Tag Archives: partisanship

Scandal at the IRS

I’ve been reading a variety of reports about the allegations that the IRS singled out Tea Party tax exemption applications for extra scrutiny. So here are a few random observations, culled from those reports and accusations:

1) It’s worth noting that condemnation has been utterly bipartisan. Liberal blogs and Democratic commentators have been highly critical of politicization of the IRS. (Why do I think that, if this had happened during a Republican administration, the reaction at Fox “News” would have been considerably more defensive?) And let me be clear: if the IRS singled out any organizations for differential treatment based upon their politics, that was wrong. 

2) That said, what we are seeing is in significant measure yet another unanticipated result of the wrongheaded Citizen’s United decision. Citizens United allowed any organization of any kind to spend money out of its general treasury to run political ads. As Chris Hayes has noted, that decision brought about a pivotal moment for politics and taxes and campaign spending in this country and we’re still dealing with the fallout. Republican Karl Rove and Democrat Bill Burton used the Citizens United ruling in the run-up to the 2012 elections. Both of them used social welfare nonprofits to run overtly political ads; that allowed them to intervene in political campaigns without disclosing their donors. Others soon followed.

“Suddenly, the IRS starts getting a flood of new applications from other political groups and strategists saying, ‘Oh, oh, it turns out I too want to set up a social welfare organization that just so happens to be focused on taking the country back from Barack Hussein Obama. Now, here is the thing the IRS appears to have done unequivocally wrong, that we all agree was absolutely inexcusable. They reacted to all this by targeting one part of the ideological spectrum in looking at whether this flood of new applicants passed the smell test. Being skeptical about a new wave of wolves in sheep’s clothing invading the nonprofit game was entirely appropriate.”

3) As Hayes points out, Congress requires the IRS to review every application for tax-exempt status to weed out organizations that are partisan, political, or that generate private gain. Congress has imposed this requirement on the IRS, and its predecessor agencies, since 1913.  When it comes to 501(c)(4) organizations, the IRS is supposed to draw a distinction between groups that are “primarily engaged” in politics and groups that really are primarily engaged in “social welfare”—somehow “promoting the common good and social welfare of the community.”

4) The social welfare tax exemption is being used by existing 501(c)(4) organizations, including some very large ones, to promote partisan political interests—the very activity Congress has explicitly prohibited for a century. The New York Times ran a useful explanation  about this last Tuesday.

5) It is not an excuse, but it does bear noting that none of the organizations that the IRS subjected to improper levels of scrutiny was denied tax exempt status.

6)  Congress is demanding that the agency do more and more with less and less. As David Levinthal reported at the Center for Public Integrity, the IRS’ Exempt Organization Division–the division charged with the violations–processed significantly more applications in 2012 than it ever had. At the same time, the entire IRS was operating on a much-reduced budget, as a result of several rounds of Congressional cost-cutting.

“Over the last two years, government watchdog groups filed more than a dozen complaints with the Internal Revenue Service seeking inquiries into whether large nonprofit organizations like those founded by the Republican political operative Karl Rove and former Obama administration aides had violated their tax-exempt status by spending tens of millions of dollars on political advertising. The I.R.S. never responded… Because they purport to be engaged primarily in issue advocacy, not election advocacy, tax-exempt groups are not closely regulated by the Federal Election Commission. That task falls, instead, to the I.R.S., which can take years to investigate problems and is required to do so in strict secrecy… The tax code states that 501(c)(4)’s must operate “exclusively” to promote social welfare, a category that excludes political spending. “

The fact that the agency is understaffed does not excuse lawbreaking; what this revelation does, however, is point to systemic fiscal and managerial issues within the IRS that need to be addressed. Unfortunately, given the blood-lust of those in Congress who are intent upon using the IRS misbehavior for entirely partisan purposes, a carefully calibrated and deliberate review of agency operations is unlikely.

What the IRS should be doing is looking closely at every application. The politics of the applicant is irrelevant–but compliance with the rules governing tax-exempt status is anything but. Granted, those rules have been considerably complicated and confused thanks to Citizens United, but that makes competent, even-handed oversight more important than ever.

If Congress wasn’t so broken, this episode might lead to meaningful reform. I’m not holding my breath.

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Quote of the Day

From Dick Lugar’s first address after leaving elective office, an observation worth pondering:

Perhaps the most potent force driving partisanship is the rise of a massive industry that makes money off political discord. This industry encompasses cable news networks, talk radio shows, partisan think tanks, direct mail fundraisers, innumerable websites and blogs, social media and gadfly candidates and commentators. Many of these entities have a deep economic stake in perpetuating political conflict. They are successully marketing and monetizing partisan outrage.

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It’s Us

The fault, dear Brutus, is not in our stars,
But in ourselves…

Shakespeare penned those words; Nate Silver demonstrates their accuracy.

The increasing partisanship and polarization in Washington is making it more and more difficult to get anything meaningful done. The paralysis of government is real, and it is making all of us vulnerable–to economic recession, to climate change, to gun violence and all of the myriad challenges of contemporary social systems. Those in what Molly Ivins called the  “chattering classes,” the punditocracy, bewail this state of affairs, and insist that the American public not only deserves better but deeply disapproves of this ideological rigidity.

Nate Silver begs to differ.

in a recent post for the New York Times, Silver demonstrates that the gridlock in Washington mirrors our own polarization. As recently as 1992, there were 103 swing Congressional districts; this year, there were 35. At the same time, the number of “landslide” districts doubled, from 123 to 242. As a result, most members of Congress now come from “hyperpartisan” districts where they face no general election threat. Any re-election challenge will come in a primary; in other words, Democrats must protect their left flanks, Republicans their right. As Silver notes, House members have little incentive to move toward the middle. Compromise with the other party simply makes them vulnerable to a primary challenge.

I have written about the pernicious effect of “safe” districts before, but I have generally assumed them to be the product of redistricting–gerrymandering. But Silver says the effect persists even if we ignore redistricting. He underscores what Bill Bishop reported in The Big Sort: people are voting with their feet, moving to areas they find congenial. The result is that Democrats are crammed into urban areas, and Republicans populate more rural districts. The result of that is the dilution of Democratic votes: in this year’s election, Democrats won the national popular vote by one point–an 8 point shift in their favor from 2010. But they gained only 8 House seats out of 435.

The results of these population patterns disadvantages Democrats by making continued control of the House by Republicans likely (absent a “wave” election), but it holds an even more serious threat to Republicans. As Silver points out, although individual Republican House members have little incentive to compromise, there are risks to the party if they fail to do so. Individual House members come from districts that reward them for being intractable, but that intransigence and hyper-partisanship make it increasingly difficult for the GOP to win either the Senate or the White House.

It seems appropriate, given how dysfunctional our government has become, to devolve from Shakespeare to Laurel and Hardy:  this is certainly a fine kettle of fish we’ve gotten ourselves into!

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Mirror Images

There must be a special blind spot that allows people to engage in precisely the same behavior that they (correctly) criticize in others.

 In one particularly distasteful example, the Anti-Defamation League, an organization founded to counter religious prejudice, recently opposed locating a mosque a few blocks from Ground Zero. Evidently, the ADL’s commitment to civil rights doesn’t extend to Muslims.

Closer to home, a number of local Democrats have savagely attacked three Democratic City-County Counselors for voting to sell the water company to Citizens Gas. They have been especially harsh in their criticisms of Jackie Nytes, one of the most thoughtful, productive and hardworking members of the Council.

These are members of the same party that has complained—justifiably—about the Party of No in Washington. Democrats criticize the GOP for its sustained and uniform opposition to anything the Obama Administration proposes; in just the past few weeks, Republicans have blocked votes on the DISCLOSE Act (increasing disclosure and reporting requirements in the wake of the Supreme Court decision allowing corporations to make direct campaign contributions), a bill to provide medical aid and compensation for 9-11 first responders, and a bill to expand credit to small businesses.   The Party of No has also blocked votes on at least twenty judicial nominees who received bipartisan support in committee.

What is appalling about this behavior is its transparent motivation to deny the Administration any credit for getting anything done, even when the measures being proposed have previously been supported by Republicans.

Local Democrats have been among those who have strongly criticized this conduct, and it is ironic—to put it mildly—that they are now engaging in it by suggesting that a vote for a plan put forward by a Republican mayor is an act of disloyalty.

If I were on the Council, I don’t know how I would vote on the water company sale. I think the transfer itself makes sense; what I don’t like is that we are getting money to fix our decaying infrastructure by shifting the tax burden to ratepayers. We are pandering to the purveyors of the fiction that we can run a city on the cheap, and our cowardice will inevitably come back to bite us in the future. That said, the infrastructure needs are critical, and a direct tax increase is politically untenable.

Councilor Nytes has a well-deserved reputation for integrity and responsiveness to her constituents, and the accusations of betrayal by more partisan members of her party do not reflect poorly on her—such accusations diminish her critics, and reduce the effectiveness of their justifiable criticisms of the Party of No. 

We elect people to the Council to make decisions on our behalf in the exercise of their best judgment, not to play politics. It is one thing to disagree with a colleague’s vote on the merits—that’s fair enough. It is another thing altogether to insist on lockstep partisan voting.

It’s wrong to be the Party of No in Washington—or in Indianapolis.