insurance to sick people without requiring healthy people to buy insurance is a prescription for economic disaster, because there would be nothing to stop healthy people from dropping their coverage until after they get sick. So insurers would have to provide the same (or greater) levels of benefits while the number of insureds shrinks, which would cause premiums to skyrocket.
And Republicans know this, which is why the "Pledge" is so specific about the parts of the act that they would want to keep and so vague about exactly what would be repealed. They know that, if they come right out and say that they are going to repeal the employer and individual mandates, they will be (or at least should be) ridiculed for proposing a completely unworkable system.
So if the Republicans actually try to repeal health care reform with actual legislation, they will be caught between a rock and a hard place. If they repeal the entire health care reform act without providing patient protection they will anger voters, but if they repeal the employer and individual mandates and leave the patient protections in place they will anger (if not bankrupt) some of the biggest contributors.
So it's pretty safe to say that there's going to be lots of rhetoric, but not much actual repeal.
Republicans are claiming to support, and re-enact, all the things that people like. Specifically:
We will make it illegal for an insurance company to deny coverage to someone with prior coverage on the basis of a pre-existing condition, eliminate annual and lifetime spending caps, and prevent insurers from dropping your coverage just because you get sick.Of course, the Patient Protection and Affordable Care Act of 2010 already does all those things, and those are the parts of the act that people like and support. What the Republicans want to get rid of are what are referred to as the "burdensome mandates," such as the requirement that all but the smallest businesses provide health insurance for employees, and the "individual mandate" that requires individuals not covered by employer-provided insurance to get health insurance or pay a special tax.
The reason that Republicans won't be able to repeal those parts of the act is that those are the parts of the act that the insurance industry likes. Requiring insurers to provide insurance to sick people without requiring healthy people to buy insurance is a prescription for economic disaster, because there would be nothing to stop healthy people from dropping their coverage until after they get sick. So insurers would have to provide the same (or greater) levels of benefits while the number of insureds shrinks, which would cause premiums to skyrocket.
And Republicans know this, which is why the "Pledge" is so specific about the parts of the act that they would want to keep and so vague about exactly what would be repealed. They know that, if they come right out and say that they are going to repeal the employer and individual mandates, they will be (or at least should be) ridiculed for proposing a completely unworkable system.
So if the Republicans actually try to repeal health care reform with actual legislation, they will be caught between a rock and a hard place. If they repeal the entire health care reform act without providing patient protection they will anger voters, but if they repeal the employer and individual mandates and leave the patient protections in place they will anger (if not bankrupt) some of the biggest contributors.
So it's pretty safe to say that there's going to be lots of rhetoric, but not much actual repeal.
Tuesday, August 31, 2010
Overreaching by the Pennsylvania AG
The Attorney General of Pennsylvania, Thomas Corbett, is now running for governor, and it will be interesting to see what will happen to Pennsylvania's role in the lawsuit Corbett joined in seeking to have the new health care reform law ("The Patient Protection and Affordable Care Act," H.R. 3590, P.L. 111-148) declared unconstitutional. Corbett was able to join in the lawsuit even though the governor of Pennsylvania, Edward Rendell, is a Democrat who actively supported passage of the health care bill, because the AG of Pennsylvania is an elected office that is largely independent of the governor. So, somewhat ironically, Corbett will be unable to continue to support the lawsuit if he is elected governor, because the next AG will be able to decide whether to proceed.
And Corbett never should have joined in the lawsuit, because it was outside of his powers as AG. If the lawsuit were just challenging the parts of the act that affect state government operations and revenues (mainly the provisions expanding Medicaid, which is a program created by federal law but only partially funded by the federal government), it would have been within his powers to represent the interests of the state, but the lawsuit also challenges the provisions requiring individuals to purchase health insurance (the "individual mandate"), and that is not within the powers of the AG.
The complaint that was filed says that the Attorneys General who are the plaintiffs seek "to protect the individual freedom, public health, and welfare of their citizens and residents" and specifically asks the court to order the federal government not to enforce the act against both the states represented by the AGs and the citizens and residents of those states.
But who gave the Attorney General of Pennsylvania the right to "protect" the individual interests of citizens and the right to represent their individual interests in court? And what if I (or other citizens) don't want the AG representing me in this lawsuit?
There is an allegation in the complaint that the Florida AG has "broad statutory and common law authority to protect the rights of the State of Florida and its people." There is no similar allegation regarding the powers of the Pennsylvania AG, and I don't believe that AG Corbett has the legal power to represent the people of Pennsylvania (i.e., the individual citizens of Pennsylvania separate from the government of Pennsylvania) in this lawsuit.
Section 4.1 of the Pennsylvania Constitution creates the office of Attorney General and declares that the AG " the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law." The law that seems most relevant is section 204 of the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, 71 P.S. §732-204, which states in subsection (c) that the AG shall represent "the Commonwealth and all Commonwealth agencies" in civil litigation. There is also the power to represent the Commonwealth and its citizens in federal antitrust litigation, but there is no general power to represent the citizens of Pennsylvania in any other kind of civil litigation. (On the inability of the AG to represent private parties, or enter into settlements affecting the rights of private parties, see Commonwealth v. Philip Morris, Inc., 40 Pa.D.& C. 225 (1999).)
It is possible that AG Corbett thinks that the statutory power to "intervene in any other action, including those involving ... the constitutionality of any statute" (71 P.S. §732-204(c)) allows him to join in this lawsuit but, unless the context clearly indicates otherwise, the word "statute" is defined to mean the statutes enacted by the General Assembly of Pennsylvania. 1 Pa.C.S. §1991. (And the context here does not clearly indicate a broader meaning of "statute." Quite the opposite, in fact, because it makes sense to give the AG the duty and power to defend state statutes against challenges to constitutionality, but it makes no sense to give the Pennsylvania AG the general power to challenge the constitutionality of federal statutes.)
The attempt by AG Corbett to challenge the constitutionality of the provisions of federal law which affect individual citizens of Pennsylvania but not the government of Pennsylvania is therefore outside of his power (what lawyers sometimes call "ultra vires") and the courts should deny him any standing to make those challenges.
But that might become moot if the next AG decides to withdraw from the suit.
And Corbett never should have joined in the lawsuit, because it was outside of his powers as AG. If the lawsuit were just challenging the parts of the act that affect state government operations and revenues (mainly the provisions expanding Medicaid, which is a program created by federal law but only partially funded by the federal government), it would have been within his powers to represent the interests of the state, but the lawsuit also challenges the provisions requiring individuals to purchase health insurance (the "individual mandate"), and that is not within the powers of the AG.
The complaint that was filed says that the Attorneys General who are the plaintiffs seek "to protect the individual freedom, public health, and welfare of their citizens and residents" and specifically asks the court to order the federal government not to enforce the act against both the states represented by the AGs and the citizens and residents of those states.
But who gave the Attorney General of Pennsylvania the right to "protect" the individual interests of citizens and the right to represent their individual interests in court? And what if I (or other citizens) don't want the AG representing me in this lawsuit?
There is an allegation in the complaint that the Florida AG has "broad statutory and common law authority to protect the rights of the State of Florida and its people." There is no similar allegation regarding the powers of the Pennsylvania AG, and I don't believe that AG Corbett has the legal power to represent the people of Pennsylvania (i.e., the individual citizens of Pennsylvania separate from the government of Pennsylvania) in this lawsuit.
Section 4.1 of the Pennsylvania Constitution creates the office of Attorney General and declares that the AG " the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law." The law that seems most relevant is section 204 of the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, 71 P.S. §732-204, which states in subsection (c) that the AG shall represent "the Commonwealth and all Commonwealth agencies" in civil litigation. There is also the power to represent the Commonwealth and its citizens in federal antitrust litigation, but there is no general power to represent the citizens of Pennsylvania in any other kind of civil litigation. (On the inability of the AG to represent private parties, or enter into settlements affecting the rights of private parties, see Commonwealth v. Philip Morris, Inc., 40 Pa.D.& C. 225 (1999).)
It is possible that AG Corbett thinks that the statutory power to "intervene in any other action, including those involving ... the constitutionality of any statute" (71 P.S. §732-204(c)) allows him to join in this lawsuit but, unless the context clearly indicates otherwise, the word "statute" is defined to mean the statutes enacted by the General Assembly of Pennsylvania. 1 Pa.C.S. §1991. (And the context here does not clearly indicate a broader meaning of "statute." Quite the opposite, in fact, because it makes sense to give the AG the duty and power to defend state statutes against challenges to constitutionality, but it makes no sense to give the Pennsylvania AG the general power to challenge the constitutionality of federal statutes.)
The attempt by AG Corbett to challenge the constitutionality of the provisions of federal law which affect individual citizens of Pennsylvania but not the government of Pennsylvania is therefore outside of his power (what lawyers sometimes call "ultra vires") and the courts should deny him any standing to make those challenges.
But that might become moot if the next AG decides to withdraw from the suit.
Thursday, March 25, 2010
Overreaching by the Pennsylvania AG
I was surprised to read that the Attorney General of Pennsylvania, Thomas Corbett, had joined in the lawsuit seeking to have the new health care reform law ("The Patient Protection and Affordable Care Act," H.R. 3590, P.L. 111-148) declared unconstitutional, because the governor of Pennsylvania, Edward Rendell, is a Democrat who actively supported passage of the health care bill. I knew that the AG of Pennsylvania is an elected office, but had forgotten that the current AG is a Republican, not a Democrat. (I live in Pennsylvania and it is a fairly moderate state politically, and tends to alternate regularly between Republican and Democratic administrations.)
If the lawsuit were just challenging the parts of the act that affect state government operations and revenues (mainly the provisions expanding Medicaid, which is a program created by federal law but only partially funded by the federal government), I would be somewhat annoyed, but what really bothers me is that the lawsuit also challenges the provisions requiring individuals to purchase health insurance (the "individual mandate").
The complaint that was filed says that the Attorneys General who are the plaintiffs seek "to protect the individual freedom, public health, and welfare of their citizens and residents" and specifically asks the court to order the federal government not to enforce the act against both the states represented by the AGs and the citizens and residents of those states.
But who gave the Attorney General of Pennsylvania the right to "protect" my individual freedom and the right to represent my individual interests in court? And what if I don't want him representing me in this lawsuit?
There is an allegation in the complaint that the Florida AG has "broad statutory and common law authority to protect the rights of the State of Florida and its people." There is no similar allegation regarding the powers of the Pennsylvania AG, and I don't believe that AG Corbett has the legal power to represent the people of Pennsylvania (i.e., the individual citizens of Pennsylvania separate from the government of Pennsylvania) in this lawsuit.
Section 4.1 of the Pennsylvania Constitution creates the office of Attorney General and declares that the AG " the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law." The law that seems most relevant is section 204 of the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, 71 P.S. §732-204, which states in subsection (c) that the AG shall represent "the Commonwealth and all Commonwealth agencies" in civil litigation. There is also the power to represent the Commonwealth and its citizens in federal antitrust litigation, but there is no general power to represent the citizens of Pennsylvania in any other kind of civil litigation. (On the inability of the AG to represent private parties, or enter into settlements affecting the rights of private parties, see Commonwealth v. Philip Morris, Inc., 40 Pa.D.& C. 225 (1999).)
It is possible that AG Corbett thinks that the statutory power to "intervene in any other action, including those involving ... the constitutionality of any statute" (71 P.S. §732-204(c)) allows him to join in this lawsuit but, unless unless the context clearly indicates otherwise, the word "statute" is defined to mean the statutes enacted by the General Assembly of Pennsylvania. 1 Pa.C.S. §1991. (And the context here does not clearly indicate a broader meaning of "statute." Quite the opposite, in fact, because it makes sense to give the AG the duty and power to defend state statutes against challenges to constitutionality, but it makes no sense to give the Pennsylvania AG the general power to challenge the constitutionality of federal statutes.)
The attempt by AG Corbett to challenge the constitutionality of the provisions of federal law which affect individual citizens of Pennsylvania but not the government of Pennsylvania is therefore outside of his power (what lawyers sometimes call "ultra vires") and the courts should deny him any standing to make those challenges.
If the lawsuit were just challenging the parts of the act that affect state government operations and revenues (mainly the provisions expanding Medicaid, which is a program created by federal law but only partially funded by the federal government), I would be somewhat annoyed, but what really bothers me is that the lawsuit also challenges the provisions requiring individuals to purchase health insurance (the "individual mandate").
The complaint that was filed says that the Attorneys General who are the plaintiffs seek "to protect the individual freedom, public health, and welfare of their citizens and residents" and specifically asks the court to order the federal government not to enforce the act against both the states represented by the AGs and the citizens and residents of those states.
But who gave the Attorney General of Pennsylvania the right to "protect" my individual freedom and the right to represent my individual interests in court? And what if I don't want him representing me in this lawsuit?
There is an allegation in the complaint that the Florida AG has "broad statutory and common law authority to protect the rights of the State of Florida and its people." There is no similar allegation regarding the powers of the Pennsylvania AG, and I don't believe that AG Corbett has the legal power to represent the people of Pennsylvania (i.e., the individual citizens of Pennsylvania separate from the government of Pennsylvania) in this lawsuit.
Section 4.1 of the Pennsylvania Constitution creates the office of Attorney General and declares that the AG " the chief law officer of the Commonwealth and shall exercise such powers and perform such duties as may be imposed by law." The law that seems most relevant is section 204 of the Commonwealth Attorneys Act, Act of October 15, 1980, P.L. 950, 71 P.S. §732-204, which states in subsection (c) that the AG shall represent "the Commonwealth and all Commonwealth agencies" in civil litigation. There is also the power to represent the Commonwealth and its citizens in federal antitrust litigation, but there is no general power to represent the citizens of Pennsylvania in any other kind of civil litigation. (On the inability of the AG to represent private parties, or enter into settlements affecting the rights of private parties, see Commonwealth v. Philip Morris, Inc., 40 Pa.D.& C. 225 (1999).)
It is possible that AG Corbett thinks that the statutory power to "intervene in any other action, including those involving ... the constitutionality of any statute" (71 P.S. §732-204(c)) allows him to join in this lawsuit but, unless unless the context clearly indicates otherwise, the word "statute" is defined to mean the statutes enacted by the General Assembly of Pennsylvania. 1 Pa.C.S. §1991. (And the context here does not clearly indicate a broader meaning of "statute." Quite the opposite, in fact, because it makes sense to give the AG the duty and power to defend state statutes against challenges to constitutionality, but it makes no sense to give the Pennsylvania AG the general power to challenge the constitutionality of federal statutes.)
The attempt by AG Corbett to challenge the constitutionality of the provisions of federal law which affect individual citizens of Pennsylvania but not the government of Pennsylvania is therefore outside of his power (what lawyers sometimes call "ultra vires") and the courts should deny him any standing to make those challenges.
Wednesday, March 03, 2010
Why Turkeys Run the World
The Senator Bunning/unemployment benefit extension fiasco is another illustration of a fundamental truth that was revealed to me some years ago in a book (more of pamphlet really) titled "Why Turkeys Run the World." The fundamental truth is that real decision-making power does not reside in the people with a goal or a mission or something to accomplish. The real power rests with people without any goal or agenda whatsoever.
Take Senator Bunning (please). The reason he was able to block Senate action was due in large part to the peculiar (to say the least) rules of that body, but the reason he was so successful was that he wasn't actually trying to accomplish anything, or even actually trying to block anything. If he had been trying to accomplish something, then the other Senators could have negotiated with him. But he didn't actually want anything, so there was nothing to offer him. It was his very purposelessness that gave him power.
A similar dynamic was seen in Senator Lieberman's self-indulgent opposition to health care reform. The real problem was not that Lieberman supported health care reform, or that he opposed it, but that he really didn't give a damn one way or another. Not really caring what happened, he had much greater freedom of action, and much greater power, than the Senators who stood for something.
Elections are usually decided by the independents in the middle, not with the stalwarts on either side of the political divide. Similarly, Congressional power resides in the indifferent and the unprincipled, not the dedicated.
Take Senator Bunning (please). The reason he was able to block Senate action was due in large part to the peculiar (to say the least) rules of that body, but the reason he was so successful was that he wasn't actually trying to accomplish anything, or even actually trying to block anything. If he had been trying to accomplish something, then the other Senators could have negotiated with him. But he didn't actually want anything, so there was nothing to offer him. It was his very purposelessness that gave him power.
A similar dynamic was seen in Senator Lieberman's self-indulgent opposition to health care reform. The real problem was not that Lieberman supported health care reform, or that he opposed it, but that he really didn't give a damn one way or another. Not really caring what happened, he had much greater freedom of action, and much greater power, than the Senators who stood for something.
Elections are usually decided by the independents in the middle, not with the stalwarts on either side of the political divide. Similarly, Congressional power resides in the indifferent and the unprincipled, not the dedicated.
Sunday, February 21, 2010
Yoo's Professional Misconduct
Although Associate Deputy Attorney General David Margolis has decided that John Yoo's "poor judgment" did not rise to the level of professional misconduct, the issue is not yet settled, because what is essentially the same issue is being litigated in federal district court, and is now before the 9th Circuit Court of Appeals.
In the recently-released final report of the Office of Professional Responsibility within the U.S. Department of Justice, the OPR concluded that many of the misstatements and omissions in the legal memoranda that John Yoo (then in the Office of Legal Counsel) approved on the use of "enhanced interrogation techniques" were intentional and constituted professional misconduct because he failed to provide legal advice that was thorough, objective, and candid. The OPR concluded that Yoo failed to provide the proper level of legal advice because he "put his desire to accommodate the client" (i.e., the policy makers in the Bush White House) above his professional obligations.
In rejecting the conclusion that the misstatements and omissions constituted professional misconduct, Assoc. Deputy Attorney General Margolis disagreed that Yoo wanted to tell the policy makers within the Bush administration what they wanted to hear, and concluded instead that Yoo was telling the Bush administration what Yoo wanted them to hear. "While I have declined to adopt OPR's findings of misconduct, I fear that John Yoo's loyalty to his own ideology and convictions clouded his view of his obligation to his client and led him to author opinions that reflected his own extreme, albeit sincerely held, views of executive power while speaking for an institutional client."
But is the sincerity of Yoo's ideology a defense to charges of professional misconduct?
That issue may be addressed in a federal district court action brought by Jose Padilla against John Yoo in which Padilla alleges that John Yoo's memos resulted in Padilla's imprisonment (and mistreatment). Padilla v. Yoo, No. 3:08-cv-00035-JSW (U.S.D.C. N.D. Cal.) Yoo moved to dismiss the lawsuit on the grounds that, among other things, he was a federal officer entitled to immunity to suit. In a ruling last June, the court ruled that Yoo was not entitled to immunity because the opinions expressed in Yoo's memos violates "clearly established statutory or constitutional rights of which a reasonable person would have known."
The district court ruling is currently on appeal to the 9th Circuit (No. 09-16478), and one of the issues being argued is whether Padilla's complaint alleges facts that constitute unprofessional conduct by Yoo, and a brief filed by a group of professors of legal ethics say that it does. According to the "amicus" brief filed by "legal ethics scholars" last month, Padilla has alleged that Yoo "stepped beyond his role as a lawyer to participate directly in developing policy in the war on terrorism," and that allegation supports the conclusion that Yoo did not merely give "poor" or "incorrect" legal advice, but gave advice that violated ethical rules.
In other words, Margolis seems to believe that Yoo did not act unethically because he only allowed his own views to interfere with his obligation to give impartial legal advice, while the legal scholars filing the amicus brief with the 9th Circuit believe that Yoo acted unethically because he allowed his own views to interfere with his obligation to give impartial legal advice.
Now, the 9th Circuit is being asked to rule on allegations and not evidence, but the fact that the OPR has already concluded that Yoo's erroneous legal advice was not accidental but intentional suggests that Padilla will be able to prove the same thing. And Padilla may be able to avoid the mistake that the OPR may have made in assuming that Yoo gave bad legal advice to please the White House and failing to consider that Yoo might have given bad legal advice to please himself.
In the recently-released final report of the Office of Professional Responsibility within the U.S. Department of Justice, the OPR concluded that many of the misstatements and omissions in the legal memoranda that John Yoo (then in the Office of Legal Counsel) approved on the use of "enhanced interrogation techniques" were intentional and constituted professional misconduct because he failed to provide legal advice that was thorough, objective, and candid. The OPR concluded that Yoo failed to provide the proper level of legal advice because he "put his desire to accommodate the client" (i.e., the policy makers in the Bush White House) above his professional obligations.
In rejecting the conclusion that the misstatements and omissions constituted professional misconduct, Assoc. Deputy Attorney General Margolis disagreed that Yoo wanted to tell the policy makers within the Bush administration what they wanted to hear, and concluded instead that Yoo was telling the Bush administration what Yoo wanted them to hear. "While I have declined to adopt OPR's findings of misconduct, I fear that John Yoo's loyalty to his own ideology and convictions clouded his view of his obligation to his client and led him to author opinions that reflected his own extreme, albeit sincerely held, views of executive power while speaking for an institutional client."
But is the sincerity of Yoo's ideology a defense to charges of professional misconduct?
That issue may be addressed in a federal district court action brought by Jose Padilla against John Yoo in which Padilla alleges that John Yoo's memos resulted in Padilla's imprisonment (and mistreatment). Padilla v. Yoo, No. 3:08-cv-00035-JSW (U.S.D.C. N.D. Cal.) Yoo moved to dismiss the lawsuit on the grounds that, among other things, he was a federal officer entitled to immunity to suit. In a ruling last June, the court ruled that Yoo was not entitled to immunity because the opinions expressed in Yoo's memos violates "clearly established statutory or constitutional rights of which a reasonable person would have known."
The district court ruling is currently on appeal to the 9th Circuit (No. 09-16478), and one of the issues being argued is whether Padilla's complaint alleges facts that constitute unprofessional conduct by Yoo, and a brief filed by a group of professors of legal ethics say that it does. According to the "amicus" brief filed by "legal ethics scholars" last month, Padilla has alleged that Yoo "stepped beyond his role as a lawyer to participate directly in developing policy in the war on terrorism," and that allegation supports the conclusion that Yoo did not merely give "poor" or "incorrect" legal advice, but gave advice that violated ethical rules.
In other words, Margolis seems to believe that Yoo did not act unethically because he only allowed his own views to interfere with his obligation to give impartial legal advice, while the legal scholars filing the amicus brief with the 9th Circuit believe that Yoo acted unethically because he allowed his own views to interfere with his obligation to give impartial legal advice.
Now, the 9th Circuit is being asked to rule on allegations and not evidence, but the fact that the OPR has already concluded that Yoo's erroneous legal advice was not accidental but intentional suggests that Padilla will be able to prove the same thing. And Padilla may be able to avoid the mistake that the OPR may have made in assuming that Yoo gave bad legal advice to please the White House and failing to consider that Yoo might have given bad legal advice to please himself.
Friday, February 05, 2010
The Upcoming Tax Brawl
There's been some media attention to the strange one-year repeal of the federal estate tax, and a few comments on the failure of Congress to pass an "extenders" bill to prevent a number of tax provisions from expiring at the end of 2009, but I have yet to see any public comment on what will be THE political story of 2010, which is that all of the Bush tax cuts will be expiring at the end of the year and, unless Congress acts, almost every tax-paying American will be paying more in federal income tax next year.
For the wealthiest Americans, allowing the Bush tax cuts to "sunset" will be quite a shock. A family of four with $500,000 of income filing a joint return with no itemized deductions would pay $136,208 in federal income tax in 2010, but will have to pay $158,801 in 2011, a $22,607 increase, unless Congress acts. If that $500,000 of income includes qualified dividend income, which is taxed at the capital gain rate of 15% instead of the maximum rate of 35% on ordinary income, the results are even more dramatic. In 2010, $500,000 of income with $250,000 of qualified dividends would result in $89,201 of federal tax, but in 2011 the tax jumps up to $158,801, an increase of $69,600, or almost 80%, in only one year.
Barack Obama campaigned on the pledge (which he has repeated several times since being elected), that he will not raise taxes for those earning less than $250,000. For a family of four with $250,000 of income, their tax bill is $51,701 under current law, but goes to $59,341 in 2011, a $7,640 increase.
Reducing the family's income reduces the impact, but the impact is still there. For a family earning $50,000, the tax bill would be $2,763 under current law, but jumps to $3,878, more than $1,000 more, in 2010.
Even a family earning as little as $30,000 would be affected. That family would owe $400 in federal income tax in 2010, but if the 10% tax bracket and marriage penalty relief both expire, that family's tax bill more than doubles, going from $400 to $878.
And here is where the Senate will jump into inaction. As we have seen very clearly in the attempt at health care reform, it takes only 41 Republican votes in the Senate (which the Republicans now have with newly-elected Scott Brown seated) to block any attempt to raise income tax rates for the wealthy. But these tax increases are already enacted and will happen if Congress does nothing, and it also takes only 41 Democratic votes in the Senate (or the Democratic majority in the more progressive House) to block any extension of the tax cuts for the wealthy.
So it's going to be like health care, only worse. At least with health care, Republicans paid lip service to the idea of reform and compromise, but when it comes to taxes Republicans are going to even pretend to be interested in negotiating with Democrats. With increasing pressure from "tea partiers" and the extreme right, and facing election battles at the end of 2010, Republicans have no reason to do anything but draw a hard line and insist on making the Bush tax cuts permanent.
And Republicans also have every reason to block anything the Democrats try to enact, because they would really like to go into the 2010 election being able to point to enormous tax increases on working Americans in 2011 and blaming it on the Democrats who control Congress.
So it's going to be bloody. It's going to be a bare-knuckled street brawl with knives and chains, and if the Democrats don't get their act together and enact real tax reform before November, they're going to find themselves down on the ground, bloody, and being kicked in the face.
For the wealthiest Americans, allowing the Bush tax cuts to "sunset" will be quite a shock. A family of four with $500,000 of income filing a joint return with no itemized deductions would pay $136,208 in federal income tax in 2010, but will have to pay $158,801 in 2011, a $22,607 increase, unless Congress acts. If that $500,000 of income includes qualified dividend income, which is taxed at the capital gain rate of 15% instead of the maximum rate of 35% on ordinary income, the results are even more dramatic. In 2010, $500,000 of income with $250,000 of qualified dividends would result in $89,201 of federal tax, but in 2011 the tax jumps up to $158,801, an increase of $69,600, or almost 80%, in only one year.
Barack Obama campaigned on the pledge (which he has repeated several times since being elected), that he will not raise taxes for those earning less than $250,000. For a family of four with $250,000 of income, their tax bill is $51,701 under current law, but goes to $59,341 in 2011, a $7,640 increase.
Reducing the family's income reduces the impact, but the impact is still there. For a family earning $50,000, the tax bill would be $2,763 under current law, but jumps to $3,878, more than $1,000 more, in 2010.
Even a family earning as little as $30,000 would be affected. That family would owe $400 in federal income tax in 2010, but if the 10% tax bracket and marriage penalty relief both expire, that family's tax bill more than doubles, going from $400 to $878.
And here is where the Senate will jump into inaction. As we have seen very clearly in the attempt at health care reform, it takes only 41 Republican votes in the Senate (which the Republicans now have with newly-elected Scott Brown seated) to block any attempt to raise income tax rates for the wealthy. But these tax increases are already enacted and will happen if Congress does nothing, and it also takes only 41 Democratic votes in the Senate (or the Democratic majority in the more progressive House) to block any extension of the tax cuts for the wealthy.
So it's going to be like health care, only worse. At least with health care, Republicans paid lip service to the idea of reform and compromise, but when it comes to taxes Republicans are going to even pretend to be interested in negotiating with Democrats. With increasing pressure from "tea partiers" and the extreme right, and facing election battles at the end of 2010, Republicans have no reason to do anything but draw a hard line and insist on making the Bush tax cuts permanent.
And Republicans also have every reason to block anything the Democrats try to enact, because they would really like to go into the 2010 election being able to point to enormous tax increases on working Americans in 2011 and blaming it on the Democrats who control Congress.
So it's going to be bloody. It's going to be a bare-knuckled street brawl with knives and chains, and if the Democrats don't get their act together and enact real tax reform before November, they're going to find themselves down on the ground, bloody, and being kicked in the face.
Sunday, January 24, 2010
Dred Scott v. Citizens United
In Dred Scott v. Sandford, 60 U.S. 393 (1857), the Supreme Court declared that, whether of not someone was a "person" within the meaning of the Constitution was to be determined solely by reference to the Constitution, and Congress and the States had no say in the matter. Specifically, a person descended from a person imported as a slave could never be a "citizen" or a "person" within the meaning of the Constitution.
The decision is widely regarded as one of the worst in the history of the United States. It perpetuated slavery, it lead to the Civil War, and it was directly refuted by the 14th Amendment, one of only four (at most) Supreme Court opinions to have been reversed by constitutional amendments.
The recent Supreme Court decision in Citizens United v. Federal Election Commission, 558 U.S. ___, No. 08-205 (1/21/2010), goes to the opposite extreme, because it holds that anything that a state declares to be a "person" is a "person" for all purposes of the Constitution, and Congress has no say in the matter.
The Dred Scott decision eviscerated the federal government by declaring that whether a slave was a "person" was determined solely by constitutional law and Congress was powerless.
The Citizens United decision eviscerates the federal government by declaring that whether a corporate is a "person" is determined solely by state law and Congress is powerless.
Let's hope that fewer Americans die this time.
The decision is widely regarded as one of the worst in the history of the United States. It perpetuated slavery, it lead to the Civil War, and it was directly refuted by the 14th Amendment, one of only four (at most) Supreme Court opinions to have been reversed by constitutional amendments.
The recent Supreme Court decision in Citizens United v. Federal Election Commission, 558 U.S. ___, No. 08-205 (1/21/2010), goes to the opposite extreme, because it holds that anything that a state declares to be a "person" is a "person" for all purposes of the Constitution, and Congress has no say in the matter.
The Dred Scott decision eviscerated the federal government by declaring that whether a slave was a "person" was determined solely by constitutional law and Congress was powerless.
The Citizens United decision eviscerates the federal government by declaring that whether a corporate is a "person" is determined solely by state law and Congress is powerless.
Let's hope that fewer Americans die this time.
Taxing Political Expenditures
The Supreme Court's recent decision in Citizens United v. Federal Election Commission severely restricts the ability of Congress to regulate, much less prohibit, the use of corporate money to influence elections, but what about Congress's power to tax that money?
As it is now, corporations cannot claim expenses of attempting to influence elections or legislation as business expense (see Internal Revenue Code section 162(e)). So corporate profits that are spent on electioneering are effectively subject to income tax at the corporate level. The shareholders bear the burden of the tax, but very indirectly.
But what if the expenses of electioneering were considered a form of a dividend?
This is not unprecedented, because there are lots of places in the Internal Revenue Code in which something that looks like one thing is recharacterized as something else. To take just one example, IRC section 7872 says that if a corporation makes an interest-free loan to a shareholder, the loan is recharacterized as an interest-bearing loan at a market rate of interest, with imputed interest payments by the shareholder to the corporation and imputed dividend payments in the same amounts by the corporation to the shareholder. There are also many rulings and court decisions in which officers or shareholders who have used corporate money to pay personal expenses are held to have received either compensation or dividends from the corporation.
So it would not be unreasonable for Congress to say that, if a corporation uses its money to advance the personal political beliefs of the officers or shareholders, that money should be considered to be payments to those officers or shareholders. For most publicly-traded corporations, dividends are not tax-deductible by the corporation, so income paid out as dividends is taxed twice, once at the corporate level and again at the shareholder level.
But the really nasty part is that Congress could offer corporations a choice: If the political expenses are approved by the shareholders, then the expenses could be considered a dividend to those shareholders, but if the political expenses are approved only by the board of directors, then the income falls on the directors alone.
Neither alternative is going to be very appealing to corporations. Getting shareholder approval for political spending could turn shareholder meetings into political battles, and stock prices could suffer if investors decide that they don't want to own a stock that pays a dividend of $10 while the investor has $12 of taxable income. But directors are certainly not going to want to pay personal income tax on what might be millions of dollars of income they never actually received.
Taxing directors or shareholders on the money spent on corporate electioneering might not solve the problem of corporate influence, but it might make it more difficult and more painful.
As it is now, corporations cannot claim expenses of attempting to influence elections or legislation as business expense (see Internal Revenue Code section 162(e)). So corporate profits that are spent on electioneering are effectively subject to income tax at the corporate level. The shareholders bear the burden of the tax, but very indirectly.
But what if the expenses of electioneering were considered a form of a dividend?
This is not unprecedented, because there are lots of places in the Internal Revenue Code in which something that looks like one thing is recharacterized as something else. To take just one example, IRC section 7872 says that if a corporation makes an interest-free loan to a shareholder, the loan is recharacterized as an interest-bearing loan at a market rate of interest, with imputed interest payments by the shareholder to the corporation and imputed dividend payments in the same amounts by the corporation to the shareholder. There are also many rulings and court decisions in which officers or shareholders who have used corporate money to pay personal expenses are held to have received either compensation or dividends from the corporation.
So it would not be unreasonable for Congress to say that, if a corporation uses its money to advance the personal political beliefs of the officers or shareholders, that money should be considered to be payments to those officers or shareholders. For most publicly-traded corporations, dividends are not tax-deductible by the corporation, so income paid out as dividends is taxed twice, once at the corporate level and again at the shareholder level.
But the really nasty part is that Congress could offer corporations a choice: If the political expenses are approved by the shareholders, then the expenses could be considered a dividend to those shareholders, but if the political expenses are approved only by the board of directors, then the income falls on the directors alone.
Neither alternative is going to be very appealing to corporations. Getting shareholder approval for political spending could turn shareholder meetings into political battles, and stock prices could suffer if investors decide that they don't want to own a stock that pays a dividend of $10 while the investor has $12 of taxable income. But directors are certainly not going to want to pay personal income tax on what might be millions of dollars of income they never actually received.
Taxing directors or shareholders on the money spent on corporate electioneering might not solve the problem of corporate influence, but it might make it more difficult and more painful.
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