Tom Hebert

Dems Wrong to Target Stock Buybacks

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Posted by Tom Hebert on Tuesday, April 9th, 2019, 4:11 PM PERMALINK

Sen. Tammy Baldwin (D-Wis.) has introduced legislation that would restrict the right of companies to repurchase its shares on the open market, also known as stock buybacks.

Critics of stock buybacks claim that this repurchases come at the expense of investment in workers or the economy. In fact, by repurchasing shares, these companies are using excess capital to reinvest in themselves and create value for their shareholders.

Ending stock buybacks would harm economic growth. The economy is strong right now — between Q4 of 2017 and Q4 of 2018, GDP growth was 3.1 percent, dwarfing the anemic 1.8 percent average during the Obama administration. Nominal wages have grown by 3.4 percent over the last year, job openings sit at a record high of 7.6 million, and the unemployment rate is at 3.8 percent. Since Trump took office, the economy has added 5.1 million jobs, including nearly 400,000 in 2019 so far.

Restricting stock buybacks would also harm the 55 million workers that own a 401k and the 54 percent of Americans that own stocks. A recent floor speech by Sen. Pat Toomey (R-Pa.) highlights how stock buyback elimination would harm these workers:

“This idea would be very harmful to the people that it's presumably meant to help. You know about 40% of all equities in the U.S. are held in pension and retirement accounts. These are the accounts of teachers and cab drivers and truck drivers and folks who work at factories and do every other job that our economy depends on who put a little money away. It's in a 401k plan or it's in an IRA or it's in an employer-sponsored pension plan.”

Banning stock buybacks is a terrible idea that would have a cascade of negative effects to our economy. Sen. Baldwin and Senate Democrats should abandon this misguided legislation

Photo Credit: Lacy Landre- Flickr


Rep. Kevin Hern Praises Republican Tax Cuts

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Posted by Tom Hebert on Tuesday, April 9th, 2019, 4:00 PM PERMALINK

Congressman Kevin Hern (R-Oklahoma’s 1st District) addressed Americans for Tax Reform’s annual pre-Tax Day press conference, hosted by Grover Norquist.

Hern, a longtime business owner and job creator, talked about how the Tax Cuts and Jobs Act has been beneficial for his district.

“As a business owner and job creator for over 34 years, I know what burdensome tax policy looks like,” Hern said. “Since reform was passed, Oklahomans have seen a windfall of economic growth, wage increases, more jobs, better benefits, and the list goes on and on.

“In fact, we have a great example in our district — Tulsa-based QuikTrip is a very large 800-unit chain that has gas stations, convenience stores, and is constantly improving and innovating.

“They give all of the credit of their continued growth and all they’ve done for their employees, the bonuses they’ve given to their hourly employees, not to just their leadership, that they’ve given because of the Tax Cuts and Jobs Act. And there are many other examples around our district from that particular tax cut.”

Hern also touched on how the Republican tax law has driven prosperity around the country.

“You know, this was a crucial step in turning around our economy, and President Trump continued to push and push and he continues to push about growing our economy with pro-growth policies, and it’s a clear indicator of success and it’s working,” Hern said.

“We need to create more jobs, put Americans in those jobs, because that’s what drives our prosperity in this country – job creation, and putting Americans in those jobs.”

Hern drew a bright line between the tax and spend liberalism of the Democrat Party and the Republican tax cuts.

“Compared to our friends across the aisle who want to increase our rates to 70 percent, 90 percent, I don’t think anybody in this room or anybody in American wants to work and give 90 percent of their income to the federal government.

“In fact, it ought to be the opposite of that, and that’s why we’ve seen the great growth that we’ve seen and why we will continue to see it.”

Hern concluded his remarks with a call to make the tax cuts permanent, saying: “We’ve gotta continue our work, continue our job to make this permanent as we get beyond 2025.”

Read ATR’s extensive list of tax reform good news in Oklahoma here.


Rep. Adrian Smith Praises GOP Tax Law

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Posted by Tom Hebert on Tuesday, April 9th, 2019, 2:48 PM PERMALINK

Ways and Means Committee member Adrian Smith (R-Nebraska’s 3rd District) addressed Americans for Tax Reform’s annual pre-Tax Day press conference, hosted by Grover Norquist.

In his remarks, Smith highlighted the Republican tax law’s impact on economic growth and wages.

“We are seeing this economic growth in a way that’s substantive, it is meaningful, and workers are benefiting, our economy is expanding, and I think that’s good news in and of itself,” Smith said.

Smith also noted that the Tax Cuts and Jobs Act included important tax cuts on both the corporate and the individual side.

“And as we do sort through all of this, I think it’s important to note that even President Obama said we needed a lower corporate tax rate,” Smith said.

“But we Republicans were not going to pass a corporate tax cut and not give individuals tax relief as well. That’s why we doubled the standard deduction, that’s why we doubled the child tax credit, and really empowered workers.

“The whole bill created upward pressure on wages. That’s going to do far more for workers than a group of politicians thinking they can come up with new regulations.”

For more economic good news from Smith’s home state of Nebraska, click here.

 

Schweikert Praises Tax Cuts and Jobs Act

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Posted by Tom Hebert on Tuesday, April 9th, 2019, 1:42 PM PERMALINK

Ways and Means Committee member David Schweikert (R-Arizona’s 6th District) addressed Americans for Tax Reform’s annual pre-Tax Day press conference, hosted by Grover Norquist.

Norquist introduced Schweikert as “one of the guys who made the magic happen on tax reform.”

Schweikert highlighted the Tax Cuts and Jobs Act’s positive effects on the economy.

“In many ways, if you take a look at what’s going on, it’s a miracle mathematically,” Schweikert said at the press conference. “And you’d think our friends on the other side would actually embrace the joy of what’s going on in our society, where populations that were functionally written off as to be the permanent underclass, are not.

"Their employment numbers...are the fastest quartile with income growth, and I will argue with you that it is substantially because of the things we did in tax reform that are moving investment into the parts of our economy that actually increase productivity. Because you can’t pay people more if you don’t have a society that is becoming more productive.”

Schweikert also took aim at tax-hiking Democrats that spread disinformation about the Tax Cuts and Jobs Act.

“And remember, to the reporters that are here. I would love you to go back to just before tax reform was passed, and go back and grab the quotes from what our brothers and sisters on the left were saying was going to happen over the first 12 months in revenues,” Schweikert said.

“Go back and pull up the first five months in comparison [for FY 2018 and 2019], and you’ll see revenues are functionally identical. We did not hit Armageddon.”

Schweikert ended his remarks with a challenge to Congress and the press to put partisanship aside and look at the data.

“There’s good things happening out there, and it breaks my heart that in this hyper-partisan environment that we exist in, that there seems to be this inability in this body or even our press to take one step backwards and take a look at the baseline data and what’s going on and the really good things that are happening out there,” Schweikert said. 

Americans for Tax Reform has catalogued a list of good news arising from the tax cuts for Schweikert’s home state of Arizona, which you can find here.

Click here to watch Congressman Schweikert's remarks from today's press conference. 


The IRS Must Stop Harassing Taxpayers Over the Conservation Easement Deduction

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Posted by Alex Hendrie, Tom Hebert on Monday, April 8th, 2019, 9:00 AM PERMALINK

In 1976, Congress created a charitable deduction under section 170(h) of the tax code to encourage taxpayers to conserve their property for future generations. Congress has consistently reaffirmed this provision, known as the conservation easement deduction, in legislation over the past several decades.  

In recent years, the IRS has targeted taxpayers that claim the deduction. In a clear violation of Congressional intent, the agency has sought to make it more difficult for taxpayers to claim the deduction and has taken taxpayers to court over their use of this deduction.

While the IRS has a responsibility to go after bad actors, it is unacceptable for the agency to harass law-abiding taxpayers for claiming a deduction provided by Congress. Unfortunately, that is exactly what appears to be occurring.

Moving forward, policymakers should ensure that the deduction is being properly administered by the IRS and is being used to expand private conservation as intended by Congress. Congress should debate and consider reforms through regular order to ensure that the IRS is not subjecting taxpayers that are properly taking the deduction to undue scrutiny.

What is the Conservation Easement Deduction?

The conservation easement deduction has existed for decades and incentivizes property owners to conserve land and historic sites by offering a charitable deduction. 

In order to claim the deduction, the taxpayer must agree to restrict their right to develop or alter the property. Organizations known as land trusts agree to monitor the restrictions placed on the property. 

Essentially, the taxpayer agrees to have the land conserved for the benefit of future generations. The amount of the tax deduction is based on the value of what was donated – a value determined by an independent appraiser.

The taxpayer typically can deduct up to 50 percent of adjusted gross income (AGI) in any given year and carry forward any unused deductions for up to 15 years.  

Congress Has Consistently Reaffirmed Its Commitment to Easement Deductions

It is important to note that the conservation easement deduction has bipartisan Congressional support.

Congress initially codified the provision in 1976 and extended the provision in 1977. It was then made permanent in the Tax Treatment and Extension Act of 1980.

More recently, in 2006, Congress narrowed the definition of conservation easements. At the same time, Congress temporarily expanded the easement deduction to 50 percent of AGI. This expansion was routinely extended by Congress and made permanent in 2015.

The IRS is Targeting Taxpayers Over the Conservation Easement Deduction

Despite the long history of the conservation easement deduction, the IRS has recently taken aim at taxpayers subjecting them to burdensome new filing requirements and onerous costs. 

On December 23, 2016, the IRS published Notice 2017-10, making partnership donations of conservation easements “listed transactions,” which means the IRS suspects tax avoidance. This notice was implemented in the final days of the Obama administration without any opportunity for public comment.

The Notice ignores the fact that partnerships syndicated to multiple individuals are an extremely common form of financing real estate investments. As a result of the Notice, partnership conservation easement donations are being more heavily scrutinized, and taxpayers are exposed to a flurry of complex paperwork and compliance requirements. For instance, taxpayers wishing to claim an easement deduction covered by the Notice must now fill out Form 8886, a “Reportable Transaction Disclosure Statement.” This form takes approximately 20 hours to complete and has a top penalty of $100,000 for failing to properly complete it.  

Adding insult to injury, Notice 2017-10 was applied retroactively all the way back to tax year 2010, so the complexity and potential liability is significant. In fact, if an individual fails to comply with the new listed transaction disclosure requirements, they could be hit with penalties up to $100,000 with no reasonable cause exception. 

Notice 2017-10 does nothing to address the problem it identifies — overvaluation of the conservation easement. Instead of addressing potential overvaluation, the Notice just makes it harder for taxpayers to claim an easement deduction by burdening them with excessive paperwork and threat of audit. 

The IRS has also used Section 6695A of the code to constrain the use of easement deductions. Section 6695A attempts to ensure that appraisals are accurate and applies a penalty of 125% of the appraiser’s fee if the appraised value is 150 percent above the IRS’s determined value.

There are several issues with this penalty as it relates to easement deductions. The IRS now routinely asserts on audit that conservation easements have little or no value – no matter how carefully prepared. The unreasonable threat of the penalty has the unfortunate effect of deterring competent appraisers that would otherwise appraise conservation easements. In Colorado, for example, there are now only five appraisers who are willing to work on valuing conservation easements. The recent Department of Justice action seeking an injunction and disgorgement of all past income from one conservation easement appraiser (whose appraisals have been upheld in court) only adds to difficulties of taxpayers in finding a competent and willing appraiser.

In addition, the penalty inherently assumes a bad faith motive on the behalf of the appraiser. Two competent appraisers can have different opinions on the highest-use value of a donation while still acting in good faith.

The IRS is Hauling Taxpayers to Tax Court

The IRS is also taking taxpayers to court to deny conservation easement deductions by asserting that longstanding and common easement grant deed provisions violate the rules. The IRS is also routinely alleging (without the benefit of qualified appraisals) that conservation easement donations have little or no value and that taxpayer easement appraisals are inflated. While there is nothing inherently wrong with the IRS challenging taxpayers that may be abusing the law, the IRS should not be routinely challenging tax benefits that Congress has specifically provided, particularly when there is no evidence of abuse.

Under these cases, the burden of proof typically falls on the accused, not the accuser, flipping the entire notion of American justice on its head.

Reforms Are Needed, But Law-abiding Taxpayers Must Be Protected

To be clear, it is important that the conservation easement deduction is not abused by taxpayers. There are several simple fixes that would strengthen and protect the easement deduction from potential abuse. 

One possible solution is adding additional requirements specific to conservation easements to ensure the accuracy of appraisals by both taxpayers and the IRS.

Congress could also introduce more transparency into the process by requiring public disclosure of easement donations and the resulting benefits to the public.

These reforms would uphold the integrity of the conservation easement deduction while it remains in law for all taxpayers.

Photo Credit: Martin Haesemeyer


U.S. Economy Adds 196,000 Jobs in March

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Posted by Tom Hebert on Friday, April 5th, 2019, 9:35 AM PERMALINK

The Department of Labor’s March jobs report shows that the GOP tax cuts and regulatory relief are continuing to have positive effects on the U.S. economy.

The U.S. economy added 196,000 jobs in March. Year over year wage gains have continued to grow at 3.2 percent. March’s report shows that the economy has added approximately 525,000 jobs so far in 2019, and over 5.5 million jobs since President Trump took office.

The labor force participation rate is also holding strong at 63 percent. This is a stark contrast to the 40-year lows the labor force participation rate hit under the Obama Administration.

The healthcare industry saw 49,000 new jobs added in March, while professional and technical services added 27,000 new jobs. The construction industry also added 16,000 new jobs.

The March jobs report shows that the labor market is roaring back after a fluke jobs number in February. The new growth is yet another sign that the Republican Tax Cuts and Jobs Act is benefiting the working class with higher wages and more job opportunities.

Photo Credit: Gage Skidmore


Conservatives Oppose IPI at ATR Capitol Hill Briefing

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Posted by Tom Hebert on Tuesday, April 2nd, 2019, 6:01 PM PERMALINK

On Tuesday, Americans for Tax Reform held a Capitol Hill briefing on the Department of Health and Human Services (HHS) proposal to subject Medicare Part B drugs to an “International Pricing Index” (IPI).  

As ATR has written extensively, the IPI payment model will effectively import foreign price controls into the United States, lowering quality and access to lifesaving medicine. In November, ATR led a coalition of 56 conservative groups in opposition to the IPI.

ATR President Grover Norquist opened the panel by highlighting the effects of the proposal on trade, saying: “Under this rule, every time we win on trade, the administration would have to raise drug prices on Americans. This is a truly bad idea.”

FreedomWorks Director of Policy Patrick Hedger referenced his recent study, “Poison Pill: Importing Foreign Drug Price Controls,” to outline the potential illegality of HHS using the Center for Medicare and Medicaid Innovation (CMMI) to develop the IPI. Obamacare created the CMMI, which allows HHS to conduct pilot programs in order to reduce the cost of Medicare and Medicaid. While efforts to reduce entitlement spending should be applauded, CMMI is outside the appropriations progress and devoid of Congressional oversight, and is prone to be used as a tool to push broad policy changes, as the administration is proposing with the IPI.

(FreedomWorks Director of Policy Patrick Hedger)

Hedger highlighted HHS’ regulatory overreach in using CMMI to run a test case on over half of the country, stating that: “This far exceeds anything Congress intended CMMI to do under the statute.” Hedger also explained that price controls are bad policy.

Under a free market, prices are determined by supply and demand without government intervention. By artificially lowering the price of a good or service, the demand for that good automatically increases. The supplier cannot keep up with the new demand at the lower price, so scarcity occurs. In the prescription drug industry, scarcity could be a potentially fatal problem.  

Galen Institute President Grace-Marie Turner spoke on the IPI’s adverse effects on patient access to prescription drugs. Turner referenced a recent Galen Institute Study,“Examination of International Drug Pricing Policies in Selected Countries Shows Prevalent Government Control over Pricing and Restrictions on Access” by Galen Institute Senior Fellow Doug Badger, that compares availability of drugs in the U.S. versus countries with price controls. 

(Galen Institute President Grace-Marie Turner)

The study found that Americans have access to approximately 89 percent of total new drugs, while countries like Greece (access to 14 percent of new drugs) and Canada (access to 43 percent of new drugs) do not have the same access to lifesaving medicine that American patients enjoy.

Center for a Free Economy President Ryan Ellis gave broader context to the current healthcare debate, arguing that the IPI is a pillar of the left’s true goal: implementing Medicare for All. Ellis argued that conservatives need to stop acceding to the left’s healthcare demands and focus on market-driven policy changes that would reduce drug prices.


(Center for a Free Economy President Ryan Ellis)

Ellis referenced his recent op-ed, “The Republican Temptation to Cave on Medicare for All,” and cited three policies that conservatives should support: HHS’ rebate rule, streamlining the FDA’s drug approval process, and updating Hatch-Waxman to strengthen patents. Taken in concert, Ellis argued that these policies would stop the country’s gradual march towards Medicare for All.

The fact is, price controls do not work. The administration’s proposal to import price controls would harm patients, reduce access to life saving medicines, and opens the door to proposals that expand the federal government’s stranglehold over healthcare even further.


JOBS for Success Act Promotes Upward Mobility and the Dignity of Work

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Posted by Tom Hebert on Tuesday, March 26th, 2019, 1:58 PM PERMALINK

The Republican-passed Tax Cuts and Jobs Act has created a vibrant economy with immense opportunity for workers all over the country to move up the economic ladder.

In 2018, the economy grew at 3.1 growth, totally eclipsing the anemic 1.9 percent GDP growth under the high-tax Obama years. Since President Trump took office, the economy has added over 5.5 million jobs, and 2019 has seen approximately 330,000 jobs created so far. Unemployment is hitting record lows for key demographics including African-Americans, Hispanics, and women. Wages are increasing 3.2 percent, and job openings hit a record high of 7.5 million in February.

Despite this economic good news, there is still work to be done. While the labor force participation rate is on the rise, Congress should still reaffirm its commitment to ensuring that long-term employment opportunities remain available for American workers.

Senator Steve Daines (R-MT) and Rep. Kevin Brady (R-TX) have introduced legislation in their respective chambers that would encourage upward mobility for American workers. Their legislation, the “Jobs and Opportunity with Benefits and Services (JOBS) for Success Act” (S.802/H.R. 1753), reforms the Temporary Assistance for Needy Families (TANF) program to encourage and equip able-bodied adults with the tools they need to find long-term work.

Over time, Congress has allowed TANF’s work requirements to weaken, and many states have abdicated their statutory duty to encourage TANF recipients to find work. For a program designed to help Americans enter the workplace

The JOBS for Success Act introduces accountability back into the process by requiring that all TANF recipients have a job, are actively looking for a job, or are giving back to their community via volunteer work.

Recipients must also meet short and long-term career goals based on individualized plans built around their specific skill level and education. The legislation additionally requires states to issue regular report cards to the federal government on the efficacy of their programs.

The sheer fiscal weight of federal entitlement programs highlights the urgent need for real reform. According to CBO, federal spending on welfare has nearly doubled between 2006 ($369 billion) to 2016 ($744 billion). When factoring in state government spending, total government spending on welfare programs already exceeds $1 trillion annually. Without reform, CBO projects that federal spending alone will exceed $1 trillion by 2026.

Instead of throwing more money at federal programs, the JOBS for Success Act introduces accountability back into the TANF procress. Reforming TANF will build on the success of tax reform by promoting upward mobility so that Americans can get a job and keep their job. And by focusing on fostering an environment where the dignity of work is cherished and upheld, the JOBS for Success Act ensures that future generations of American workers will enjoy stable long-term employment.

Photo Credit: KidTruant- Flickr


KEY VOTE: ATR Urges NO Vote on H.R. 1, the For the People Act of 2019

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Posted by Tom Hebert on Tuesday, March 5th, 2019, 8:15 AM PERMALINK

Congress is expected to vote this week on H.R. 1, a sweeping piece of legislation that will consolidate political power on the left and threaten our electoral integrity. 

ATR urges a NO vote on H.R. 1

Since regaining control of the House of Representatives in November, Democrats have made it clear that they intend to leverage their newfound power to permanently alter American institutions to benefit themselves and their allies.

Their first major bill, H.R. 1, will fundamentally transform how elections are conducted in the U.S., politicize the historically bipartisan Federal Elections Commission, and suppress political speech for American citizens. Instead of the “For the People Act of 2019,” the bill should be called the “Democrat Political Protection Act of 2019.”

Click here to read ATR’s full letter on H.R. 1.

H.R. 1 Fundamentally Transforms How Elections are Conducted in the U.S.

  • The legislation implements a 600% match for certain political contributions to congressional and presidential candidates forcing taxpayers to subsidize political campaigns – even campaigns that they may disagree with. Under the provision, any individual that donates under $200 to a candidate or PAC is entitled to a $6 match to every dollar donated. In order to qualify for the match, a candidate must raise $50,000 in small-dollar donations or have at least 1,000 small-dollar donors.
     
  • Provisions like this have been abused in the past. An Arizona Congressional candidate took over $100,000 in public match funds and spent it on nightclubs, vehicle rentals, and restaurants. Instead of returning the entirety of the funds he stole, he only had to return $15,000.
     
  • In New York City, former city council member Sheldon Leffler was convicted of attempting to break up a $10,000 donation to take advantage of NYC’s public matching program. Similarly, a city council candidate was convicted of spending $17, 223 in public matching funds for personal expenses like groceries, restaurants, and gas.
     
  • If H.R. 1 became law, the federal government would force states to implement early voting, automatic voter registration, same-day registration, online voter registration, and no-fault absentee balloting.
     
  • The bill would invalidate voter identification laws all across the country by allowing voters to simply sign a statement affirming their identity as they enter their polling place. These massive changes infringe on states’ rights and threaten the integrity of our election process.
     
  • Article I Section IV of the Constitution clearly gives state legislatures the primary responsibility for — quote — the “times, places, and manner of holding elections for Senators and Representatives.” This is a blatant power grab by Democrats to rewrite election laws to benefit themselves and their friends.
     

H.R. 1 Politicizes the Federal Elections Commission

  • This legislation politicizes the historically non-partisan Federal Elections Commission (FEC), transforming it from a six-member bipartisan committee to a five-member committee.
     
  • Currently, the FEC is comprised of three Democrats and three Republicans and needs four votes to move forward with any prosecution of alleged campaign violations or investigations.
     
  • If H.R. 1 were implemented, the panel would contain two Democrats, two Republicans, and an “independent” from a minor political party. Three votes would be required to move forward on any matter. Under this rule, a president could appoint a Bernie Sanders-style “independent” to serve as the fifth member of the FEC.
     
  • H.R. 1 takes a step further in politicizing the FEC by allowing the president to unilaterally pick the FEC Chairman and abolishing the longstanding requirement that the Chair and Vice-Chair be from different parties. The legislation also expands the Chair’s power over the committee, allowing him to issue subpoenas, compel testimony, and control the FEC budget without consulting the rest of the commission.
     

H.R. 1 Suppresses Freedom of Speech

  • The legislation would stifle free speech through new donor identification requirements. If implemented, organizations that make “campaign-related disbursements” totaling more than $10,000 during a two-year period would have to publicly identify the donors that gave over $10,000 during that period.
     
  • The legislation continues to chip away at free speech by inventing a new regulation called “PASO,” an overbroad standard that asks whether political speech “promotes,” “attacks,” “supports,” or “opposes” a candidate or official. This vague standard is open to broad interpretation by the ruling party and is a clear tool for political targeting.
     
  • In a further attack on free speech, H.R. 1 undoes the FEC’s “internet exemption” which excludes the internet from regulation of political speech. Essentially, if the FEC deems that online communication is “paid,” it is fair game for the same regulations and donor disclosure requirements as traditional advertisements.
     
  • This even includes any communication any organization makes on social media platforms like Twitter and Facebook, including paid staffers managing the platforms. 
     
  • This provision implements a “public file” requirement for any person or organization spending over $500 in a calendar year, forcing them to identify the name, address, and contact information of ad sponsors that are not candidates or with the campaign.
     
  • The bill expands the “stand by your ad” disclaimer in video advertisements, forcing organizations to identify their top five donors at the end of advertisements. This is a clear infringement on the First Amendment rights of all Americans to engage in political speech without fear of retaliation from those who disagree.
     
  • While the bill makes a lot of references to Super PACs and dark money, it is clear that these provisions will affect the free speech rights of everyday Americans looking to engage in the political process.
     

Taken as a whole, H.R. 1 is an unconstitutional bill that federalizes the elections process, politicizes the FEC, and suppresses freedom of speech. Congress should reject this legislation. 

Photo Credit: https://www.flickr.com/photos/shaw_girl/2818564653/in/photolist-5i4T5i-4z7it6-nmssM4-2P7T9M-bVj1bB-8Cf3XN-e5nZxK-aJT2Hr-mQsfg-4fjxS-TD5gd8-4zbyGq-HkGSYd-4fjxW-nWn2yx-5TduB5-5VHhVb-diFmbF-d6ESJj-7ddsHn-ttfy5-4FSn2y-4fjxX-psh37k-8oG2Sf-4E1myB-b2NpKD-nrvU9J-


Democrats Are Damaging Electoral Integrity With H.R. 1

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Posted by Tom Hebert on Thursday, February 14th, 2019, 9:00 AM PERMALINK

In the first few weeks of the 116th Congress, House Democrats have introduced H.R. 1, a sweeping piece of legislation that will weaponize elections and restrict political speech for all Americans. The legislation is brimming with unconstitutional provisions that would damage our electoral integrity and rewrite longstanding election law for the benefit of the Democrat Party.  

The new legislation politicizes and weaponizes the FEC to favor the ruling political party. Under current law, the FEC is a six-member commission, with three Republicans and three Democrats. Four votes are needed to move forward with any prosecution of alleged violations or investigations. This construction ensures that decisions made by the Commission are truly bipartisan and free from any political animus.

H.R. 1 fundamentally changes the construction of the FEC by reducing the number of members from six to five. Advocates of H.R. 1 try to obfuscate this clear politicization by insisting that the new five-person committee must consist of two Republicans, two Democrats, and one “independent” member that is a member of a minor political party.

By this logic, the president could appoint an independent like Bernie Sanders, who is functionally a liberal Democrat, to be the fifth member of the FEC. The new construction rigs the system to ensure total partisan control of the FEC, exactly the opposite of how the Commission is designed under current law.

To make matters worse, H.R. 1 authorizes the president to pick the Chairman of the FEC, all but ensuring total presidential control of the Commission. Under current law, the FEC has a Chair and Vice Chair, and they must be from different parties and selected by the Commission. Not only would H.R. 1 allow the president to pick the Chair, the legislation drastically increases the power the Chair has over the committee.

Essentially, the Chair would function as Chief Administrative Officer over the committee, and would be allowed to act on his own with regard to issuing subpoenas, compelling testimony, and controlling the FEC budget. H.R. 1 also abolishes the requirement that the Vice Chair must be a different party than the Chair, further demonstrating that Democrats want the ruling political party to have ironclad control over a historically bipartisan agency. 

H.R. 1 also changes how campaigns are funded. The bill implements a subsidy for politicians in the form of a 600 percent match for small-dollar political contributions. Any individual that donates under $200 to a candidate or PAC is entitled to a 6 to 1 match from the federal government. In effect, this provision would force taxpayers to subsidize political campaigns. This insane 600 percent match of political contributions would be another step towards campaigns funded by theft from taxpayers instead of voluntary political contributions.

Another provision contained in H.R. 1 is new donor identification requirements that would further suppress free speech. According to the new legislation, organizations that make “campaign-related disbursements” totaling more than $10,000 during a two-year period must publicly identify all that gave over $10,000 during the two-year period. The legislation also expands the “stand by your ad” disclaimer in video advertisements, forcing organizations to identify their top five donors at the end of advertisements.

This is obviously an egregious infringement on the First Amendment rights of every American to support causes without fear of intimidation or harassment from those that may disagree. Especially in today’s rancorous political environment, protecting the integrity of donor information is more important than ever.

The bill also creates numerous cases where the ruling political class suppresses political speech. Specifically, the bill creates a new standard for regulating political speech called “PASO.” The PASO standard is an overly-vague standard that asks whether speech “promotes,” “attacks,” “supports,” or “opposes” a candidate or official. If political speech meets the vague PASO standard, the speech can be regulated.

H.R. 1 also undoes the FEC’s “Internet exemption” which excludes the internet from regulation of political speech. Essentially, if the FEC deems that online communication is “paid,” it is subjected to the same regulations and donor disclosure requirements as traditional advertisements. This overbroad and overvague provision would even include content on free platforms like Twitter and Facebook, as the paid definition extends to paid staffers managing the platforms. 

Finally, this legislation contains a whole host of bad provisions that would federalize and fundamentally transform how elections are conducted in this country. If the bill was signed into law, the federal government would force the states to implement early voting, automatic voter registration, same-day registration, online voter registration, and no-fault absentee balloting. The bill would also invalidate voter identification laws all over the country by allowing voters to simply sign a statement affirming their identity instead of providing identification.

H.R. 1 also contains language designed to block voter intimidation, which seems reasonable until you realize that it largely duplicates measures already in place all across the country. These systemic changes are a gift to campaign lawyers and their litigious clients, and it comes at the cost of our electoral integrity.

Make no mistake about it – H.R. 1 is a dangerous piece of legislation. If implemented, the bill would suppress political speech, politicize and weaponize the FEC, fund campaigns through theft of taxpayer dollars, and implement numerous reforms that would damage our electoral integrity. This parade of horribles is a clear attempt to grab power by Democrats and to rewrite election law to benefit their cronies and lobbyists. Congress should reject this legislation. 

Photo Credit: Flickr


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