The Fighting 29th

All about New York's 29th Congressional District

Late last night, the House passed another war funding measure with strings attached.  The current set of strings is a withdrawal by next Christmas, and no torture.   The vote was almost identical to the last round of war funding bills.  Two more Republicans voted for funding.  Randy Kuhl, almost all the Republicans, and a small group of liberal and conservative Democrats voted against.   The measure will be vetoed, apparently after a filibuster in the Senate.

Exile at Rochesterturning also found an item in Politico that details the Democrats new strategy on S-CHIP.  The latest threat is to extend the current program until a month before the 2008 elections, and then force a showdown vote. 

The Democrats are clearly betting that the general public will view the Republicans as obstructionists who block legislation that everyone wants.   That strategy may work, but I also think the Democrats run the risk of appearing as obstinate and stubborn as Bush, with the added bonus of the reek of impotence.   The current leadership doesn't seem to be searching very hard for fault lines in the Republican minority, especially on S-CHIP.   And the notion that they are failing to do so because they are standing on principle isn't supported by facts.  When you rush a vote to  confirm an Attorney General who can't say that waterboarding is torture, and when you're on the verge of giving telecoms immunity from illegal, widespread wiretapping, then your grasp of principle is a little weak.

The Ontario Republican notes that the recent Democrat and Chronicle Op-Ed on S-CHIP, signed by two Rochester Labor leaders, is boilerplate that's appeared in a number of other newspapers.  

The issue here isn't the content of the letter, or the fact that it's boilerplate:  talking points are talking points, and I'm sure the labor guys who signed the letter weren't the first ones to try to slip one by the editors at the D&C.  The issue is the blind reprint of the letter as an op-ed by an editorial board that is constantly trumpeting its high journalistic standards.  I thought the Republican put it well:

Now, question to the D&C Editorial Board: Is it your policy to publish cut and paste editorials, or is it too hard to do a simple Google search to verify whether the content of the editorial you have hasn't been published elsewhere?

Rep. Kirsten Gillibrand is a Democrat from Albany (NY-20) in her first term.  In her first few months in office, she's started two common-sense efforts that both serve her constituents and increase transparency.

First, she's published her daily schedule on her website.  This might seem like a small thing, but she's one of a half-dozen members (and two senators) who do so.

Second, she's tried to increase the number of grant applications in her district.  According to a Albany Times-Union story,  she's had her staff launch a "grants central" section of her website to help connect constituents with available federal grants.  As I've explained here earlier, the grant process is far more transparent than earmarks, since it requires that grant applicants meet a set of requirements mandated by law and supervised by non-political federal appointees.

These are two simple, non-partisan, good government reforms.  The 29th deserves the same level of transparency from its representative.

(Thanks to the Albany Project for posting about the Times-Union story.)

The recent tax vote brought a predictable outcry from Republicans.  Randy Kuhl's blog headline, "AMT - 130 Percent Tax Hike", portrays the pay-as-you-go provisions of the tax bill as an economy-depressing tax hike.  The current Republican position is that an AMT cut is a great thing, but we should just cut it without enacting a corresponding paygo tax increase.

Tax cuts, and damn the consequences, is great sloganeering, but unpleasant fiscal realities are beginning to intrude on this rosy picture.  Here's one:  the dollar is at 50-year lows compared to some other currencies.  Much of the dollar's fall is due to the need for low interest rates to weather the mortgage crisis, but some of it is simply market reaction to the inability of the United States to keep its fiscal house in order.
Here's what the Wall Street Journal says:

To understand the dollar's current woes, you have to look elsewhere -- to monetary policy and economic management. The supply of dollars in the world is ultimately controlled by a single source, the Federal Reserve. With its aggressive easing in September, and again in late October, the Fed has signaled to the world that it cares more about creating dollars in the hope of limiting U.S. credit problems than it does about the dollar's value. Investors can see this, and so they are dumping dollars and looking for other assets to hold.

[...]

Our current financial woes are in large part the result of previous monetary excess, which fueled a debt and asset boom that has become a banking bust. The way to emerge from the mess is to slowly but honestly work off the bad debt and write down the losses. The one sure way to make things worse is with more monetary excess.

When the Journal talks about "monetary excess", they're referring to the insanely low interest rates that were used to stimulate the economy earlier this decade.  Those interest rates fueled the mortgage boom.  As a Nobel-Prize-winning economist put it in this month's Vanity Fair:

[...] the job of economic stimulation fell to the Federal Reserve Board, which stepped on the accelerator in a historically unprecedented way, driving interest rates down to 1 percent. In real terms, taking inflation into account, interest rates actually dropped to negative 2 percent. The predictable result was a consumer spending spree. [...] Credit was shoveled out the door, and subprime mortgages were made available to anyone this side of life support. Credit-card debt mounted to a whopping $900 billion by the summer of 2007.

This economist was the head of President Clinton's board of economic advisors, so Republicans might want to be skeptical about his views of the economy.  But it looks to me that he and the Journal are saying the same thing:  lowering interest rates is a trick that isn't going to work much longer. 

So what does this have to do with tax cuts?  Simply this: we must borrow money to finance tax cuts.   And the markets are going to require that we raise interest rates if we want to keep borrowing.  So it will cost a lot more to borrow the money to finance tax cuts in the future.  That old saw, "mortgaging our children's future" takes on new meaning when the mortgage rate keeps going up.

Here's a chilling passage from the Vanity Fair article:

A large portion [of the monetary crisis] will take decades to fix—and that’s assuming the political will to do so exists both in the White House and in Congress. Think of the interest we are paying, year after year, on the almost $4 trillion of increased debt burden—even at 5 percent, that’s an annual payment of $200 billion, two Iraq wars a year forever. Think of the taxes that future governments will have to levy to repay even a fraction of the debt we have accumulated.

Randy Kuhl, and other members of his party, would rather not think about it.  If raising taxes is taboo, what's the alternative?   This is the challenge for Republicans, and all their anti-tax rhetoric isn't going to change the fix we're in.

Randy Kuhl voted against the Temporary Tax Relief Act of 2008, in a party-line vote this afternoon.  Like all tax legislation, this bill is complex.  The Democratic line on the bill is that it rolls back the Alternative Minimum Tax for a year, and finances it by increasing taxes on private equity fund managers and other rich folks.  Representative Kuhl's view is that it is "an egregious tax hike on entrepreneurs and risk-takers who invest and create family-wage jobs."

The independent site Washington Watch, which is run by a member of the Cato Institute, a conservative/libertarian think tank, calculates that the bill will save the average US family $91.50 from their tax bill.  The Congressional Budget Office (CBO) analysis [pdf] says that: 

[...]the bill would treat certain income of partners from performing investment management services (called “carried interest”) as ordinary income for tax purposes, rather than as capital gains, which JCT estimates would increase revenues by $25.6 billion over the 2008-2017 period.

Translation: private equity fund management fees that are being taxed at 15% will soon be taxed at 38%. 

The question is whether private equity funds are "entrepreneurs and risk-takers."  The point of capital gains taxation is to reward those who risk their money in a longer-term investment. Private equity managers have structured their compensation so that it looks like a capital gain in order to get a lower tax rate. I don't think that's the kind of entrepreneurial cleverness the tax code is meant to promote.

Randy Kuhl voted for the United States-Peru Trade Promotion Act, a free-trade agreement.  This agreement is interesting because it passed on a split vote in a political climate that is becoming more hostile to open trade.  One of the reasons the bill passed was the inclusion of a provision for more regulation of Peru's timber industry.  According to the Economist magazine (subscription req'd):

Greens say that under the new system, just like the old, much of the timber exported from Peru (officially $200m last year) is cut illegally, with the connivance of the authorities. They have won the support of the Democrats in the American Congress, who insisted on inserting a “timber annexe” in the free-trade agreement with Peru. This gives Peru 18 months to hire more forestry inspectors, set up a stronger forestry regulator and stiffen penalties for illegal logging. It will also allow American officials to halt suspicious shipments at the border, and to visit Peru to see where they come from.

In addition to the notion that free trade "exports jobs", it also is criticized for enabling unsustainable exploitation of natural resources.  If Peru actually enforces the treaty (a big "if" considering their track record), at least the latter criticism might be addressed.

Kuhl voted against the Homeowners Defense Act, which appropriated money to shore up state insurance programs that protect against natural catastrophes.

County and municipal elections are Tuesday in the 29th.  Since most of the municipal and county officeholders in the 29th are Republicans, Democrats typically have an uphill climb, especially in the Southern 29th.  In the North, the city of Rochester is heavily Democratic, and one would think that the Monroe County Democratic Committee (MCDC) should be able to extend its reach into the more Republican suburbs. 

However, as I posted/ranted earlier, the MCDC is so ineffective that it couldn't even field a candidate for County Executive, and I pretty much wrote off this race as a foregone Republican win.  Since my last discussion of this issue, two events have occurred that have shaken up the race.  The first is Governor Spitzer's license plan, and the second is the "FAIR" tax plan. In my very Republican part of the world, Pittsford in Southeast Monroe County, it looks that the latter is a major mis-step that might lead to a Democratic upset.
The "FAIR" plan is a tax-reallocation plan that, among other things, removes about half of the county's aid for schools from the current school budgets.  In Pittsford, the schools are scrambling to make up for a $1 million shortfall this year, and a $2 million shortfall next year.  In a district where schools regularly make "top 100 in the nation" lists, this is a big deal.   On Friday, I received a four-page, detailed mailing [3 meg pdf] from the Pittsford superintendent of schools.  It criticizes both the results of the FAIR plan, and the non-collaborative process under which it was adopted. 

Such a mailing is unprecedented - I've lived here for more than a decade and never seen anything as political.  It's also interesting to compare it to two of the mailings I received from Pittsford Democrats.  The first mailing [pdf] was sent to me personally, and is more detailed.  The second [pdf] was sent to "the Rottenchester family" and contains some feel-good pictures and a few bullet points.  Both are state-of-the art political mailings, and both assume that the attention span of the average voter is somewhere between the common housefly (musca domestica) and a restless toddler.  The Pittsford Schools, having educated a good percentage of the town's residents, take a different view, and their mailer contains facts and argument instead of slogans.

Don't get me wrong -- the Pittsford Dems mailing is a quality product by the standards of the trade, and it was delivered in a timely manner to the right person (a registered Democrat).  As reader Mike writes to point out, the Pittsford Democratic candidate for County Legislature, Ted Nixon, is also running a good campaign.  I haven't received any Nixon mailers, but, unlike his opponent, Anthony Daniele, he has a website, and he posts YouTube videos there regularly.

Nixon's most recent video concerns the recent Republican mailers about Governor Spitzer's Drivers License plan.  As Rochesterturning first reported, one of the mailers is an over-the-top depiction of "terrorists" getting licenses.  I didn't get that mailer, but I did receive a card from Assemblyman Joe Errigo last week that criticized Spitzer's plan.  I didn't save that mailer, but Errigo has a petition [pdf] on his site that contains the substance of his critique.  Errigo's mailer is an example of how state and local party officials are able to coordinate to transmit the Republican message prior to an election.

Though the license issue is a statewide one, the county Republicans have made immigration an issue because of the County Clerk's role in issuing licenses, and also because of the negative reception of the FAIR plan.  The question is whether the license issue, which is essentially one of ideology, will trump FAIR, which has practical, immediate effects on local schools.  My guess is that FAIR will get more voters to the polls.

In Pittsford, Anthony Daniele, who is a solid young candidate with strong community ties, has been forced to make pronouncements like this about FAIR:

"It is certainly a hurdle,” he said, adding that he supports the plan. “I believe the schools can do a better job of tightening their belt.”

The only thing I've ever heard Pittsford residents say that their schools should do "a better job of" is educating kids.  I've been at a meeting where parents complained that the school did not teach Mandarin to sixth graders.  Belt-tightening doesn't lead to "top 100" schools, and I'm sure that Daniele, who's running for an open seat that's been historically Republican, would rather be talking about anything else in the lead-up to the election.

Though FAIR has probably put some local and county seats in play that were safely Republican, it should also serve as an object lesson to the MCDC.  Fortune favors the prepared.  If the Monroe Dems had a candidate for County Executive, they'd have a spokesperson who would be able to lead and coordinate their FAIR story. As it stands now, their candidates are on their own.  The complacency of the Monroe Democratic leadership is as astonishing as it is unforgivable.

Today's Star-Gazette story on the new Spitzer Drivers' License plan quotes most of Chemung County's elected officials in opposition to the plan.  Randy Kuhl gets a lick in, too:

I am saddened that the Bush administration would agree to this dangerous and potentially destructive plan.

The Spitzer plan is a gift to Kuhl that just keeps on giving:  he can oppose it vehemently to appease those angry with his position on guest workers,  and he can use it so show that he's not a rubber stamp. 

Governor Eliot Spitzer and Homeland Security Secretary Michael Chertoff have announced a new compromise on drivers' licenses for illegal immigrants.  Both Randy Kuhl and Eric Massa are on record opposing the original plan. The new proposal would issue two classes of licenses.  Those who can prove residency will be issued a RealID license, and those who can't will get a license to drive with restrictions on its use for boarding airplanes or crossing borders.  As part of the compromise,  New York will be one of the first states to issue RealID licenses.  

If a successful compromise is one that leaves both sides unhappy, then Spitzer's new plan is a big win.  Immigrant groups are calling the new, second class license a "scarlet letter".    Those who opposed Spitzer's earlier plan point to the extra expense of issuing two kinds of licenses.  And county clerks in Erie and Niagara counties are planning to call the sheriff to arrest anyone they suspect is an illegal immigrant applying for a license.

I didn't have an objection to Spitzer's earlier plan, because I don't think that it's the state's business to become immigration police.  But his endorsement of the intrusive and pointless RealID program now has turned me against it.  Since nobody is happy with issuing illegals second-class licenses, I'll bet that the final outcome will probably be no license for illegals, and RealIDs for the rest of us.   Our highways won't be any safer, but we'll all be packing a big-brother identity card.

In the 29th, this controversy has handed Kuhl and his supporters some easy talking points.  I listened to some of the Bob Lonsberry show twice this week, and this issue had big play in both of the snippets I heard.  Lonsberry's position is that the license will actually attract illegals to New York.   That's consistent with his usual tactic of pushing illegal immigrants as scapegoats for the lackluster Southern Tier economy.  I've shown why this is a fantasy in an earlier post.  In this case, however, Bob has it pretty easy, because there seems to be something inherently wrong about county clerks issuing legal documents to people who are breaking the law.

That perception of a basic injustice is what's going to keep driving this controversy, as it does the whole illegal immigration mess.   The national polling on this issue shows that most folks would be happy with an amnesty program that's coupled to paying fines or back taxes, they want to increase security at the border, and they believe legal immigration benefits our country.    But Congress can't seem to pull the trigger on a compromise containing security, earned amnesty and realistic quotas for Mexico, Central and Latin America.   Until some national compromise is reached, the pressure caused by illegal immigration will be ventilated periodically by dust-ups like the drivers' license controversy.  Why Eliot Spitzer wanted to stick his hand into this barrel of scorpions is beyond me, but he hasn't done his reputation any favors in the 29th.

A slightly altered version of the S-CHIP passed the House this afternoon with exactly the same number of yes votes as the original S-CHIP legislation.  Randy Kuhl voted against the bill. 

I haven't studied the changes in the bill closely, but they don't sound like the product of a compromise, judging from this National Journal article.   A recent Kuhl blog post echoes the complaints of his leadership:  the vote was held without enough advance notice, and without California members who were back in their districts because of the recent fires.

It sounds like the House Democrats are taking some advice from Senator Chuck Grassley, an Iowa Republican who supported S-CHIP in the House:

Grassley has suggested that, were he a Democrat, he would send the SCHIP measure to Bush repeatedly until the president agreed to sign it.

From the media reports, it sounds like both sides in this debate have wedged themselves into intractable positions.  Republicans like Kuhl have taken a big hit for their opposition to S-CHIP, and they've responded with a lot of red-hot rhetoric about the bill.  They need some tangible changes in the bill to justify changing their votes.  Democrats see how well S-CHIP polls, and are under fire from their constituents for their failure to end the war in Iraq.  With 43 Republicans on their side, they've chosen S-CHIP as a bi-partisan effort to get a few more Republicans accustomed to voting against their party.   This is a recipe for stalemate, and it looks like we're going there sooner, rather than later.

And, by the way, both MoveOn and AFSCME are launching still more ads in the district to publicize Kuhl's  vote.