Part-Time Pundit

Democrats will have Buyers’ Remorse over Specter

This morning the political world was abuzz with news that Senator Arlen Specter left the Republicans to become a Democrat. Effectively, once Al Franken is likely crowned the junior Senator from Minnesota, the Democrats will have a de jure filibuster proof majority.

Republicans, for their part, were celebratory more than anything else. Speaking with Scott Wheeler of National Republican Trust this afternoon he said, “It’s a great day for Republicans and a great day for conservatives. The integrity of the Republican Party just went up.”

For his part, Wheeler takes credit for pushing Specter out of the party. After issuing a challenge that any Republican who supported the unpopular stimulus package would have a primary opponent, Specter took him up on the dare. Unfortunately for Specter, once he saw that he would be trounced in the Republican Party by challenger Pat Toomey, he picked politics over principle and sold himself to the Democrats.

Sold is the right word and in the coming days we will likely see what concessions he extracted. For starters, President Obama has promised to campaign for him next year which is no small token of support. However, in so doing, he has lost a powerful political role he (rightly or wrongly) held.

So-called moderates in the Senate are a powerful bunch. For instance, the “Gang of 14” wrote the policy on judicial appointments once the filibuster threats came out. Because of the hyper-partisanship (that still persists in the Obama post-partisanship era), moderates often are the key votes and can extract huge concessions for their votes. Those days are over for Specter because Republicans simply will not work with him again.

Democrats believe they now have a filibuster-proof majority, but likely what they gained on paper will not be that much in reality. If Specter wanted to side with the Democrats (as he is often prone to do), his party affiliation has never stopped him before. He’d cross party lines to break a filibuster. Now that he’s a Democrat, it certainly won’t give the Democrats any more filibuster-breaking votes.

Specter is also against “card check”, the unions’ top legislative priority, a stance that will hurt him in the primary if the party establishment can’t muscle whatever challenger may appear. He’s for judicial restraint and likely his positions on judges won’t change much. In short, the Democrats got a mere symbolic victory and inherited a vulnerable Senator up for re-election next year.

Whatever support Specter may have had in the Republican Party among voters is likely to vanish. Voters simply do not respond well to party switching. He will also likely face a Democratic primary challenge because the left wing of the Democrats will not embrace him either (remember how they treated Joe Lieberman?).

More importantly, while Obama is moderately popular, his policies are not. Come mid-term elections, his unpopular policies will be a weight around the Congressional Democrats shoulders. While many areas of the country do not necessarily have strong Republican farm teams, Pat Toomey is no amateur. Combine that with a candidate who obviously lacks principles and Specter faces real trouble come November of 2010.

Or as Wheeler put it, Specter showed he will “hold on to political power above considering principles, party and even the people.” In 2006 and 2008, voters threw out Republicans across the country for appearing slimy and unprincipled. Specter just put himself in that category for 2010.

So can conservatives win in Pennsylvania and elsewhere? Much depends on how Obama’s Administration goes (and it is not going well so far). However, the voters are fed up with the financial shenanigans of Congress and of the States, a symptom of that frustration being the popular Tea Parties. If Republicans can convince voters they’ve learned their lesson on fiscal conservatism (and Pat Toomey is the exemplar of that idea), the voters may well welcome them back to power; certainly after the radical expansion of deficits proposed by Obama.

May 2nd, 2009 Posted by John Bambenek | Columns, Congress, Elections, Politics | no comments

Seller’s Remorse: Banks Regretting Acquiescing to “Good Enough Nationalization”

We’ve all seen the story of banks lining up to get “free” money from the federal government in an attempt to pump up the economy. The reality is, the money hasn’t pumped up much of anything except the national debt. One trend, however, is that banks are regretting taking the money in the first place and some are even trying to give it back.

Take, for instance, Bill Cooper who is the CEO of TCF Bank. His bank took the bailout money even though they didn’t really need it. Cooper reports that regulators actually tried to pressure them to take the funds. On top of that, when the federal government came in with their money, many traditional lenders to banks suddenly walked away from the business that dried up the conventional source of capital for banks.

The reason for the drying up of conventional capital is that the federal government has imposed a “shareholders get nothing” approach to bailouts. If you, in good faith, invested in banks, your equity gets wiped out first. This has led to many institutional players simply not wanting to take the risk. While there is merit in protecting consumer accounts from a run on the bank, targeting shareholders has led to almost all traditional flows of capital to banks disappearing overnight.

As a result, some banks were pressured to take federal money they did not need and others had to take federal money when traditional capital would have been available in any other circumstance. The take away from this is that the law of unintended consequences strikes again. By propping up bad banks, the federal government has created a cycle of drying liquidity that forces other banks onto the federal dole.

The mode of federal spending always tends to be to hook a target into relying on federal money, turning them into a captive recipient and then imposing rules after-the-fact, when the entities have no choice but to capitulate. It was the same way with New Deal highway funds. The federal government pays to build and maintain the interstates and now that states are hooked on that money, they can impose almost any terms they want on receiving that money.

Even a better example is federal title 1 money for schools. The money was created to “level the playing field” between rich states and poor states, and rich districts and poor districts. Of course, every state got some money also. Now that the schools are hooked because of the constant upward pressure of education spending (rightly or wrongly), the districts and states can no longer say no to title 1 funds. In comes No Child Left Behind.

It’s hard to argue that No Child Left Behind (and by extension, the federal government) is the primary driver of educational policy, not parents or local school boards. Accountability is all well and good but the question is, accountability to whom?

The same is now true of bailout money. After banks have accepted the cash and have no choice but to hold it, the federal government is imposing terms after-the-fact to control the banks. This is, in effect, “good enough nationalization” (where the government controls the aspects of a business it cares about and leaves the mundane details it doesn’t care about to the business). Bill Cooper, for instance, wants to give the money back.

Rep. Barney Frank wants all recipients of federal money to be subject to end-to-end wage controls on all employees. That’s the most flagrant example of overreach to date. Of course, banks got desperate and held out their hands. Now the federal government is calling the tune.

The result is that an ever-widening portion of a major industry will fall under federal control (in part because no one wants to invest in financials anymore). As with most things, it will be the consumers and citizens who have to pay the ultimate tab but never seem to reap any of the benefits. Hopefully the banks can give back the money before it is too late.

April 2nd, 2009 Posted by John Bambenek | Columns, Congress, Economics, National, Politics | no comments

Trusting Faceless Republican Insiders Will Ensure Defeat in 2010

As the saga of Governor Rod Blagojevich seems to be behind us with his removal from office, it seems Republicans are salivating at the prospects of a sure win of the Governor’s mansion in 2010. However, the path to victory is not nearly as certain as many believe it to be and certainly not on the present path the Illinois Republican Party is taking. The path they are trying to take will guarantee yet another cycle of brutal election losses.

As usual, the same people responsible for the Illinois Republican Party’s precipitous decline are once again returning to their “traditional” role in selecting the nominee. It seems incongruous to protest the backroom dealing of the Blagojevich Administration by engaging in that same kind of backroom dealing. The last time the Illinois Republican Party selected the nominee for the rest of us they brought in Alan Keyes. We all know how well that turned out. Maybe they learned their lesson, so let’s take a look at which horse they are backing.

Currently, it appears that this has resulted in coalescing support for Bruce Rauner as the salvation of the Illinois Republican Party. At this moment, perhaps he does have the policies that will bring the Republicans out of the wilderness. We don’t know mostly because he was selected in a star chambers audition in front of the party’s finance committee (basically a Cook County millionaires club).

While he has done impressively with his investment firm, he is a political unknown. What is know is that he has given far more to Democrats than he’s ever given to Republicans. With the exception of the 2008 cycle, most of his donations are to Democrats. If the secret Republican committee can’t do basic vetting of candidates, they are profoundly ill-suited to pick nominees.

For instance, he has given $200,000 to Democrat Mayor Daley, $150,000 to Democrat Forrest Claypool and can even boast of having given money to Democrat Rahm Emanuel (who’s signature accomplishment was the 2006 Democratic takeover of the House of Representatives). Skipping past the absurdity of the aristocracy of the party telling all of us that they know better than the voters, what, if anything, has Rauner gotten for those donations?

While I do agree that the “self-funding” candidate model of the Republican Party has been abysmal at producing solid candidates, it does not follow that having a secret tribunal of insiders who take no input from anyone (much less anyone south of I-80) is somehow the only other option. The only difference is that Bruce Rauner greased all the right palms before he formally announces his run.

There is a better way to finding good candidates and that is finding people with a solid record of political accomplishment and supporting them. Bruce Rauner’s sole accomplishment seems to be his investment company. Good for him but that doesn’t make him a good politician.

Candidates like Senator Bill Brady have years of political leadership under his belt. He’s run for office, he supports the party platform and has 16 years of political experience. He may not be well-liked among the ivory tower limousine Republicans from the North Shore, but he’s at least trying to win support of the voters not demanding their support from regal perches.

If the Republicans are to recover from the drubbing they have received in the last few election cycles, royal proclamations from on high are not the way to go. Self-funders are no either. What is needed are politicians with a record of accomplishment and a set of principles to take their message to the voters and engage them.

After 6 years of Blagojevich and Democratic corruption, the answer is a candidate who can convincingly stand up to corruption and who is willing to be transparent and open. We need candidates who will serve the people, not be beholden to nameless committeeman. Perhaps its time to trust the voters instead of letting unaccountable insiders pick our nominees.

February 9th, 2009 Posted by John Bambenek | Columns, Elections, Illinois, Politics | no comments

Column: Financial Mismanagement Caused Illinois’ Backlog of Bills

The following was an op-ed I wrote and was printed in about a half dozen Illinois papers in the last couple of weeks

Last week, state Comptroller Dan Hynes reported that the backlog of state bills has reached over $4 billion. Several vendors have threatened to stop providing services to the state if they cannot be paid on timely basis. Many Medicaid patients are finding fewer and fewer providers are willing to give them health care. Illinois is in a full-blown fiscal crisis that puts IndyMac to shame.

In the wake of this crisis, only two solutions are presented: to unleash draconian cuts to essential human services spending or massive tax increases in the wake of the largest global economic downturn in decades. There is apparently not a dime of waste in the state budget. There isn’t even any money spent on corrupt purposes to be cut. Yeah… and I’m a Chinese fighter pilot.

The fact is the state has been wasting money for decades. Remember the Loop Lab School that got a special $1 million check from the governor? What about the $25,000 checks from Sen. Hendon for educational programs that didn’t exist? And then there are the legislative pay increases. But that doesn’t even scratch the surface of the waste, fraud and corruption that permeates the closed-door budget process.

Earlier this year, Judicial Watch filed a Freedom of Information Act request on $2 billion worth of spending. This spending was the “member initiative” (basically Illinois’ equivalent of earmarks) spending of just the Senate Democrats. The interesting part of this request wasn’t that there was $2 billion in spending on “pet projects” but that the Illinois Senate and the state government refused to disclose what this money was spent on.

In a parting stiff arm to the taxpayers of Illinois, Senate President Emil Jones not only refused to disclose what the member initiative money was spent on, but he even outright rejected the Freedom of Information Act request. If you thought the Freedom of Information Act was supposed to allow taxpayers to find out what government officials were doing with their tax dollars, apparently you are mistaken.

What does this have to do with the backlog of bills? Everything. Each and every year the legislature wastes billions one these special member initiatives. In some cases they even hide those expenditures from the voters. This little 2 billion adventure in wasteful spending would cut our backlog of bills in half the first year. In two years, the backlog would be gone.

More importantly, it shines the light on the real problem, that is the legislature and governor who have pushed through unbalanced budgets each and every year with the problem coming to a head now. They may try to blame the economic downturn, but the reality is that after years of deficit spending, eventually the chickens come home to roost.

Governor Blagojevich, for his part, has done well in pump-priming the idea that any budget cut would result in drastic cuts to essential human services. He close state parks even though it would require forfeiting federal funds and provide only a meager savings to the state funds. He cut alcohol and substance abuse treatment programs. Never has he tried to actually cut the spending glut due to corruption or waste.

Politically, this means that taxpayers can expect a large tax increase to be proposed as the “only solution” out of this fiscal mess when the General Assembly convenes in January. It is time that voters and taxpayers stand up and demand that wasteful and corrupt “member initiatives” by cut, wasteful and duplicate programs be eliminated and empowering the state’s Auditor General to seek out and find where Enron-style book-keeping is occurring in the state government.

The emerging financial crisis of both unpaid bills and an inability to craft a balanced budget has been a long time coming. It is time for the General Assembly to learn to tighten their belt before they tax even more families into foreclosure or poverty.

December 3rd, 2008 Posted by John Bambenek | Columns, Corruption, Illinois, Politics | no comments

Schools Should Put Financial Records Online in Exchange for Sales Tax Increase

The following was a column that I wrote for the News-Gazette in regards to the 1% sales tax increase in Champaign County for school facility construction.

The Champaign County Board is poised to vote to put a referendum on the ballot that will allow the school districts in the county to benefit from an increased sales tax to pay for facilities. Some districts will then issue a partial abatement of property taxes to provide some relief in return for the increased sales taxes.

A look around the county will show that many districts are definitely in need of capital improvements and the state certainly has not helped matters with the ongoing fighting over such funds being made available to schools. However, one critical matter impedes the success of increasing sales taxes for schools: the lack of trust many citizens have in their school districts.
It is no secret that Champaign Unit #4, for example, is still struggling with issues related to the trust people have in that district. One of the major reasons that the $60 million dollar bond issue failed a couple of years ago was directly related to many voters not trusting the school district with that money. Urbana schools are not immune from trust issues because of their recent difficulties. In a time when many working families are being pinched, a solid case needs to be made that these funds will be used efficiently.
There is, however, a solution to the trust problem and that is proactive transparency on behalf of the schools. Under the Freedom of Information Act, any voter can submit requests to see the budget, any check written by the schools, salary information and contracts that a school board signs. However, this process can be cumbersome and is subject to some delaying on the behalf of government bodies.

The solution is simple: school boards should post their check registers online within 48 business hours of any transaction. All contracts and salary information should be placed on the web as well. This information is already public record, but taking the step of putting the information online without forcing voters and the media to undertake the process of a FOIA request will show a great deal of respect for the voters.
This information is rightly public and belongs to the voters. The Illinois Freedom of Information Act reads, in part: “all persons are entitled to full and complete information regarding the affairs of government and the official acts and policies of those who represent them as public officials”.
What better way is there for the school boards to show that they will spend the money appropriately than by showing the voters where the money goes? It will go far to rebuild the trust that has been lacking as of late.

Champaign County schools would not be the first to adopt a proactive stance to transparency. They would join schools in Palatine, Elmhurst, Carpentersville, and even the Collage of DuPage. In fact, Mahomet-Seymour schools already put some of this information online.

The information is already generated electronically so the cost of putting it online is effectively nothing. In fact, it actually creates cost savings by ending the expense in responding to routine FOIA requests which can be answered instead by going to the website.

Many critics of the school districts are able to lodge false charges about school spending (or misspending) because of the time and effort to get the truth. Schools should voluntarily put their financial records online not because they have something to hide, but precisely because they don’t have anything to hide. In so doing, they will join dozens of other school districts and institutions that are rebuilding trust in the schools and in government.
Many critics continue to charge year after year with each tax increase that the schools are misusing the money. It is time for the school districts to be proactively transparent to put these charges to rest. The voters are already, by right, entitled to this information. If schools want to rebuild trust and accountability, putting their financial records online is a great first step.

October 20th, 2008 Posted by John Bambenek | Columns, Politics, Unit 4 Race | no comments

A Republican Renaissance in Alaska? David Cuddy Challenges Ted “Bridge to Nowhere” Stevens

When David Cuddy decided to run against Senator Ted Stevens for the Republican nomination for the US Senate in Alaska, he had no idea that Stevens was going to be indicted on federal corruption charges. He was simply tired of the excessive earmarks, the disapproval of Congress in general and that Stevens was not focused on the nation’s problems.

Senator Stevens is the poster child of why the GOP got trounced in 2006 and his race was looking to be another Democrat pickup in 2008. However, chance kicked in and preparation with the right ideas met opportunity. Stevens was recently indicted, which has thrown the Republican primary wide open in a race that should be Stevens’ to lose.

Of particular interest in this race, at least from a national perspective, is the debate on earmark reform. Earmarks are legislative tools whereby legislators insert “pet projects” into legislation without debate and shower gifts upon their friends. Senator Stevens, the earmark king, made the practice well-known and despised with the infamous “bridge to nowhere” project where he tried to direct $223 million of federal funds to build a bridge to an island of 50 people.

Cuddy seeks to reform this practice with a common-sense solution, to make earmarks public and subject to debate. In the long-term, he believes the federal government shouldn’t be spending any money on local projects. If a town would like a public swimming pool, they shouldn’t be able to charge taxpayers in another state with the bill. The practice of trying to get “free federal money” needs to stop. It is a bit like sending a sandwich to Washington and lobbying for the leftover crumbs and calling it “success”.

Cuddy comes from a business background and applies economic approaches to policy issues. For health care, he argues it isn’t about who pays. That’s simply a matter of passing the high cost of health care around. The problem is the high cost and inefficiencies built into the health care system. He points to Walmart as a successful example of innovation to take an industry and radically reduce its costs. The high cost of health care is linked to another issue that he speaks on: immigration.

One of the causes of the high cost of health care is the “unfunded mandate” that hospitals must treat everyone who shows up regardless of their ability to pay. This includes illegal immigrants. The result is that those costs for health care are passed off on paying customers through higher fees, higher copayments and higher insurance premiums. The debate on who pays is an interesting aside, but it misses the point. Health care costs are skyrocketing.

Cuddy understands why immigrants would do anything they could to get to the United States. The incentives are so great compared to what is in Mexico, it just makes sense. The senseless moralizing against illegal immigrations (i.e. “ZO NOES! They Broke the Law!”) does nothing to solve the issue, especially when both the governments of Mexico and the United States encourage this. He argues the incentives need to be changed by enforcing the law, particularly on employers who knowingly hire illegal immigrants to push down wages.

Foreign policy, in general, he argues should disentangle us from foreign engagements. We’re in Iraq and we should finish the job, but the process to close foreign bases and end power projection is a task Cuddy believes the United State should undertake.

Cuddy winning the primary is not a given, he faces another Republican, Vic Vickers who will throw hundreds of thousands of dollars into the race. However, on the issues, Cuddy is clearly superior and shows Republicans what they need to do to stop losing. In short, Republicans need to run on their platform instead of running a platform to redistribute the spoils of power to their friends instead. Cuddy also has the endorsement of the Republican Liberty Caucus which has a strong presence in Alaska.

Cuddy is running to restore balanced budgets, to fix elections that overwhelmingly favor incumbents so that citizens can have a meaningful place in the political process again. It’d be a welcome change from Ted Stevens and hopefully will inspire more candidates like Cuddy to run for Congress.

August 14th, 2008 Posted by John Bambenek | Around the US, Columns, Elections, Politics | no comments

Sandbox Politics

UPDATE: Ok, with Pelosi changing her mind and the news that has come out since, I was wrong on this. It ended up being a great way to bring pressure and highlight an issue. And for once, it showed the Republicans fighting *for* something. Kudos.

Last Friday, the United States House of Representatives adjourned without voting on an offshore drilling bill supported by the Republicans. Instead of adjourning and going home for the five week recess that was scheduled, hilarity ensued.

The Republicans stayed, talking on the floor to "debate" the energy bill. In response, the Democrats turned off the microphones and the lights. A Republican Congressman figured out how to brute force the A/V closet and got the microphones back on. They tried to marshal the press out of the press room with the Capitol Police until a Republican decided to host an impromptu press conference.

To "pad" the numbers of people on the floor, they allowed staffers and visitors down and were shouting back up to the gallery and back. In short, it was a little bit like 7th grade homeroom when the teacher leaves the room.

Well, the Republicans decided that it was so much fun, they are doing it again today. To be fair, energy policy is something that merits serious consideration, but childish antics more suited for playgrounds than Congress is not the way to go about it.

But it appears that a faction, a small one at that, of Republicans have been spurred on by unserious pundits and activists. I say a small faction because this morning, RedState sent out a desperate e-mail for anyone in the DC area to head down to the House floor. That's right, they want the fever swamp bloggers down there to hoot and holler like it’s a high school house party when mom and dad are away. Of course, RedState is not new to childish and superficial politics.

Energy policy is a serious issue and families are being pinched by higher (albeit now falling) gas prices. I've been driving all around the state of Illinois in my pickup for a campaign I'm running, and I can tell you first hand its rough. We do need a diversified energy portfolio for this nation. Offshore and ANWR drilling certainly is part of that, as are other programs, such as expanded nuclear and wind power.

The Democrats, for their part, have shown themselves unwilling to deal with the issue, at least before Election Day. They have every incentive, the more pain people feel at the pump, the more they blame the party that controls the White House. It's a transparent hope that they drag their feet until November and then ride in to the rescue, showing the Democrats as the "energy" party. It isn't the first time someone played politics with important legislation; it won't be the last.

However, instead of carrying that message or showing that even Barack Obama is starting to support a new energy policy, childish games ensue. What happened to the party of ideas?

Instead of an intellectual advancement of a sound energy policy, the oxygen is sucked up by infantilism. The voters are fed up by politicians who are not advancing their values and they want solutions. They are so fed up, many have whole-heartedly embraced a mirage of hope and change. It should tell Republicans something that a strong chunk of the electorate has placed their hopes in cleaning up Washington on a … Chicago machine Democrat.

While it may be giddily amusing to engage in a general ruckus on the House floor, nothing is well-served. With the Republicans going into an election cycle where the conventional wisdom declares it to be a blood-bath-in-advance for them, you'd think they wouldn't give voters yet another reason to throw them out of office. Maybe they've already resigned themselves to defeat. I'd rather they be the party of ideas and leadership and not "a poor player, that struts and frets his hour upon the stage, and then is heard no more." At least those engaging in the antics are the minority of Republicans.

August 6th, 2008 Posted by John Bambenek | Columns, Congress, National, Politics | no comments