Intelligence, Please…

From the Buckle of the Bible Belt to the Beltway: Pontifications of a Political Philosopher

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BlackBerry’s New WordPress App Is Here!

Posted by stackiii on July 10, 2009

This is just a simple test post from my BlackBerry to see how well (if at all) it works. If it does, I daresay I’ll be able to blog more frequently!

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The Conservative Case for Supporting Gay Marriage (Part 1)

Posted by stackiii on June 25, 2009

Over here on the Right side of the ideological spectrum, we find ourselves asking the Left for consistency in their policy arguments. We’ve all seen the old “It’s Hypocritical to be Pro-Choice and Anti-Capital Punishment” bumper sticker (although the script is easily flipped by the Left, who argues that it’s hypocritical to be pro-life and pro-capital punishment). Without diving too deep into the fray, and trying to hash out who is more wrong or more hypocritical (since both sides are careless in their argumentation), it’s time that we on the Right start doing a bit of reflexive ideological overhaul work. If we’re going to start winning the messaging war, then our cases had better be logical, compelling, and non-dogmatic.

Sure, it’s easy (and sometimes fun) to obfuscate facts and meanings of words, show off controversial sound bites and video clips, or even just to poke fun at political personalities. But the fact remains: WE LOST BIG TIME. I want to throw the bums out just as much as anyone. But as a droplet of new blood on the Right, let me clue you in Old Guard: you didn’t lose because you weren’t conservative enough. I mean, it’s not like people like me stayed home or crossed the lines on November 4, 2008 because you weren’t conservative enough. Don’t delude yourselves. You lost because the Left has the POWER to frame discussions on their terms, to move messaging and money, and to inspire people. And the only response Republicans had to Obama’s win was to install Michael Steele as RNC Chairman to show the world, “Hey, we have a black guy too!” You can blame the media all you want, and I tend to agree that Democrats have liberal journalists in their pocket. Sorry, Old Guard, but you have zero control over that. I hate it too, but no amount of complaining will change it; in fact, you’re making us all look like over-paid, over-indulged, whining Baby-Boomers. What we on the Right do control, however, is how well we make our philosophical cases for our policy preferences (to see how we fail utterly at this, click here).

The way I see it, Old Guard, you can either keep sticking it to people like me who will inherit your legacy, digging the hole even deeper and making it more difficult for me to win hearts, minds, and votes, OR you can start taking some cues from informed and educated people like me, who have powerlessly stood by and watched you do ridiculous things like swearing by Sarah Palin while the rest of the world was swearing at her.

So as “Intelligence, Please…” continues to undergo a little bit of site re-design, I wanted to bring you the first installment of a multi-part series on the conservative case for supporting gay marriage. The seminal undercurrent to each post will be this: it’s time for us to start being consistent in our application of the law as written in the U.S. Constituion. Republicans claim to be the “party of the Constitution,” and “the party of the Civil Rights movement.” Well, even though the First Amendment to that Constitution provides that “Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof,” the GOP seems Hell-bent on using religion as a weapon against the civil liberties of citizens who love their significant others, who love and serve their country, who get up and go to work every day, and who, just like you and me, pay exorbitant amounts of taxes. The debate over gay marriage has presented the Right with the opportunity to take the lead in the cause for civil rights once more, a cause which, if seen through, will pay electoral dividends for years to come. Just look at California: it’s the bluest state of the 50, but their people voted in a referendum to ban gay marriage. Imagine if Republicans fought California’s gay marriage ban on civil rights precedence and jurisprudence, locked in those votes, and turned Reagan’s home state red?!

Whether or not we have a Judeo-Christian cultural-historical legacy in this country has no bearing or net drain upon the authority of the U.S. Constitution, so don’t tell me “we’re a Christian nation, and our faith should inform our politics.” Bullshit. Our laws are our laws, and our religions are our religions. The two do not go together, end of story. If you want to fight gay marriage on moral or religious grounds, then go fight it on moral or religious battlegrounds. You know — put down your remote or your Beamer keys, go out into your community, and make your “compassionate Christian case” to the very people you oppose; the very people you have made sure will hate you or, in the best case scenario, seriously mistrust you.

The Constitution, taken as a whole, is our (meaning “We, the People”; red, blue, black, white, brown, yellow, green, gay, straight, intelligent, stupid, lucid, confused, etc.) last line of defense (AND the supreme law of the land, no matter what you believe regarding states’ rights), which shields us and our liberties from lawmakers who would infringe upon them for personal and/or political reasons. I’ll save the legal discussions for later posts, but for now, I’m calling in an assist from beyond the grave to warm you up with one of my personal heroes (may he rest in peace):

Posted in Ethics, Judiciary, Legislature, Logic, Philosophy, Political Philosophy, Politics, State and Local | Tagged: , , , , , , , , , , , , , , , , , , , , , | 1 Comment »

Rebuilding Society, One Myth at a Time

Posted by stackiii on April 6, 2009

I want to raise questions about Nietzsche’s claims, which appear throughout his works, to be truly an anti-Platonist. Socrates seems, after reading some of Nietzsche’s early and middle-period works, to be something of an enigma for Nietzsche; in the Preface of Beyond Good and Evil, however, Nietzsche speaks directly to “Platonism in Europe,” arguing that “we must certainly admit that of all errors thus far, the most grievous, protracted, and dangerous has been a dogmatist’s error: Plato’s invention of pure spirit and of transcendental goodness” (312). However, in subsection 186 of section 5 in Beyond Good and Evil, as Nietzsche has thoroughly discounted modern European morality on the basis that it has been informed by Christian men who would use moral systems only to bolster their own power, he seems to steal a page from Plato’s playbook in The Republic.

Nietzsche writes, “We should sternly admit to ourselves what will be required in the long term, what the only right course is for the moment: that is, to gather the material, establish the concepts, and organize the abundance of subtle feelings and distinctions in the area of values, as they live, grow, procreate, and perish; and perhaps we should also attempt to illustrate the more frequently recurring forms of this living crystallization – in preparation for a taxonomy of morals” (339). It is clear by now that Nietzsche believes that European society is headed for disaster, and has taken on the onus of prescribing fixes for that society, while at the same time remaining relatively content to make sure his readers understand that he is not part of it – not contributing to the downfall. While the particular subjects in the content of the Socratic/Platonic project in The Republic might be somewhat different than Nietzsche’s project, their method and approach are incredibly similar.

In The Republic, Socrates characterized individual humans as belonging to specific strata of social hierarchy, according the “metal” of his soul; each human, thus, performs a specific function within that society which helps sustain it. Producers provide goods; guardians rule/protect the society with their wisdom; the auxiliary serves to maintain order. As a matter of prescription in building an ideal society, Socrates suggests a state-sanctioned mythology – one that runs against the conventional mythology, which portrays the Olympic gods as having vices – which will become the basis of wisdom in the guardian class. We cannot overstate the parallels between this idea (Socrates’) and Nietzsche’s call for a new class of philosophers – philosophers who might “get morality right” for the rest of us.

Nietzsche might appear at first to be more like Thrasymachus and the Sophists than Socrates in The Republic, as Thrasymachus believed that law and morality were simply a matter of circumstance and/or convention, and that men acted according to what would be most advantageous to him. If man acts according only to what is most advantageous to him, then the Nietzschean tenet of the “will to power” would certainly be true. If it is true, then, why would Nietzsche launch a project “in preparation for a taxonomy of morals” when the modern European “’science of morality’ is still young, raw, clumsy and crude: an attractive antithesis which is sometimes revealed in the person of the moralist himself” (339)? Are we to take the “will to power” as a simple diagnosis of human nature, a mere observation, classification, or categorization?

Surely Nietzsche intends to argue for a new moral system, and to anchor society with a concept of justice, just as Plato and Socrates tried to do in The Republic. The “new philosophers…that are strong and original enough to give impetus to opposing value judgments…who in the present will forget the necessary link to force a thousand-year-old will onto new tracks” seem more like Plato’s Spartan-esque guardian class in The Republic than they do simply free-spirited new-thinking Europeans. Nietzsche would surely object to this thesis, arguing that the use of an auxiliary to help maintain justice and order in a society according to the wisdom of the guardian class would be nothing more than a manifestation of the “will to power.”

We must then wonder this: can reason alone compel people to live moral lives, according to the tenets of the Nietzschean taxonomy? Or do we need the very type of auxiliary that Socrates suggested in order for society to flourish? What do you think?

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A Case for Legislative Term Limits at the Federal Level

Posted by stackiii on March 5, 2009

It has been awhile since the Republican party has stood marginalized by more popular Democrats, the natural after affect of an unpopular foreign war, a tanking economy, and multiple-term control of the Executive Branch.  The (in)famous “Republican Revolution” of 1994 birthed the GOP’s “Contract with America,” an electoral platform that promised to change the way the First Branch did its business — everything from new ethics standards and campaign finance reform to sweeping changes in formal and informal rules of the game.  Sadly, this was the last time that legislative term limits took the national stage as a potentially viable reform that would end Congressional demagoguery if implemented well.  Unfortunately, too, was that under former Speaker Newt Gingrich, term limits took hold only in committee chair posts, and only Republicans have followed this informal rule.  Nonetheless, it would behoove all of us — since we all seem to be sick of Washington, no matter what ideological stripe we bear — to give it a little more consideration and revive the term limits debate.

Careerism is a term we take to mean “the tendency of legislators in the United State House of Representatives and Senate to vacate positions in the private sector and establish a permanent position in the national legislature, making a career of climbing the institutional ladder and seeking more prestigious committee posts.” The term carries a negative connotation; careerism lends itself to corruption, demagoguery, shirking, and irresponsible legislation (in the form of earmarking and unnecessary discretionary pork-barrel spending). Further, the incumbency advantage dissuades potentially more-qualified candidates from contesting seats or running for seats until incumbents retire.

Congressional campaign finance reforms have done little to help increase legislative turnover; the “whack-a-mole” theory suggests that with each finance reform, PACs and their legal advisors find new ways to circumvent regulations. A review of scholarly literature helps to lay the foundation for an argument that will suggest that legislative term limits not only minimize incumbency advantage, but will solve problems of irresponsible legislation, corruption, shirking, and a disconnect from constituent bodies. Further, I contend that legislative term limits will foster party discipline, more competitive elections, and increased voter turnout.

According to their text Congress and Its Members, Davidson, Oleszek, and Lee write that, in its infancy, “…Congress was an institution composed of transients…service was regarded more as odious duty than as rewarding work.” (2008, 33) What, then, transformed congressional service into the attractive and lucrative career opportunity that is has become? They argue that careerism was birthed by three major factors: Woodrow Wilson’s coining of the phrase “congressional government,” which brought federal service into the limelight, the advent of the modern air conditioner and its subsequent installation on the Hill, and the establishment of the seniority rule at the turn-of-the-century. (34-35) Seniority rule compels MCs to seek reelection to their congressional seat over and over again in the hopes that they might gain access to more powerful committees. Despite intra-party rules on both sides of the aisle that govern the length of service of committee chairs in Congress, Davidson, Oleszek, and Lee maintain that “Extended service, if not always strict seniority, remains a prerequisite for top party and committee posts.” (35) Daniel Enemark and John Cross, though, argue that senior members of the legislature tend to shirk more than junior members. (2002, 1) As the length of service grows, so does the tendency to ignore the very duties which we elect our representatives to perform on our behalf.

Incumbency reelection rates are in the high-90s in the House and the high-70s in the Senate. We can infer from David Mayhew’s The Electoral Connection that constituent casework takes precedence over policy formation, for part of the incumbency advantage entails being able to claim credit for performing certain constituent-related duties. Length of service, then, seems to correlate directly to how well a legislator allocates discretionary spending to his constituency or how well he logrolls. Doug Bandow reinforced in his piece Real Term Limits: Now More Than Ever, claiming that “Incumbents continue to win most elections, and casework usually trumps issues in campaigns.” He also reports that incumbents spend four times as much on their campaigns as do their challengers, they collect ten times as much from PACs, and they enjoy the franking privilege as well as “large, taxpayer-paid personal staffs- a de facto reelection apparatus.” (1995, 2) This is problematic, as Meinke and Hasecke illustrate in their work Term Limits, Professionalization, and Partisan Control in U.S. State Legislatures. They claim that “[Careerism]…is a primary cause of…divided government.” (2003, 900) Conventional wisdom seems to suggest that in instances of divided government, fewer pieces of legislation, while passed by both chambers, become signed into law. The line-item veto has reduced the effects of this drawback; the pocket veto has exacerbated it. David Mayhew wrote a critique of this conventional wisdom entitled Divided We Govern: Party Control, Lawmaking, and Investigations, 1946-2002 (2005), but to argue effects of divided government on policy formation or to address every critique is beyond the scope of this discourse. It was the conventional wisdom regarding divided government, particularly legislative gridlock, combined with the aforementioned institutional problems associated with long service which helped guide this investigation into the plausibility of legislative term limits as a cure to Congressional ills.

Many arguments exist that establish the need for legislative term limits. The National Conference of State Legislatures indicates that “15 states…currently have term limits for legislators.” (2006, 1) Of those fifteen, the lowest rate of passage of restrictive measures was 52.2% in California, and the highest passage rate was and overwhelming 76% in Louisiana. These are very compelling numbers in adequately gauging whether or not legislative term limits would gain popular support (30% of states passing limits with an average passing rate of roughly 65%). Only 6 of the original 21 who comprised the wave of term limit passage in the 1990’s have repealed their term limits. This indicates that at one point, no less than 42% of states were at least willing to try term limits. Bandow argues that, of those 21 states that sent the issue to referendum, “Nowhere have people failed to restrict the terms of service of their legislators when able to vote on term limits. Only legislators, especially representatives, have resisted congressional term limits.” (1)

While Kelly Yang seems to think that term limits are receiving too much credit, she nonetheless concedes that “Term limits sped up an already existing upward trend.” (2002, 1) While she wants to yield to the packing of legislative districts, the numbers after term limit legislation are staggering: 71% of newly-elected women (1996-2002) took over for termed-out incumbents, and the number of minorities elected doubled from 1990-1996, going from 21 seats to 42. (1-2) When taken with the idea that many Americans do not believe that congressmen of another gender or race (particularly white male Republicans) can substantively represent them, these numbers seem to indicate an increase in minority and female voter turnout. While racial redistricting might achieve the same results, there is no evidence to suggest or explain the surge in female representation in terms of gender-based redistricting. In fact, Meinke and Hasecke argue that California and Michigan currently enjoy “…greater primary election competition as well as increased seat-vacating (before legislators reach their prescribed limit).” (900)

In looking at whether or not limits foster a change in behavior of members, Enemark and Cross, who established that senior member shirk more than junior members, argue that limits have an increasing effect in attendance for roll-call votes. The took the man sum of yeas and noes as a percentage of the total number of members in each of California’s chambers; their results demonstrated “…a 1.4 member increase in average attendance in the assembly after term limits and a 1.8 member increase in the state senate…young blood is a cure for legislative apathy.” (1) Their research also suggests that committees amend more bills after the enactment of term limits, and that the while the lower house is passing only marginally more legislation (61.3% à 63.8%), the upper house is certainly considering more of that legislation for a vote (76.9% à 84.1%). (2) The governor is vetoing more pieces of legislation, but at least the legislators are performing their prescribed duties with greater efficacy. According to Meinke and Hasecke, not only has the volume of legislative passage increased, but the quality of legislation has changed too as a direct result of term limits. They argue that “…while member characteristics have changed little…behavior has shifted away from the pursuit of pork and toward policy…the party has lost influence over legislative decisions while the governor has gained power.” (900) All of this evidence seems to suggest that not only is there popular support for legislative term limits, but that they seem to have a direct reversing effect on the negative aspects of careerism.

The debate carries its share of caveats as well. Daniel Smith argues in Overturning Term Limits: The Legislature’s Own Private Idaho? that not only do legislators repeal statutory term limits, but that those limits have negative consequences for rural districts that have a difficult time fielding candidates. (2003, 215-216) The outcome, then, is not only that term limits exclude a specific cross-section of socio-economic life from representative access, but that legislators will overturn whatever limitations and sanctions are placed upon them. Bandow reinforces this idea, arguing that once legislators have achieved political power, “…they are undoubtedly reluctant to relinquish it, let alone relinquish it quickly.” (2) In Congressional Term Limits, State Legislative Term Limits and Congressional Turnover: A Theory of Change, Patrick Fett and Daniel Ponder report that “In Powell v. McCormack the Supreme Court determined that Congress could not add requirements to holding a seat in Congress above those expressly stated in the Constitution.” (212) Powell v. McCormack casts a self-frustrating, if not altogether self-defeating, light on the institution of term limits.

Other existing institutional factors cripple the case for term limits. Fett and Ponder suggest that there are two options for enacting legislative term limits at the federal level: state imposition of limits on federal candidates or a Constitutional amendment (which itself diverges on two subsequent avenues). In the case of state-imposed limits on MCs, they argue that “Either the courts or Congress will negate them.” (212) They go on to posit that while Article I Section 4 Clause 1 of the United States Constitution provides that “The times, places, and manner of holding elections for Senators and Representatives shall be prescribed in each state by the Legislature thereof…” and the 10th Amendment reserves states’ rights to them, the latter part of Article I Section 4 Clause 1 states that “…Congress may at any time by law make or alter such regulations.” Thus, it is unlikely that states can pass any statutory limits on federal representatives with sufficient authority. They also hold that the passage of a Constitutional amendment is highly unlikely. The first of the two divergent modes of passage is the supermajority vote in both houses. However, as we have seen, Bandow establishes the unlikelihood of such an event. The second mode is passage via a special constitutional convention initiated by a slate of 34 states. But Fett and Ponder argue that “Congress has much discretion at several points in the convention process that enables it to impede or smooth the road to ratification as the members collectively see fit. The threatening nature of tenure limits makes it highly probable that the road would be quite bumpy for such an amendment.” (213)

Conventional wisdom also suggests that term limits are undemocratic; people ought to have the right to elect a representative of their choosing, and if they wish to return an incumbent to Congress for twelve terms that is their prerogative and political freedom. Any attempt to encroach upon this certainly would be an insult to our ability to make an educated and informed decision. Legislators fear that states will lose their sovereignty, as 9-term incumbent Idaho House Representative Doug Jones says, “We have to look at the total system, what’s right for the state of Idaho. If people don’t like the way I vote, they should get rid of me.” (Smith, 215) Meinke and Hasecke substantiate Jones’ fear in arguing that “…deinstitutionalization will lead not only to measureable partisan consequences but also shifts in power ‘to the governor, to executive bureaucracies, to interest groups and lobbyists…institutional memory and institutional commitment will decline…” (907) Certainly we have herein examined a substantial number of objections to the viability and substantive outcomes of legislative term limits.

Fett and Ponder posit a solution that makes a good deal of albeit theoretical sense. They argue that if the codification of legislative term limits at the federal level is both self-frustrating and self-defeating, then perhaps we ought to focus on drawing upon the plebiscitary strength of passing legislative limits at the state level. Certainly if state legislators did not acquiesce, we could, as Jones pointed out, punish our representatives at the polls. If we cannot curb the tendency toward professionalization of offices or careerism of candidates, then we can us it as strength for the cause of term limits. Placing a ceiling on service at the state level would force career politicians to seek office at the federal level, thus encouraging politicians to challenge incumbents. (214) Incumbents might still hold their advantage, but many of them win uncontested seats at the federal level; few of them experience the pains of challenge and those that do, like Joe Schwarz of Michigan, do not always win despite their inherent advantage over challengers. (Sidlow, 2007, 152)

There are a few drawbacks to Fett and Ponder’s state ceiling model. First, there is no guarantee that the measure would produce the desired effect. Even the authors admit that their claim is largely theoretical and that patient and persistent study of the effects of term limits as they unfold will yield the necessary data to make a substantial normative judgment. (215) Further, opponents might charge that limiting the number of terms a legislator may serve will pave the way for either a) a bureaucratic ruling class, or b) the rise of perennial political bottom-feeders and basement-dwellers to positions of actual importance. Are these objections coherent or substantial? Are they indicative in any way of the advent of a larger institutional problem? Donald Kettl’s punctuated backsliding model in System Under Stress: Homeland Security and American Politics argues that “Congress exerts a stronger pull on most federal agencies than does the president.” (2007, 137) Certainly this must be true at the state level as well; legislative bodies must then become more aggressive in their oversight of government programs.

We ought to include in the state ceiling model a built-in mechanism to turn a small portion of the legislature at any one time, perhaps 20-25% of the total body at any one time. A minority turnover would ensure the availability of enough experience to help educate and help freshman legislators while at the same time enabling the use of the roll-call votes of a 75-80% majority to amend and eradicate earmarks. We ought not to worry about the rise of inexperienced politicians anyway; the United States set a precedent when farmers and plantation owners informed the authoring and ratification of the U.S. Constitution. This is to say that nobody is inherently a good legislator; the pains of experience help shape talent and ability. In fact, Bandow argues that talent and ability are “stimulated by the prospect of future employment and smothered by the monopoly of experience.” (3) While others still might argue that term limits already exist and that constituents already have the ability to throw legislators out of office, and that while low voter turnout may not be a sign of apathy inasmuch as a sign of consent to the status quo, the fact remains that they aren’t getting up off the couch to cast their vote. The only way to measure someone’s voter rationale without invading their home or detaining and torturing them would be to conduct a survey. What is the likelihood that they would participate in a survey about voting if they aren’t voting in the first place? Finally, one of the biggest worries facing opponents is the unintended funneling or siphoning of political power into the executive. This ought not to worry us, for the cultural/ historical legacy established by the events following 9/11 and Hurricane Katrina demonstrates Congress’ inherent inability or unwillingness to appropriately respond to national emergencies; in times of national crisis, their deliberative characteristic is a cancerous tumor. The most basic argument we can make about legislative term limits is that until they have been around for awhile and we have developed reliable quantitative methods for measuring their effects, there is no way to tell whether or not they will solve our woes. Enough evidence, both practical and theoretical, exists to establish that there is a serious problem with legislative behavior. There also seems to be enough research already to suggest that term limits will reverse the negative effects of careerism; when taken with our theoretical knowledge this research provides us with both a motivation and framework to give term limits a practical chance. Bandow summed it up best when he wrote “…the goal of encouraging citizen legislators rather than career politicians warrants accepting any minor drawbacks that might result from term limits.” (4) Idaho showed us that if future studies demonstrating term limits to be a mistake, no matter what the driving ideology is in characterizing them as such, we can change them. Why not give them a try?

Works Cited:

Bandow, Doug. (1995) Real Term Limits: Now More Than Ever. Cato Policy Analysis, No. 221, pp. 1-4. Retrieved from the World Wide Web here.

Bowser, Jennie. (2007) The Term Limited States. National Conference of State Legislatures: The Forum for America’s Ideas. Retrieved from the World Wide Web here.

Davidson, R., Oleszek, W., and Lee, F. (2008) Congress and Its Members. Washington, DC: CQ Press.

Enemark, D., and Cross, J. (2002) Term Limits Have Changed California’s Legislative Behavior. University of California- Berkeley Institute of Governmental Studies Public Affairs Report, Vol. 43, No. 2, pp. 1-3. Retrieved from the World Wide Web here.

Fett, P., and Ponder, D. (1993) Congressional Term Limits, State Legislative Term Limits and Congressional Turnover: A Theory of Change. PS: Political Science and Politics, Vol. 26, No. 2, pp. 212-215. Retrieved from JSTOR Database here. (JSTOR subscription required)

Kettl, Donald. (2007) System Under Stress: Homeland Security and American Politics. Washington, DC: CQ Press.

Mayhew, David. (2005) Divided We Govern: Party Control, Lawmaking, and Investigations, 1946-2002, 2nd Ed. New Haven: Yale University Press.

Meinke, S., and Hasecke, E. (2003) Term Limits, Professionalization, and Partisan Control in U.S. State Legislatures. The Journal of Politics, Vol. 65, No. 3, pp. 899-907. Retrieved from JSTOR Database here. (JSTOR subscription required)

Smith, Daniel. (2003) Overturning Term Limits: The Legislature’s Own Private Idaho? PS: Political Science and Politics, Vol. 36, No. 2, pp. 215-6. Retrieved from JSTOR Database here. (JSTOR subscription required)

Yang, Kelly. (2002) Term Limits Get Too Much Credit for Boosting Minority and Female Representation. University of California- Berkeley Institute of Governmental Studies Public Affairs Report, Vol. 43, No. 2, pp. 1-2. Retrieved from the World Wide Web here.

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Corporations are bailing out…the Government? On Congress, Corporations, and Accounting Gimmicks

Posted by stackiii on February 9, 2009

In 2006, a new three-percent withholding measure – known as Section 511 – was added without debate to the Tax Increase Prevention and Reconciliation Act (TIPRA) when the bill came before the Conference Committee. The new rule requires that federal, state, and local governments withhold three percent from all payments for goods and services, including Medicare payments, farm aid, and grants to for-profit entities.

Section 511 aims to collect unreported tax revenues from contractors who default on income tax payments, and will take effect in 2011. In the final days of the 109th Congress, some Members endeavored to accelerate the implementation date of this provision to raise revenue for new discretionary appropriations. Under current “pay-go” rules, which attempt to hinder deficit spending in discretionary programs, Members of Congress will continue to try to accelerate the implementation date.

Section 511 will have a significant impact on the nation’s economy, especially the contracting community. The administrative costs to the government, as well as to companies, are substantial. Companies’ internal systems are not set up to track these payments, nor are government systems set up to receive such payments.

In reality, Section 511 is an interest-free loan from the contractor community to the government. The $7 billion in “increased revenue” derived from this legislation from 2011 to 2015 represents the contractors’ tax payments to the government in advance, via the 3% withholding. However, this provision only generates $215 million of improved tax compliance in 2012 and increases slightly in each of the following years. Companies will be able to recover the difference of the 3% withholding and their respective tax liability when they file their returns each spring. This means that over $6.5 billion of the estimated $7 billion of revenue comes from an accounting gimmick.

A recent Department of Defense study indicated that, for its portfolio of contracts alone, the cost of implementing the 3% withholding program would require approximately $17 billion in government expenditures. If the aim of the withholding is to raise $7 billion in revenue, DoD’s contract spread alone makes the program a $10 billion loser.

The withholding will be especially burdensome on small businesses that function on a very small profit margin (most function on a 2-2.6% margin). Many small businesses will be forced to either incur higher levels of debt, ensuring the regular cash flows necessary for day-to-day operations, or abandon their work with the government altogether. When most businesses foresee an increase in operating cost, that cost is usually passed off to the consumer in the form of a price increase. The financial burden of this provision will flow down to subcontractors and ultimately cost the taxpayer more because of increased prices.

Section 511 is an unfunded mandate on state and local governments. Federal tax compliance enforcement is the function of the IRS, not of the state and local governments, or of Congress for that matter. This program is an unfair burden on lower levels of government. Congress must repeal Section 511 of the Tax Increase Prevention and Reconciliation Act of 2005 (P.L. 109-222) to avoid a staggering price increase which will burden consumers in a flagging national economy and global recession and will create a bureaucratic nightmare at the state and local levels.

Posted in Legislature, Politics | Tagged: , , , , , , , , , , , , , , , , , , , | 1 Comment »