>The State of Nevada sent its two allotted Senators to the congressional upper chamber, and their voting records during the 111th Congress show much about their orientations and values. The initial and sharpest contrast lies in the fact that one, Senate Majority Leader Harry Reid was in charge of legislating and advancing bills through the Senate, while the other, Senator Ensign was a willing hand in a record number of filibusters. In the last two years the majority had to break an all time record of filibusters. [TPM] Senator Ensign was among the top eight Republicans who could be counted on to sustain filibusters — on just about everything — voting to sustain filibusters on approximately 84% of the legislation brought to the Senate floor. [Filib]
There is one thing a filibuster tells us: Those who filibuster a bill or a nomination know they don’t have a majority of votes on their side, and he or she who votes to sustain a filibuster doesn’t believe the nomination or bill should get an “up or down vote.” This is a legislative tool which ought to be handled with some caution. Use it as a cudgel, as the Republican leadership did in the 111th Congress, and the party wielding it has less credibility when it charges that the opposition won’t allow an “up or down” vote on legislation or confirmations it wants in the future. Evidently, Senate Minority Leader McConnell was completely willing to play the Obstructionist Card early and often in the 111th, and Senator Ensign was pleased to help continue the game. In the 110th and 111th sessions of Congress Republicans filibustered a record 275 bills and nominations. [Sen] This led to 203 cloture votes, and cloture was invoked (the filibuster was broken) 124 times. [Sen]
H.R. 2847: Sets The Table
On February 2, 2010 among the initial votes in the U.S. Senate’s 111th session, H.R. 2847; Hiring Incentives to Restore Employment Act was filibustered. The filibuster was broken on a 62-30 vote, with Senator John Ensign voting to sustain the filibuster. [rc 23] H.R. 2847 also illustrates the priorities demonstrated by Senators Reid and Ensign. While Reid voted to end the filibuster and bring the bill to a vote, Senate Minority Leader McConnell and a willing Senator Ensign wanted to kill it. Why?
H.R. 2847 provided for tax exemptions, specifically “1) exempt for-profit and nonprofit employers, including public institutions of higher education, from social security and railroad retirement taxes in 2010 (except for the first calendar quarter of such year) for new employees who are hired after February 3, 2010, and before January 1, 2011, and who certify that they have not worked more than 40 hours during the last 60 days; and (2) allow an increase in the general business tax credit for the retention of such employees for at least one year at specified wage levels.” In other words, there were tax exemption for those businesses which agreed to hire those who were among the long term unemployed. Republican rhetoric would have us believe that their party supports the notion that small businesses should be given tax incentives to create employment — yet here we have Republicans opposing a vote on a provision of a bill to do precisely that.
H.R. 2847 also incorporated infrastructure projects, in Subtitle C, infrastructure spending does two economically helpful things: It puts money into the accounts of local contractors who hire labor to complete the projects; and, it provides the skeletal elements necessary to encourage commerce and industry. Yet, the GOP, with Senator Ensign’s assistance, wanted no “up or down” vote on this element. Again, why?
The answer came in Title V of the bill. “Title V: Offset Provisions – Subtitle A: Foreign Account Tax Compliance – Part I: Increased Disclosure of Beneficial Owners – (Sec. 501) Amends the Internal Revenue Code to revise and add reporting and other requirements relating to income from assets held abroad, including by: (1) requiring foreign financial and nonfinancial institutions to withhold 30% of payments made to such institutions by U.S. individuals unless such institutions agree to disclose the identity of such individuals and report on their bank transactions; and (2) denying a tax deduction for interest on non-registered bonds issued outside the United States. The bill required closing tax loopholes for multi-national firms and interests.
Part II: Under Reporting With Respect to Foreign Assets – (Sec. 511) Requires any individual who holds more than $50,000 in a depository or custodial account maintained by a foreign financial institution to report on any such account. (Sec. 512) Imposes an enhanced tax penalty for underpayments attributable to undisclosed foreign financial assets. (Sec. 513) Extends the limitation period for assessment of underpayments with respect to assets held outside the United States.Part III: Other Disclosure Provisions – (Sec. 521) Requires U.S. shareholders of a passive foreign investment company to file annual informational returns. Part V: Substitute Dividends and Dividend Equivalent Payments Received by Foreign Persons Treated as Dividends – (Sec. 541) Treats a dividend equivalent payment as a dividend from a source within the United States for purposes of taxation of income from foreign sources and tax withholding rules applicable to foreign persons.” The bill required the reporting of income held in foreign bank accounts.
The bottom line was clear, and still is, that the Republican obstruction of the bill required believing that it was more important to protect the interests of the investor class, the economic elites, than it was to promote employment, give small businesses tax credits and other incentives for hiring, and to promote infrastructure development and maintenance upon which domestic commerce depends. This was a pattern to be repeated in future legislative battles in the U.S. Senate.
When H.R. 2847 came up for a final vote on February 24, 2010, Senator Ensign was among only 28 members of the U.S. Senate to vote against it. [rc 25] Senator Reid voted in favor of the bill.
Who Gets The Money
Another early demonstration of whose economic interests were to be protected came during attempts at extending unemployment benefit insurance. H.R. 4213 came to a vote on the Senate floor on March 10, 2010. [rc 48] We know that for every dollar expended in unemployment insurance benefits $1.61 is returned into the U.S. economy. [Zandi/CBPP] We know we have an economy 2/3rds of which depends on consumer spending. Therefore, it is abundantly rational to conclude that the extension of unemployment benefits will contribute to consumer spending. Contributions to consumer spending increase demand. Further, if we are concerned with the health of small businesses, then the extension of unemployment benefits will allow unemployed consumers to shop at their local establishments. However, these economic elements have to surpass the Mythology of Unemployment so long embraced by the Republican Party.
The first myth is that the unemployed are lazy individuals who would rather collect benefits than work. This requires the true believer to ignore the fact that there are between 4.5 and 4.8 workers for every available job in this country. [EPI] One might be as industrious as the proverbial bee, but so are about 4 other people, so approximately 3 people will remain unemployed because there is simply no job available for them.
The second myth requires believing that unemployment benefits somehow pay more than a person could earn in a lower paying job, and that an unemployed individual can earn more by staying home than by accepting any employment available. Those to adopt this myth have to ignore the provisions established for eligibility for unemployment benefits in Nevada, and elsewhere, wherein a person must accept any employment or lose eligibility. [DETR pdf] There is an unfortunate confusion in some Republican minds that unemployment benefits are a form of welfare payment. The two are not synonymous, not by a long shot.
However, there was another fly in the ointment for Republicans, “Some Members may be concerned that H.R. 4213 would include a $24.6 billion tax hike on investment partnerships at a time when unemployment stands at 10 percent. Tax increases on investment could discourage the entrepreneurial risk-taking that is crucial to economic growth and job creation. Some Members may also believe that a permanent tax increase should not be used to offset temporary tax relief.” [GOP] (emphasis added) How one might connect a possible tax increase on “investment partnerships” and unemployment in the construction and manufacturing sectors requires a leap in the logic. One would have to believe that fund managers and other investment institutions were going to be generating jobs by investing in sectors with high unemployment. This is a leap of faith as opposed to a leap of logic, because we know from their own reporting that “investment” in capital for manufacturing etc. did not increase during periods of low taxation. [TGM]
Once again, it was more important for the Republicans to protect the interests of “investment partnerships” than to extend unemployment insurance benefits which would produce $1.61 for every dollar expended in economic stimulation. When the final vote was taken on H.R. 4213 Senator Ensign voted against it, Senator Reid in favor. [rc 215] By the lights of Senator Ensign, it was evidently more important to protect those “investment partnerships” — even if they were not investing capital in construction or manufacturing firms — than to encourage spending by recipients of unemployment benefit insurance in their local grocery and clothing stores. There were more contrasts to come.
Health For The Insurance Companies Or The Public?
The conflict between the interests of average Americans and the interests of corporations was nowhere more obvious than during the debate over H.R. 4872, the Health Care reform bill. The corporate lobby was considerable: “A Center for Public Integrity analysis of Senate lobbying disclosure forms shows that more than 1,750 companies and organizations hired about 4,525 lobbyists — eight for each member of Congress — to influence health reform bills in 2009.” And, “Among industries, 207 hospitals lined up to lobby, followed by 105 insurance companies and 85 manufacturing companies.” [CPI] The self styled “Coalition to Protect Patient’s Rights” was found to be a “grassroots” front group for the DCI lobbying firm in Washington, D.C. [TP] Corporate funded groups like Freedom Works, and Americans For Prosperity (Koch Brothers) joined the fray in opposition to health care reform. [AlNet]
At its core, the debate was about whether or not insurance corporations could continue to (1) abuse rescission clauses to deny claims made by policyholders after they were ill or injured; (2) monopolize insurance markets in various regions of the country; (3) deny coverage based on “pre-existing” conditions even if the condition was an infant’s congenital defect; and (4) take more than 15% of premium revenues in overhead costs. The last item, which was one of the least publicized was one of the most contentious.
The bill passed in the U.S. Senate on a 56-43 vote on March 25, 2010. Senator John Ensign sided with the insurance corporations, and their desire to take more than 15% of all premium revenues for overhead (advertising and administrative) expenses. He voted against the bill. Senator Reid voted in favor of the bill. [rc 105]
Quis custodiet ipsos custodes?
Who, indeed, were going to watch for indiscretions, incompetence, and ineptitude in the financial sector? The credit crisis of 2008 did not spring full blown from anyone’s imagination, it was the product of “excessive exuberance,” a failure to address realities in the market, black swans included. By the end of the meltdown there was not a single major investment bank left standing on Wall Street. S. 3217 addressed these issues. Yet, the fund managers, investment branches of bank holding companies, and hedge funds fought any and all attempts to restrain their activities and monitor the value of their “creative” derivatives. S. 3217 provided for a process by which major financial institutions could dissolve without creating major chaos in the financial markets (no more “too big to fail”), required the collection of “systemic risk” data from banking institutions, and established a Consumer Financial Protection bureau within the Federal Reserve system. It also provided a mechanism by which derivate trading might be better regulated. The Republicans filibustered the bill.
Senate Majority Leader Reid filed a cloture motion to bring this bill to a vote on the Senate floor on April 26, 2010. The Republicans succeeded in sustaining their filibuster on a 57-41 vote. [rc 124] Senator John Ensign voted to sustain the GOP filibuster of the bill; Senator Reid voted to bring the bill to a vote. The next day Senator Reid tried again to bring the bill up for a vote, and again the Republicans sought to sustain their filibuster. The cloture motion failed on April 27, 2010 on the same vote count — 57 to 41, with Senator Ensign still voting to sustain the filibuster. [rc 126] There was a third try to bring the bill to a vote on April 28, 2010 — and again the Republicans filibustered on behalf of corporate interests who had little sympathy for any regulatory reform of their industry. Cloture failed 56-41, with Senator Ensign again voting to sustain the GOP filibuster. [rc 127]
By May 20, 2010 the cloture motions were moot in the U.S. Senate, and the bill was folded into H.R. 4173 (the Dodd-Frank Wall Street Reform and Consumer Protection Act) The Senate commenced on the bill “to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices,..” on that date, by a 59-39 vote, once again with Senator Ensign opposing the bill. [rc 162]
Final passage was secured on July 15, 2010 when the Senate voted 60-38 in favor of the bill, once again Senator Ensign voted against the creation of a Consumer Protection agency, against the regulation of the derivative markets, against the provisions to collect data on the viability of banking operations, and against the provisions to wind down banks (formerly too big to fail) in the bankruptcy process. [rc 206] Nothing could have been more apparent than the attempts by the Senate Republicans to allow the financial sector to continue to indulge in those practices that had gotten them into trouble in the first place. Under the GOP plan, the industry was supposed to voluntarily regulate itself. Under the Democratic proposal the government was to “trust but verify” that financial institutions weren’t up to the same unproductive, but highly profitable, practices that caused the credit crisis in the first instance.
Small Business Big Business?
Few pieces of legislation more clearly illustrate the differentiation between those supporting large corporations from those supporting small business than H.R. 5297, the Small Business Lending Fund Act. The bill was relatively simple, as federal legislation is written. There would be established a fund under the direction of the U.S. Treasury to be used to support smaller banks and lending institutions which would, in turn, loan money to small businesses. Republicans in the House of Representatives promptly labeled the bill “TARP III,” [GOP] although the bill did not call for the purchase of any “troubled assets,” it merely made funds available to small banks and lending institutions on the promise that the funding would be channeled to small businesses seeking loans. Republicans said, “While Republicans share the goal of helping small businesses prosper and generate the kinds of job opportunities that are sorely lacking in this economy, Republicans do not believe that the solution to the economic distress on Main Street is to establish new bail-out authorities funded by taxpayers.” [RepClk] There was no bail-out in the bill, for anyone — except perhaps small businesses seeking to get loans for their operations, or for possible expansion. There were also some $12 billion in tax breaks for small businesses. [FRW]
With funding available for small businesses (for which Republicans delight in expounding their support), and with $12 billion in tax cuts for truly small businesses, what’s not to love about H.R 5297? Why couldn’t the bill break a GOP filibuster in late July? Why the red herring argument about “TARP” when the bill contained absolutely no provisions for acquiring troubled assets from major banks?
The White House couldn’t explain the opposition: “The jobs bill that is stalled in Congress would completely eliminate taxes on key investments in small businesses. It would allow small business owners to write off more expenses. And it would make it easier for community banks to do more lending to small businesses, while allowing small firms to take out larger SBA loans with fewer fees, which countless entrepreneurs have told me would make a big difference in their companies. I’d also like to point out this legislation is fully paid for and will not add one single dime to our deficit.” So, what was the problem?
Investment fund CEO’s and managers inveighed against the bill in generalities. “Bailouts don’t work.” Or, the bill was a “redistribution of wealth,” or what the economy needs are fewer taxes and even less regulation,” [BizCap] but no-one addressed how small businesses were supposed to secure lines of credit while major banks figured out how to value the toxic mess in their books. Perhaps we can take a hint from the American Bankers Association publication.
“GOOD NEWS (said the ABA)…Senator Mark Udall’s (D-CO) amendment to expand credit union business lending will not be taken up when the Senate considers the small business lending bill (H.R. 5297). Great work bankers! Your opposition has made it clear that there would be a fight over the amendment that could jeopardize the passage of the bill.” What the bankers were afraid of was the provision to exclude the major banks from participating (very profitably) from the programs, and they were (and are) afraid of competition from credit unions and other smaller financial institutions. They said as much,
“The credit unions have not given up on trying to expand their member business lending authority and will be pushing legislation next year. Make sure that your Members of Congress in the House and Senate know that the opposition to this bad public policy has not gone away.” Evidently, it’s bad public policy to support community banks and credit unions.
The bill to “create the Small Business Lending Fund Program to direct the Secretary of the Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses, to amend the Internal Revenue Code of 1986 to provide tax incentives for small business job creation, and for other purposes” came to the Senate floor on June 29, 2010, and was passed on a 66-33 vote. Senator Harry Reid voted in favor of it; Senator Ensign voted “No.” [rc 202]
In short, a vote in favor of H.R. 5297 was one in favor of smaller banks, and in favor of increasing lending to smaller businesses. It supported community banks and local businesses. A vote against H.R. 5297 was purely ideological, without much substance to the rhetoric beyond the same cliches popular among the radical right wing of the Republican Party; and, in essence a sop to the major lending institutions who don’t care for any public policy encouraging community banks and credit unions.
The Sum of the Sums
The two Nevada Senators in the 111th session of the Congress of the United States had the same opportunities to demonstrate their support for legislation which would advance the interests of average Americans (in and out of the work force), to enact bills with the greatest impact to insure economic stimulation, to support legislation aimed at the protection of consumers, and to support small businesses. One, Senator Reid, did — the other, Senator Ensign, did not.