INDIVISIBLE Lambertville NJ / New Hope PA

Category: Money/Spending

  • Dark Money Impact: Winning PA-01 in 2018

    Contributed by Kierstyn Pietrowski Zolfo.

    The next SpringBoard event will focus on the role of dark money in our political system. While people may have different conceptions of what dark money means, for the purposes of this exploration it refers to any political donations that are made to groups – political action committees (PACs and SuperPACs) and so-called, “social welfare organizations,” also known as 501(c)(4) group, who are allowed to engage in political lobbying and political campaign activities.

    Of particular concern to our area is the part that dark money played in the 2018 election in PA-01 and the re-election of Congressman Brian Fitzpatrick. The PA-01 congressional race was among the top 5 most expensive House races in the country for 2018, and while some of that can be attributed to direct spending by Democratic candidate, even more of that came from dark money on the GOP side.

    Many politicians have their own PACs that are affiliated with their name and candidacy. Such groups raise money by holding events with the politicians present and giving speeches about their political goals… but then they step out of the room while the money folks gather up the donations.  One such event was held on Washington Crossing Road in October 2018, with then-House Speaker Paul Ryan present to fundraise for his PAC, the Congressional Leadership Fund (CLF). The CLF opened their district office in Bucks County in September 2017 to prepare for the 2018 race. By the end of the campaign cycle, the CLF had spent over $4.4 million – that we know of – to support Brian Fitzpatrick.

    While Paul Ryan’s PAC was the largest of the candidate-affiliated groups to pour money into PA-01, it certainly was not the only one spending money in Bucks County. The Great America Committee (VP Mike Pence), Majority Committee (then-House Majority Leader Kevin McCarthy), Eye of the Tiger PAC (then Majority Whip Steve Scalise) and Citizens for Prosperity (Sen. Pat Toomey) were among nearly a dozen groups to spend on this race in 2018.

    Another way that dark money was funnelled into this race was from millionaire backers. Two individuals in particular played outsize roles in bringing dark money into PA-01: Elliott Broidy and Sheldon Adelson.  Both of these men used the intricacies of campaign finance law to pour outside money into our area to help Brian Fitzpatrick, but each did so in different ways.

    Sheldon Adelson concentrated his efforts on giving directly to PACs.  A review of his expenditures during the 2018 cycle show a shocking amount of money changed hands. This is just a sampling of his donations as reported on Open Secrets, some of which found its way here.

    Recipient Date Amount
    Congressional Leadership Fund 05/03/18 $15,000,000
    Congressional Leadership Fund 09/12/18 $10,000,000
    National Republican Congressional Committee 06/30/18 $237,300
    Republican Jewish Coalition (RJC) 10/16/18 $125,000

    Adelson also gave directly to Fitzpatrick’s campaign, and a number of smaller donations to many of the politician-affiliated PACs, who in turn gave to Fitzpatrick.

    Elliott Broidy has a name that may be familiar to those of you who closely follow Trump news.  He is the third client of Michael Cohen (the other two being President Trump and Fox News host Sean Hannity). This former Finance Chairman of the Republican National Committee paid a Playboy Playmate mistress to have an abortion, has major financial ties to Manafort-aide Rick Gates, and most recently had his house raided by the FBI in an investigation about conspiracy, money laundering, and covert lobbying on behalf of foreign officials.

    Broidy orchestrated the first round of attacks on Democratic candidate Scott Wallace in June 2018.  Wallace was ‘welcomed’ into the general race with over a half million dollars in RJC advertisements smearing Wallace unjustly as an anti-Semite. That set the tone for the race, but since it was done by an outside expenditure group on behalf of Fitzpatrick, instead of from Fitzpatrick himself, the candidate was able to claim plausible deniability from this awfulness. It should also be noted that Broidy donated to many of the same PACs that received funding from Adelson, who in turn spent money in PA-01.

    With PA-01 as one of the most contentious swing districts in the country, and with our location in an expensive media market, we are going to see more and more dark money and outside money coming in to affect our local races. We need to stay on top of this issue, and develop effective messaging strategies to counteract the effect of all this outside money, or else we will be overpowered in future races.

    Call to Action: Mark your calendars for the next Springboard event on Dark Money and be sure to attend! June 3, 2019 – Location TBD

  • Just the Facts: Dark Money

    Contributed by Olga Vanucci.

    What is dark money?  It’s political spending meant to influence the decision of a voter, where the donor is not disclosed and the source of the money is unknown.

    Sources of dark money include:

    501(c)(4):  “social welfare” organizations such as the NRA, Sierra Club, Indivisible

    501(c)(5):  labor unions

    501(c)(6):  business groups such as the Chamber of Commerce

    Shell companies set up as LLCs can collect unlimited money from unreported sources.

    The 501(c)s can collect unlimited donations from unreported donors, though a recent Supreme Court decision is changing that: donations over $200 will have to be reported. On the flip side, they cannot engage solely in politics and can only coordinate on a limited basis with campaigns.

    Super PACs are not dark money in that they have to report their donors. They can collect unlimited money and can be 100% political, but cannot coordinate with political campaigns.

    However, 501(c)s and shell LLCs can donate money, which they collected from unreported donors to Super PACs, turning Super PACs into dark money.

    Candidate committees, political parties, and traditional Political Action Committees (PACs) are not dark money. Their donors must be disclosed, contribution limits apply and organizations are allowed to coordinate their efforts to help elect a candidate.

    Dark money spending in the first year of the 2016 election cycle was 10 times more than it was at the same point in 2012. Dark money spending in 2012 was three times more than it was in 2008, and dark money spending in 2008 was 17 times more than it was in 2004.

    Dark money has been almost entirely spent to favor Republican candidates.  For example, by October 2015, $4.88 million in dark money had already been spent for the 2016 election cycle. The money was spent by six groups – five conservative groups (including the U.S. Chamber of Commerce, which spent $3 million, and Americans for Prosperity, which spent $1.5 million) and one liberal group (Planned Parenthood, which spent just under $75,000).

    Sources:
    https://www.opensecrets.org/dark-money/

    https://www.theatlantic.com/politics/archive/2018/09/supreme-court-lets-stand-a-decision-requiring-dark-money-disclosure/570670/

    https://en.wikipedia.org/wiki/Dark_money

    https://ballotpedia.org/501(c)(4)

  • Civics 101 – The Federal Budget Process – Courtesy of the National Priorities Project

    Contributed by Deb Kline.

    Who Decides the Federal Budget?

    The vision of democracy is that the federal budget – and all activities of the federal government – reflects the values of a majority of Americans. Yet many people feel that the federal budget does not reflect their values and that the budgeting process is too difficult to understand, or that they can’t make a difference.  Many forces shape the federal budget. Some of them are forces written into law – like the president’s role in drafting the budget – while other forces stem from the realities of our political system. And, while the federal budget may not currently reflect the values of a majority of Americans, the ultimate power over the U.S. government lies with the people. We have a right and responsibility to choose our elected officials by voting, and to hold them accountable for representing our priorities. The first step is to understand what’s going on.

    An Evolving Process

    The U.S. Constitution designates the “power of the purse” as a function of Congress.1 That includes the authority to create and collect taxes and to borrow money when needed. The Constitution does not, however, specify how Congress should exercise these powers or how the federal budget process should work. It doesn’t specify a role for the president in managing the nation’s finances, either.

    As a result, the budget process has evolved over time. Over the course of the twentieth century, Congress passed key laws that shaped the budgeting process into what it is today, and formed the federal agencies – including the Office of Management and Budget, the Government Accountability Office, and the Congressional Budget Office – that provide oversight and research crucial to creating the budget.

    Before the Budget

    Congress creates a new budget for our country every year. This annual congressional budget process is also called the appropriations process. Appropriations bills specify how much money will go to different government agencies and programs. In addition to these funding bills, Congress must pass legislation that provides the federal government with the legal authority to actually spend the money.3 These laws are called authorization bills, or authorizations. Authorizations often cover multiple years, so authorizing legislation does not need to pass Congress every year the way appropriations bills do. When a multi-year authorization expires, Congress often passes a reauthorization to continue the programs in question.

    Authorizations also serve another purpose. There are some types of spending that are not subject to the appropriations process. Such spending is called direct or mandatory spending, and authorizations provide the legal authority for this mandatory spending.4 Federal spending for Social Security and Medicare benefits is part of mandatory spending, because according to the authorization, the government must by law pay out benefits to all eligible recipients.

    How Does the Federal Government Create a Budget?

    1. The President submits a budget request to Congress – The president sends a budget request to Congress each February for the coming fiscal year, which begins on Oct. 1.
    2. The House and Senate pass budget resolutions – After the president submits his or her budget request, the House Committee on the Budget and the Senate Committee on the Budget each write and vote on their own budget resolutions.
    3. House and Senate Appropriations subcommittees “markup” appropriations bills – The Appropriations Committees in both the House and the Senate are responsible for determining the precise levels of budget authority, or allowed spending, for all discretionary programs.
    4. The House and Senate vote on appropriations bills and reconcile differences – The full House and Senate then debate and vote on appropriations bills from each of the 12 subcommittees.
    5. The President signs each appropriations bill and the budget becomes law – The president must sign each appropriations bill after it has passed Congress for the bill to become law. When the president has signed all 12 appropriations bills, the budget process is complete. Rarely, however, is work finished on all 12 bills by Oct. 1, the start of the new fiscal year.

    This chart shows how all of these pieces fit together to make the annual federal budget process.

    Continuing Resolutions and Omnibus Bills

    When the budget process is not complete by Oct. 1, Congress may pass a continuing resolution so that agencies continue to receive funding until the full budget is in place. A continuing resolution provides temporary funding for federal agencies until new appropriations bills become law. When Congress does not pass a continuing resolution by October 1, it can result in a government shutdown, such as the longest one in history which was conducted under the Trump administration.

    When Congress can’t agree on 12 separate appropriations bills, it will often resort to an omnibus bill – a single funding bill that encompasses all 12 funding areas. The fiscal year 2015 budget was the result of a combined omnibus and continuing resolution enacted by Congress in December of 2014.

    Supplemental Appropriations

    From time to time the government has to respond to unanticipated situations for which there is no funding, such as natural disasters. In these cases the government has to allocate additional resources and do so in a timely manner. This type of funding is allocated through legislation known as supplemental appropriations.

    It’s Even Messier than It Sounds

    So that’s how the budgeting process is supposed to go. And while that sounds pretty complicated, in practice, it’s even more so. Other factors that include the state of the economy, party politics, differing economic philosophies, and the impact of lobbying and campaign contributions also have a considerable impact on the federal budget process.

    About the National Priorities Project: National Priorities Project is the only nonprofit, non-partisan federal budget research organization in the nation with the mission to make the federal budget accessible to the American public. The organization works to inspire individuals and movements to take action so federal resources prioritize peace, shared prosperity, and economic security for all. In 2014, NPP was nominated for the Nobel Peace Prize in recognition of our pioneering work to track federal spending on the military and promote a U.S. federal budget that represents Americans’ priorities, including funding for people’s issues such as inequality, unemployment, education, health and the need to build a green economy.

  • H.R.1 – The Opening Act for the 2019 House of Representatives

    Contributed by Hui Chen.

    The first act of the newly Democrat-controlled House is to give power back to the people and bring ethics back into our government. H.R. 1 – the For the People Act – covers three main areas of reform:

    • Campaign Finance: requiring disclosure of information such as “dark money” and super PAC political donors, of political spending by those who do business with the federal government, of sources for political ads on Facebook and Twitter. It would also provide a matching-fund program for House candidates who agree to raise only small-dollar contributions.
    • Ethics: requiring disclosure of tax returns for candidates for president and vice president – and current holder of those offices; enhance oversight and enforcement power of the Office of Government Ethics; strengthen ethics in the legislative branch by prohibiting members of Congress from using taxpayer money to settle harassment and discrimination cases, and in the judicial branch by creating a new code of ethics for the United States Supreme Court.
    • Voting Rights: creating an automatic voter registration system to change voting from an opt in to an opt out process, promoting early voting, same-day, same-day voter registration, and online voter registration.  It would enhance election security against foreign interference, and end gerrymandering by moving the Congressional districting power from state legislature to independent commissions.


    How would these proposed measures help our democracy?
    Campaign finance reforms helps make our elected officials answer to us as much as they answer to big money. Running for office is a very expensive endeavor. Everything from signs to brochures to television ads and campaign events costs. It’s a reality that creates continuous pressure for those in office to feel beholden to their financiers. The disclosures proposed by H.R.1 would give us transparency to those relationships so that our officials know we would be watching them. The public matching fund for small donations will also shift more power to individual donors like us.

    Government ethics fights corruption and makes sure no one is above the law. Federal government workers, like all other professionals, must abide by strict ethics rules. These rules are there to ensure they conduct government business without the conflict of interest: that laws and regulations are enforced, and contracts and projects awarded, not for their personal benefits or pleasure, but in the interest of the public. The proposed measures under H.R.1 would apply at least some of these rules to elected officials, and to Supreme Court justices.
    Voting rights helps every voter be counted. Our entire democracy is premised on people’s ability to vote. Over the last election, we worked hard for every vote. The proposed measures under H.R. are to make sure every voter gets the best chance to exercise that vote, and that when those votes are counted, they are free from manipulation.


    Call to Action: What can you do to support H.R.1?
    H.R.1 is a large package, and pieces of it are now going into various House committees for deliberation. Find the topics that speaks to you and which committees will be addressing them. Learn the issues, talk to your network, and express your support on social media, in public, and to your representatives. Remember, the overall message of this bill is about democracy and ethics.

    Hui Chen is a member of ILNH and a former prosecutor and expert consultant with the US Department of Justice who publicly resigned due to concerns about ethics in the Trump Administration. As an expert in organizational ethics, she is a regular columnist in Bloomberg Law and commentator on MSNBC. Twitter @HuiChenEthics.

  • TRUMP’S MILITARY AGENDA: Build to Destroy

    Contributed by Lisa Bergson. 

    WHEN ALI HAJAJI’S SON FELL ILL with diarrhea and vomiting, the desperate father turned to extreme measures. Following the advice of village elders, he pushed the red-hot tip of a burning stick into Shaher’s chest, a folk remedy to drain the “black blood” from his son.

    “People said burn him in the body and it will be O.K.,” Mr. Hajaji said. “When you have no money, and your son is sick, you’ll believe anything.”1

    Although not our biggest-ever defense budget — as Trump likes to boast2 — his two-year $1.4 trillion military spending authorization raises issues relating to economics and efficacy. On its face, our military spending should make our country stronger and safer, and, working in tandem with a robust and intelligent diplomatic effort, promote American values of democracy and free trade around the world.  Yet we find presently find ourselves collaborating with Saudi Arabia in a dubious proxy war with Iran, transpiring in one of the world’s poorest countries, Yemen.  There, the Saudis have promoted a strategy of economic strangulation, driving down Yemeni currency, blockading aid, and turning a blind eye to corruption among local coalition-backed officials.3

    This continues the sorry saga of our engagement in The Middle East, where we have been active, at least since the George W. Bush invasion of Iraq in 2003.  The on-going lack of a well-thought-out endgame has plagued our direct and proxy wars, drained our Treasury, brutally damaged our reputation, inflamed terrorism, and exacerbated the refugee crisis.  As bravely illustrated in the New York Times, our tragic engagement in Yemen has put the populace on the brink of mass starvation and led to desperate measures, such as those conducted by Mr.Hajaji, who was trying to save his second son from the fate of his first – death by famine. “All the big countries say they are fighting each other in Yemen,” he said. “But it feels to us like they are fighting the poor people.”4

    At home, the economic impact of our growing emphasis on military build-up is more insidious and may take years to emerge. But already, Trump’s stepped-up military spending, combined with huge tax cuts, has drastically raised our government deficit, fueling inflation, which ultimately threatens our economic stability.  By putting money into non-consumable military expenditures, as opposed to goods and services that people can use, scarcity grows and, with it, higher prices.  That leads to inflation, classically defined as too many dollars chasing too few goods. Think supply & demand.

    Indeed, Trump’s stance is eerily reminiscent of the 1981-1989 Reagan era’s disastrous combination of “trickle down” economics, heavily cutting taxes for the wealthy, and military build-up.5  In what seems almost paltry compared to today’s budget, President Reagan planned to raise military spending from $162 billion in 1981 to $343 billion a year in 1986. Writing in 1981, MIT economist Lester Thurow warned against the potential damage this would have on the economy.  The accuracy of his predictions bears special consideration in our present scenario.

    Thurow foresaw that Reagan’s policies would lead to:

    • Inflation: Thurow sagely predicted “bottleneck inflation” based on the diversion of resources (manpower, materials, money) to military expenditures, leading to a drop in overall productivity. That said, his dire predictions actually fell way short of the real damage that resulted. Thurow wrote (boldface mine):

    If productivity does not recover and the economy’s real growth rate is 3 percentage points less than Mr. Reagan predicts…[and] the President is underestimating 1982 expenditures by $25 billion…. you have a deficit of $111 billion in fiscal 1986.6

    At the end of the day, by 1986, Reagan actually doubled the national debt from $998 billion to $2.1 trillion7!

    • Less innovation: “Since our high-technology civilian industries…demand the same equipment and personnel as our military industries, a rapid military buildup can only occur by taking resources out of the high-technology civilian sectors. The effects are going to be particularly severe in the semiconductor industry since it is going to be facing a Japanese onslaught during the next three years…. [But) our computer industry will be hemorrhaging personnel just when it needs its best brains to survive,” Thurow wrote.

    He was beyond prescient. The U.S. semiconductor industry, which had been in the forefront, fell so far behind the Japanese that the government (we taxpayers) had to pony up $500 million in 1987 for a five-year program run by the Department of Defense to “regain competitiveness”.8,9

    In addition to the damage to our high-tech industry, this writer also saw first-hand how Reagan’s policy sabotaged initiatives to become less carbon-dependent, as one of Reagan’s first budget cuts was to table all of President Jimmy Carter’s programs to develop alternative energy.  (Just think how far ahead of the global warming curve we would be if even a fraction of those projects had come to fruition!)

    To make matters worse, Bill Clinton wound up ripping into the welfare safety net and making other unpopular moves to restore our economy, much as Obama’s efforts to promote a socially progressive and economically restorative agenda were undercut, in part, by pressure to clean-up the enormous Bush deficit. (Someday it would be nice to see the Republicans clean up their own mess – or, then again, maybe it wouldn’t.  In any case, it is always the poor and the middle class who pay the price for these faulty policies.)

    Based on his experience, Robert Reich, Clinton’s former Labor Secretary, offers a lucid account of our current debacle:

    Since taking office, Trump has increased military spending by more than $200 billion. Let’s take a second to look at how else that $200 billion could be spent. We could, for example:

    Offer free public colleges and universities, as proposed by Bernie Sanders.

    And fund the Children’s Health Insurance Program.

    And expand broadband internet access to rural America.

    And meet the growing needs for low-income housing, providing safe living conditions for families and the elderly.

    And help repair the physical devastation in Puerto Rico after Hurricane Maria.10

    Of course, you could argue that protecting our nation is paramount, regardless of the cost to our economy and our civilian programs. But, this assumes that our military strategy is effective. For his part, Reich, now the chancellor’s professor for public policy at the University of California, Berkeley, questions how much of our “bloated” defense budget, more than two times that of China, Russia, Iran, and North Korea combined, goes to waste:

    According to the Pentagon’s own internal figures, the department could save at least $125 billion by reducing operational overhead.

    Out-of-control defense contractors also drive up spending. In the coming years, cost overruns alone are projected to reach an estimated $484 billion. Meanwhile, the CEOs of the top five defense firms took home $97.4 million in compensation last year11

    These days, the rapidly expanding varieties and sophistication of “virtual threats”, like Chinese- backed infrastructure hackers and Russian social media trolls and election meddling, as well as the destructive and scary activities of domestic crazies, such as the recent massacre by a social-media-fueled anti-Semite, and the rise of Trump-inspired militias, like the Ku Klux Klan and the “Proud Boys” are examples of the confounding array of ways to wreak havoc and destruction. There is also a critical need to address the underlying causes of the destabilizing refugee crisis plaguing the west.  Such dislocations are prompted by vast geopolitical forces tied to the impacts of global warming, internecine wars, and terrorism — issues that all the drones in the world cannot eradicate.

    Aside from the lack of a viable endgame in conflict zones, U.S. military spending may be misdirected or, at a minimum, imbalanced with “soft-power” diplomatic, cultural, and economic programs. By way of example, Trump cut U.S.-sponsored “Peace Programs” in Israel that fostered Israel-Palestine musical gatherings and interfaith schools for children, designed to encourage tolerance and appreciation of differing cultures.  “This is my only chance to meet a Palestinian,” a 17-year-old Israeli musician, who loves Arabic music, told NPR’s “Here and Now”.12

    At a time when the threats we face call for a multi-faceted and well-orchestrated approach, our tools for promoting democracy and free trade (assuming these remain, in fact, our goals) become lesser and blunter. Echoing Thurow, Reich writes, “As Trump stokes tensions around the world, he’s adding fuel to the fire by demanding even more Pentagon spending. It’s a dangerous military buildup intended to underwrite endless wars and enrich defense contractors, while draining money from investment in the American people.”

    You that never done nothing
    But build to destroy
    You play with my world
    Like it’s your little toy
    “Masters of War”13 – Bob Dylan

    1. https://www.nytimes.com/interactive/2018/10/26/world/middleeast/saudi-arabia-war-yemen.html
    2. https://www.factcheck.org/2018/07/trumps-defense-spending-exaggerations/
    3. https://www.nytimes.com/interactive/2018/10/26/world/middleeast/saudi-arabia-war-yemen.html?module=inline
    4. ibid.
    5. “Beware of Reagan’s Military Spending”, Lester Thurow, The New York Times, May 31, 1981
    6. https://www.thebalance.com/national-debt-by-year-compared-to-gdp-and-major-events-3306287
    7. https://en.wikipedia.org/wiki/Reaganomics
    8. https://en.wikipedia.org/wiki/SEMATECH
    9. Interesting false history from conservative site, crediting Reagan’s policies for revitalizing Silicon Valley! https://www.u-s-history.com/pages/h1957.html
    10. https://www.newsweek.com/robert-reich-trump-increased-military-spending-over-200-billion-heres-how-983843
    11. ibid.
    12. http://www.wbur.org/hereandnow/2018/11/01/trump-cuts-funds-palestinian-peace-groups
    13. “Masters of War”, Bob Dylan, 1963, https://genius.com/Bob-dylan-masters-of-war-lyrics

     

    A flock of birds fly past the Marine One helicopter with U.S. President Donald Trump aboard, as he returns to the White House after a visit to the Walter Reed National Military Medical Center in Washington, U.S., December 21, 2017. REUTERS/JIM BOURG