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The Vanishing Center
In both political parties, the defense of moderation is no virtue.
Monday, March 15, 2004 12:01 a.m. EST
Both major political parties are increasingly squeezing out moderates, in part because the country is so polarized, and also because each party's primary electorate is becoming smaller and more ideological. Ask John McCain, who was flattened in the 2000 Republican primaries, or Joe Lieberman, whose campaign this year for the Democratic nomination went nowhere.
Interest groups are making it clear they will punish renegade officeholders if they stray too far from party orthodoxy. In primaries in Texas and California this month, liberals flexed their muscle and defeated several Democrats who had shown an ability to work with Republicans. Next month, liberal Sen. Arlen Specter of Pennsylvania, a liberal Republican, will face what appears to be an increasingly formidable primary challenge from Rep. Pat Toomey, who has the support of antitax advocates and social conservatives.
In California, Ted Lempert, a former state assemblyman, lost the Democratic race for a vacant state Senate seat south of San Francisco. The winner, Assemblyman Joe Samilian, had the backing of unions representing prison guards and teachers. Mr. Lempert had expressed skepticism about generous union contracts, and once worked for a group that promoted charter schools.
Ideological enforcers were even more in evidence in Texas, where trial lawyers are furious at the role some Democratic state legislators played in putting Proposition 12, which capped medical malpractice damages, on the ballot last year. The measure won, 51% to 49%, and one member of the Texas Trial Lawyers Association told me his group's members planned to punish any legislator who embraced further tort reform. That effectively means Democrats, because their effort to defeat state Rep. Joe Nixon in a GOP primary failed by a 3-to-1 margin.
But liberals had more success in last week's Democratic primaries. Five Democrats who stood accused of playing footsie with Republican House Speaker Tom Craddick on various issues were either defeated or forced into runoffs. State Rep. Roberto Gutierrez was forced into a runoff for backing tort reform.
The most prominent scalp was that of state Rep. Ron Wilson of Houston, a 26-year-incumbent and chairman of the Ways and Means Committee, who lost outright. Liberals had other grievances against him stemming from his refusal to join fellow Democrats in abandoning the House floor and fleeing to Oklahoma last year in an unsuccessful attempt to block a new GOP congressional gerrymander. Rep. Glenn Lewis, a Fort Worth Democrat who also declined to go to Oklahoma, lost to Marc Veasey, a former aide to U.S. Rep. Martin Frost. Mr. Frost, in turn, is one of the Democrats most vulnerable in November owing to the GOP redistricting plan.
Some of the defeated Democrats were bitter. "I still don't think it was a good idea for Democrats who are in the minority [in the Legislature] to say we reject bipartisanship," Mr. Lewis says. "It's the only way Democrats are going to get anything."
Mr. Wilson, who is black, was even more blunt. "Because I didn't do what the white, liberal, extremist Democratic leaders wanted me to do, they're trying to punish me," he told the Houston Chronicle. "They think they ought to control the minds and hearts of every black in the Democratic Party, and if you don't do what they say, they're going to try to drag you back to the plantation like a runaway slave."
Democratic consultant Marc Campos agrees that minority legislators are held to a tougher standard of party orthodoxy than whites. He notes that former Democratic House Speaker Pete Laney backed George W. Bush for president in 2000. "Nobody punished him, nobody said anything, so it's selective and, in my opinion, it's also racist," Mr. Campos told the Houston Chronicle. "The master wants you to act a certain way, and they particularly want minorities to do it."
Republicans have their own tensions over party orthodoxy. Some moderates describe themselves as a beleaguered minority within their own party. "I don't think conservatives fully appreciate they wouldn't control the House or Senate without moderates from the Northeast," says Rep. Chris Shays of Connecticut. Conservatives say they understand electoral realities and point out that they've backed primary challengers to only two House moderates--Wayne Gilchrest of Maryland and Marge Roukema of New Jersey--both of whom held safe GOP seats. Mr. Gilchrest fended off conservative challengers by 3-to-2 margins in both 2002 and 2004. Ms. Roukema narrowly defeated conservative Scott Garrett in 1998 and 2000 and did not seek re-election in 2002.
Stephen Moore, who heads the free-market Club for Growth, says even in defeat conservative primary challenges can make a difference: "Gilchrest voted for the Bush tax cut last year knowing he'd be called to account for his stand, and Roukema gave up and retired in 2002 and was easily replaced by Scott Garrett."
Rep. Toomey's April 27 challenge to Sen. Specter, a 24-year-incumbent, is more controversial because Al Gore carried Pennsylvania in 2000. Republican backers of Mr. Specter, such as the conservative Sen. Rick Santorum, say that Mr. Toomey would find it difficult to replicate Mr. Specter's support in the vote-rich Philadelphia suburbs. Toomey backers, on the other hand, argue that the liberal voting record of Rep. Joe Hoeffel, the likely Democratic candidate, gives their man a real shot at winning in the fall. "Toomey is no more conservative than Rick Santorum, and Hoeffel is a dyed-in-the-wool liberal who just voted against a bill to protect children in the womb in murder cases like that of Laci Peterson," says one Republican state legislator.
The White House is backing Mr. Specter, following both a tradition of supporting Senate incumbents and in recognition that Mr. Specter, who is in line to chair the Judiciary Committee, has recently provided help on several of President Bush's judicial nominees. But all of that support plus a $9 million bank account hasn't allowed Mr. Specter to put the race away. Recent polls show Mr. Specter hovering at or below the critical 50% support level that denotes an endangered incumbent, and the Club for Growth has run ads highlighting how many times he has voted with John Kerry, who the Club notes was ranked last month in the National Journal's vote index as the most liberal senator.
Mr. Moore says his group seldom enters GOP primaries and then only when the incumbent violates basic Republican tenets. "Low taxes are the central linchpin of conservatism," he says. "It's possible to disagree about abortion, gay rights or the proper level of military spending, but we can't disagree about our one unifying message as conservatives."
Grover Norquist, head of Americans for Tax Reform, concurs. He notes that since President Bush's defeat in 1992, in part because he abandoned his no-new-taxes pledge, the national GOP has seen opposition to higher taxes as an easy way to brand itself with voters. Since 1990 no Republican congressman has voted to increase federal taxes.
As an incumbent, Mr. Specter remains favored to win next month, but he's clearly worried. Having taken heat for opposing President Bush's first tax cut in 2001, he switched and embraced the even more ambitious 2003 tax cut. But his record is still liberal enough to attract the ire of many conservative groups.
With Congress so evenly divided, the pressure on individual officeholders to back their party's prevailing positions on issues has become more intense. With party primaries increasingly featuring low turnout that is dominated by ideological voters--as this year's Democratic presidential contests were--you can expect more primary challenges against dissenters in the future.
The argument against such primary challenges is that moderate voters in general elections don't want candidates who deviate too much from the mainstream. But that calculation doesn't matter as much anymore, as more and more districts are gerrymandered to eliminate competitive elections. Even in competitive seats, if both parties nominate ideologues, voters who are neither conservative nor liberal may not have much choice but to go either right or left, since the middle is fast disappearing.
http://www.opinionjournal.com/diary/?id=110004821
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McCain-Feingold's Revenge
Enter the anti-Bush ads.

By Patrick Basham
Remember the old adage about not wishing too hard for something because you might get it? Today, the adage is relevant to both Republican political strategists and campaign-finance-regulation proponents. For very different reasons, both are incensed over the use of large, unregulated political donations ("soft money") from wealthy liberals to fund anti-Bush advertising and voter-registration campaigns.
Two years ago, Republicans accepted a ban on soft money as part of the most restrictive campaign-finance legislation in a generation. The soft-money spigot, turned wide open by the Clinton White House and the Democratic National Committee, once kept the Democratic party financially competitive with Republicans. Clinton strategist Dick Morris, backed by all that soft money, choreographed the political carpet-bombing, through extensive advertising, of President Clinton's Republican opponents before the 1996 election.
The Republican party, by contrast, received most of its cash from lots of small, individual donations, the only kind permitted under the new regulations. Therefore, the soft-money ban was viewed as clearly advantageous to the Republicans, especially in presidential election seasons. That made it easy for the Bush White House to abandon principle and sign the campaign-finance legislation.
In the past, campaign-finance restrictions have generated unintended and unanticipated consequences. And the latest regulatory round is no exception to this rule.
So now, Bush's enormous financial advantage over his presumed Democratic challenger, Sen. John Kerry, during the crucial pre-convention period may be eroded by the tens of millions of dollars anti-Bush groups are starting to spend on ads airing in the most politically competitive states. Hence, the Bush reelection campaign's appeal to the Federal Election Commission to rein in the president's well-funded critics.
Proponents of campaign-finance regulations, led by Sen. John McCain (R., Ariz.), had promised that we'd see less costly, less-negative campaigns better managed by the two major parties. The restrictions on free speech pushed by McCain et al were intended to reduce the power of independent political groups and special interests and return it to the candidates and their parties.
However, now that McCain-style campaign-finance regulation is a reality, the millions that may be spent on unregulated anti-Bush advertising illustrates what the campaign-finance cure-all has in fact produced. The parties and the presidential candidates have lost control of their own campaigns as a result of the soft-money ban.
Who's in the driver's seat? Special-interest groups, corporations, and labor unions who have retained previously donated soft-money funds. Prior soft-money contributions from wealthy individuals are flowing to independent campaign organizations instead of their previous destination, the national parties.
These "527 committees," named after a section of the IRS code, are exempted from the new campaign-finance regulations, most importantly the soft-money ban.
Ironically, the channeling of donations and advertising through non-party organizations will increase the number of these groups and the proliferation of non-party micro-campaigns. A large number of these campaigns will perform a series of one-off advertising attacks in specific races. These hit-and-run operations will all occur completely outside the control, but not the purview, of individual campaigns and the national parties.
The unintended and unforeseen consequences of the latest constraints on political speech serve only to further the journey of American political campaigning down a path seemingly anathema to the stated desires of the leading campaign-finance regulators. Perhaps it is time to stop looking to regulations to save our political system?
-- Patrick Basham, senior fellow in the Center for Representative Democracy at the Cato Institute, is the author of "This Is Reform? Predicting the Impact of the New Campaign Financing Regulations."

http://www.nationalreview.com/comment/basham200403150905.asp
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Balancing the Budget Within 10 Years: A Menu of Options
by Brian M. Riedl
Backgrounder #1726

February 13, 2004 | |
President George W. Bush's fiscal year (FY) 2005 budget proposes cutting the budget deficit in half over five years. Yet lawmakers are under intense pressure to enact a budget resolution that balances the budget within the 2005-2014 period. This paper provides a menu of spending targets to accomplish that objective.
The Model
Before assessing the spending requirements of a balanced budget, it is necessary to calculate a revenue projection. Revenues are projected by beginning with the January 2004 Congressional Budget Office (CBO) baseline and then incorporating President Bush's FY 2005-2014 tax proposals, such as making the 2001 and 2003 tax cuts permanent, reforming the alternative minimum tax, and creating tax-free savings accounts.1
Two different revenue projections emerge:
The first is based on revenues using a dynamic score of the President's tax cuts. Dynamic scoring acknowledges that tax relief strengthens incentives to work, save, and invest, and that the resulting economic growth and tax revenues offset a portion of the original revenue loss.
The second is based on revenues using a static score of the President's tax cuts. Static scoring assumes that tax policy does not affect economic behavior or growth. While very few economists would agree with static assumptions, lawmakers require the CBO to use them when projecting future tax revenues. (See the Appendix for spending and tax calculations.)
Using the CBO 2004 baseline estimate of $896 billion in discretionary outlays and $1,242 billion in mandatory outlays, it is possible to calculate the effects of various annual spending growth rates--both discretionary and mandatory.2 Table 1 shows which rates of discretionary spending and mandatory spending would combine to balance the budget under dynamic scoring. Table 2 shows the results for balancing the budget under static scoring.
Results
Table 1 details the spending patterns that can balance the budget by 2014, assuming that tax revenues are scored dynamically. For example, a budget that expands discretionary spending by 3 percent annually and mandatory spending by 4 percent annually would achieve balance by 2014. Two observations are immediately evident:
Most scenarios to balance the budget by 2014 require annual spending growth of approximately 4 percent or less.
The CBO baseline shows mandatory spending growing by 6 percent annually over the next decade. Yet Table 1 shows no scenario to balance the budget by 2014 with 6 percent annual mandatory spending growth. This confirms that any plan to balance the budget must reform runaway entitlements, such as the 2003 Medicare drug bill and the 2002 farm bill. Furthermore, without reform, the growth rate of mandatory spending will accelerate in coming decades.
Lawmakers will likely seek a budget resolution that balances the budget by 2014 even when revenues are scored statically. Table 2 shows the spending options to achieve the objective. Most combinations require mandatory and discretionary spending to grow by 3 percent or less per year.
Difficult Decisions Required
By comparison, discretionary spending has averaged 10 percent annual growth and mandatory spending has averaged 7 percent annual growth over the past five years. (See Charts 1 and 2.)
Bringing spending growth all the way down from these high levels will require difficult decisions. However, recent spending hikes actually translate into more opportunities for savings. The 39 percent increase in discretionary spending since 2001 has left many agencies awash in cash, and they can afford to go for a few years without another major spending increase.
Mandatory spending is now at 11 percent of the gross domestic product ($11,144 per household) for the first time in American history.3 Many of these bloated programs can afford much-needed reforms. Lawmakers can begin to move toward a balanced budget by settling on a lean spending course and then reforming the budget process to lock in those spending ceilings.
--Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
1. Reform of the alternative minimum tax is projected through 2014, even though the President's budget proposal includes an estimate of revenue only through 2006.
2. Net interest costs are also incorporated into the model. Rather than consciously selected by lawmakers, these spending levels are a residual based on the effects of each policy. See Appendix for net interest cost estimates.
3. See Brian M. Riedl, "$20,000 per Household: The Highest Level of Federal Spending Since World War II," Heritage Foundation Backgrounder No. 1710, December 3, 2003, at www.heritage.org/Research/Budget/BG1710.cfm.
? 1995 - 2004 The Heritage Foundation
All Rights Reserved.
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IRS Error Rate Still High


Written By: Daniel J. Pilla
Published In: Budget & Tax News
Publication Date: March 1, 2004
Publisher: The Heartland Institute
The January 2004 report of the Treasury Inspector General for Tax Administration [TIGTA] confirms the IRS's error rate for advice it gives at its hundreds of walk-in Taxpayer Assistance Centers (TACs) remains unacceptably high.
The report reveals the IRS provided "flatly incorrect answers 20 percent of the time." In another 15 percent of the cases, the IRS provided a "correct" answer without first obtaining the background information necessary to provide a correct answer--a serious oversight when providing tax advice.
Know Your Facts and Rules?
A father might ask, for example, whether it's legal to claim his child as a dependent on his tax return. One might simply answer yes and be correct, but only in a very broad sense. Without knowing all the facts about that child, it is very possible the correct answer for that particular father is no. For example, in a situation where the parents are divorced and legal custody of the child rests with the mother, it is not allowable for the father to claim the child as a dependent unless the mother signs a written waiver granting the exemption to the father.
The problem here is that most citizens just don't know all the rules. Consequently, citizens don't know what information to provide to the IRS as background for their question, and they have no way to ascertain whether the IRS asked sufficient questions to obtain the necessary facts.
When this kind of incomplete advice is factored in, the total inaccuracy rate rises to a troubling 35 percent.
Do Your Own Research?
One equally troubling aspect of the report indicates that in about 3 percent of the cases, IRS employees essentially told Treasury investigators to "do their own research." Rather than helping to find the correct answer to the question, the IRS simply referred investigators to publications to find the answers for themselves. Considering the often convoluted and technical nature of IRS publications, this is not only unreasonable ... it's a violation of the directives under which TAC employees are supposed to operate. Their job, after all, is to answer the questions posed by confused taxpayers, not send them off on a quest for answers potentially buried in thousands of pages of publications.
It is important to note the questions asked by Treasury investigators were not esoteric tax law inquiries. All the questions pointed at narrow, relatively simple areas of law that TAC employees are trained in and expected to know. Given this, it is reasonable to expect and demand that TAC employees get it right--period. TAC employees are not being trained adequately.
This brings up another disturbing aspect of the investigation. When TAC employees are asked a question that is outside the scope of their training, they are required by operating guidelines to refer the questions to other, more qualified, IRS personnel. However, in 31 percent of the cases, TAC employees answered questions outside the scope of their training, in violation of the regulations. So at a time when TAC employees cannot provide error-free answers to questions in areas they are trained in, they are taking stabs at answering questions in areas they are not trained in. We can only guess what the error rate is for those answers.
Will the Problem Get Worse?
The National Taxpayer Advocate's (NTA) 2003 Annual Report to Congress, released in January 2004, suggests we can expect this problem to get worse. The Taxpayer Advocate reports the IRS is "reducing the resources dedicated to providing taxpayer assistance, while at the same time, beefing up its enforcement arsenal." The result, according to the NTA, is "a declining trend in providing services" to those in need and an "increase in taxpayer burden."
Why can't the IRS get it right, even in relatively simple areas of the law? The answer is provided by former Commissioner Charles O. Rossotti, in a statement addressing the reason for the error rate in the IRS's telephone assistance function.
Said Rossotti, "Fundamentally, we are attempting the impossible. We are expecting employees and our managers to be trained in areas that are far too broad to ever succeed, and our manuals and training courses are, therefore, unmanageable in scope and complexity."
Daniel J. Pilla is a nationally known tax litigation specialist and executive director of the Tax Freedom Institute. He has written eleven books on taxpayers' rights issues and IRS defense strategies.



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Visit Dan Pilla's Web site at http://www.taxhelponline.com.