Suggested Answers - Short Quiz

[johnkarls]

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Question 1-A:

What is a Senate filibuster?

Answer 1-A:

In theory, a filibuster is the procedural rule/tradition that discussion/debate on any matter is unlimited, unless cut off by a so-called cloture vote (“cloture” is not a mis-spelling of “closure”).

Question 1-B:

How did a Senate filibuster operate historically?

Answer 1-B:

The filibustering group took turns speaking, while other members of the group slept. Senate tradition included no requirement that what was actually being said had to be relevant to the bill under consideration, so there are many recorded instances of Senators reading from telephone books of large cities just to have something to say.

However, opponents of the filibuster had to be available 24/7 because the lack of a quorum would result in a recess that would permit the filibustering group a considerable time to re-charge their batteries before the Senate could be called back into session.

The filibuster would continue for days or weeks until either (1) the Senate got tired of out-waiting the filibustering group and gave up, (2) the filibustering group was so small, it got tired and failed to keep talking 24/7, or (3) there was a successful cloture vote which, until 1949, required approval by two-thirds of the Senators present and voting.

Question 1-C:

Why were Senate filibusters used historically?

Answer 1-C:

Our authors are disingenuous in claiming repeatedly that filibusters were used with respect to civil rights legislation and “other matters of national importance.”

Filibusters, and the threat of filibusters, were used constantly between the Civil War and the 1960’s to defeat all civil rights legislation and discourage anyone from even considering civil rights legislation. If a filibuster was used for any other purpose during that period, “yours truly” was unable to uncover it!!! Indeed, if anyone else can uncover such an instance, s/he is requested to post it on this bulletin board!!!

Question 1-D:

How does a Senate filibuster operate today?

Answer 1-D:

Currently, the Senate filibuster rule simply means that any piece of legislation (other than the federal budget) can be required, by the will of a single Senator or a small group of Senators, to receive 60 votes for passage. There is no requirement for the filibustering group to speak at all.

Question 1-E:

Why are Senate filibusters used today?

Answer 1-E:

They are used for virtually everything except budget matters (since requiring 60 votes to pass a budget would likely mean no budget would ever be adopted).

Question 2:

What is an "ear mark"?

Answer 2:

An “ear mark” is the pet project of a single Senator or Congressperson, such as former Sen. Ted Stevens’ $398 million “bridge to nowhere” in 2005 which would have been taller than the Brooklyn Bridge and nearly as long as the Golden Gate to replace a twice-hourly ferry that connects a town of 8,900 with its airport. Traditionally, Senators and Congresspersons do not object to “ear marks” so that, in return, nobody will object to their “ear marks.”

Ear marks have become so prevalent in the last decade that there are literally tens (if not hundreds) of thousands of them each session. Indeed, in March 2010 the House Appropriations Committee banned “ear marks” benefiting “for profit” corporations and the NY Times reported that, incredibly, there had been more than 1,000 “ear marks” for solely PROFIT-MAKING corporations during 2009!!!

Under current rules, no Senator or Congressperson is required to identify his/her “ear marks” so that anonymity can protect the guilty!!! (Though, of course, they are all guilty!!!)

Question 3:

What is a "hold"?

Answer 3:

A “hold” is like a “black ball” since any Senator or Congressperson can place a “hold” on any piece of legislation and any Senator can place a “hold” on any appointment that requires Senate confirmation.

Question 4:

What is a "closed rule"?

Answer 4:

A “closed rule” means that a piece of legislation is reported to the floor under a “rule” that permits no amendments.

The device is used most often, if not exclusively, to prohibit amendments that would delete provisions that are politically unpopular – permitting supporters of the bill to say with sublime smiles to their constituents that the unpopular feature of the bill was just one of the “bitter pills” that the supporter had to accept in order to obtain the popular components of the bill when, in fact, a vote on an amendment to delete the unpopular provision would have eliminated it.

Question 5:

What is a "self-executing rule"?

Answer 5:

A “self-executing rule” is an amendment that is made to a bill after it has been approved by a committee but before it reaches the floor. It can be used to make technical corrections to the bill (such as correcting typos) though, of course, a technical-corrections amendment could have been introduced on the floor if the bill had been brought to the floor under a “closed rule” except for technical corrections. (Indeed, most “technical corrections bills” are introduced the following year and are often more voluminous than the original bill.)

The abuse occurs when the leadership permits a clandestine change to the substance of a bill, particularly when the bill is going to the floor under a “closed rule.”

Question 6:

Has there been any real improvement in Congressional ethics over the years?

Answer 6:

No, because nobody wants to address the real problem comprising campaign contributions (please see Q&A 12-13 below).

Question 7:

Why are committee chairmanships based on seniority inherently polarizing?

Answer 7:

Because committee chairs come from states or Congressional districts which, themselves, are on one or the other extreme so that elections are not competitive and the perpetual winners achieve the necessary seniority.

Question 8:

Why are open primaries inherently polarizing?

Answer 8:

Because winning candidates represent only the center of their parties (or, perhaps, even an extreme wing if there were multiple candidates).

Before primaries, parties tended to nominate candidates in the center of the entire electorate in order to compete effectively against the centrist nominated by the other party.

In this respect, there was in the 1950’s and 1960’s a “hue and cry” against Presidential nominations that were decided in the proverbial “smoke-filled back rooms”!!!

But who was smoking the cigars and making the decisions in the proverbial “back rooms”??? It was leader of each state delegation who, typically, was a sitting Governor or Senior Senator.

Even when states began providing for primaries, the sitting Governor or Senior Senator would run as a “favorite son” and would typically win in a landslide as her/his admission ticket to the “back room”!!!

It is respectfully suggested that the candidates selected by each party’s Governors and Senior Senators in the “back room” were much more centrist than those produced in the open-primary era.

Question 9:

Although party caucuses can be used to check the power of the party leadership in either chamber, why are party caucuses inherently polarizing?

Answer 9:

Because each party votes for a position and then enforces party discipline with threats of loss of power/influence, even though each party has centrists that would be willing to work on particular issues with members of the other party.

Question 10:

How did Nixon's severing the Southern (aka segregation) wing of the Democratic Party which had been carefully constructed by Southerner Woodrow Wilson (who segregated the U.S. armed forces with a simple Presidential Executive Order and appointed segregationists to the Supreme Court) and carefully nurtured by F.D.R. (who continued to appoint segregationists to the Supreme Court), and Nixon's grafting the Southern (aka segregation) wing onto the Republican Party further polarization?

Answer 10:

The Segregation Wing of the Democratic Party was always very conservative. Removing it from the Democratic Party left the D.P. much more uniformly liberal while grafting it onto the Republic Party didn’t appreciably change its conservative orientation.

Question 11:

When a Democratic Congress and Democratic Senate in 2007 and 2008 refused to report appropriations bills to the floor that already reflected the position of the Democratic Party caucuses on funding (or lack thereof) for the Iraq War and, instead, proposed a series of floor amendments that they knew would fail to garner 60 votes in the Senate - were they guilty of a mendacious charade to fool the public into believing the D.P. was against the war, or merely guilty of catering to their "Blue Dogs"?

Answer 11:

It was certainly a mendacious charade to fool the public. However, it is possible that party caucus votes (enforced by party discipline) were not sufficient to keep the “Blue Dogs” in line and, accordingly, the mendacious charade may have been all that could be achieved.

Incidentally, the Democratic Party is currently reprising its mendacious charade in the U.S. House of Representatives vis-à-vis a spending bill for the war in Afghanistan. On The Chris Matthews Show last Sunday (June 27) during the “Tell Me Something I Don’t Know” segment, Gloria Borger (CNN Senior Political Analyst) stated that the House Democratic Leadership has decided to let the funding bill pass but with the narrowest possible margin – the number of Democrats that will be permitted to vote against it depends on how many Republicans vote for it, according to Borger. (Needless to say, there is a priority list that determines which Democrats will be permitted to vote against the bill once their number has been determined by the number of Republicans supporting the bill).

Question 12:

Even if all of the foregoing problems could be solved, would anything likely change until outright bribes (aka campaign contributions) are eliminated? (After all, for our Feb. 2008 meeting 30 months ago, we focused on (1) "The Squandering of America" by Robert Kuttner, long-time columnist for Business Week, and (2) "Homo Politicus" by Dana Milbank, long-time columnist for the Washington Post - both of whom dedicated their books to the thesis that "campaign contributions" dictate everything that happens in Washington and that "campaign contributions" are just as likely to comprise extortion by our politicians as bribery of them.)

Answer 12:

No. (Though the points raised by Mann and Ornstein are also important.)

Question 13:

As "Exhibit A" for "extortion" by politicians (Dana Milbank's terms), he cited the shakedown of the financial community by Barack Obama at the beginning of his Presidential campaign - what was Barack Obama threatening to do to them?

Answer 13:

Dana Milbank was reporting on the fact that hedge fund managers pay long-term capital-gains rates on their compensation and that Barack Obama was threatening to impose ordinary-income rates on their compensation.

Incidentally, Congress is currently “goring the ox” of the hedge fund managers in the “American Jobs and Closing Tax Loopholes Act of 2010.” Obviously, making a “campaign contribution” to a presidential candidate has to be balanced by making “campaign contributions” to the key players in Congress.

Question 14:

Does Hollywood, like the hedge-fund managers Dana Milbank describes as being shaken down by Barack Obama, also lavish "campaign contributions" on candidates likely to be elected in order to protect the capital gains rates for their compensation?

Answer 14:

It would appear that Hollywood producers, directors, actors, etc., all receive long-term capital-gains rates on their compensation (please see Q&A 15 below).

It would be nice to be able to believe that Hollywood actually has some moral fiber (despite the content of many of their products), rather than merely being motivated to make “campaign contributions” to protect their favorable capital-gains tax treatment.

Question 15:

How does a "carried interest" (a concept borrowed from the oil industry) convert ordinary compensation into capital gains for both hedge fund managers and Hollywood stars/directors/producers/whatever?

Answer 15:

In the oil patch, the traditional “carried interest” or “farm out” involves an owner of oil rights being willing, because of having bigger fish to fry elsewhere, to let another player earn an interest in the oil by drilling. For example, an owner of undeveloped rights worth $100 million might be willing to permit another player to earn a 50% interest by expending $100 million for drilling. In any other industry, the original owner would be viewed as selling a 50% interest for $50 million (the amount of drilling relating to the 50% retained) and have to compute taxable gain or loss. In the oil patch, the “carried party” is not viewed as having a taxable event because the “carrying party” has merely added to the asset.

As transplanted in other industries, (1) a partnership is typically employed in order to avoid the extra layer of tax if a corporation had been used, and (2) a supplier of services, such as a hedge fund manager, earns a percentage of the profits which is structured as a profits-interest in the partnership in which the investors have put their funds. If the manager and her/his hedge fund are successful, the economic reward for the services is embedded in the value of the partnership interest which is a capital asset.

It would appear that Hollywood is playing the same game. If you look at the http://www.imdb.com listing for any Hollywood star, s/he has typically signed up in advance for 2-3 years worth of movies that are “in development” (aka, “pre-production”). It would appear that the reason for doing this is to structure their compensation, whether lump sum and/or a percentage of the gross, as a partnership profits interest that can be sold once the movie has hit the theatres and its success can be gauged, at long-term capital-gains rates. And signing up 2-3 years in advance starts the “holding period” for long-term capital-gains rates.

Incidentally, it would appear that the 2010 legislation aimed at hedge fund managers will also nail these Hollywood arrangements, though probably inadvertently (unless you take a generous view of Congressional competence and a cynical view of Congressional motives). If a typical Hollywood movie is only a fraction as complicated as a typical oil-patch deal, Hollywood capital-gains rates are probably history. For the curious who would like an explanation of why Hollywood’s “ox” is being “gored,” please see the technical analysis following the last Q&A.

Accordingly, even though Candidate Obama took “campaign contributions” from hedge fund managers and accepted “campaign contributions” from Hollywood, he will be able to stand tall during his re-election campaign since the “campaign contributions” of neither group will have protected them.

(Incidentally, even if the current bill does not pass, this tax loophole will remain on “the list” of the Congressional leadership to be used for “paying” for any future bill on any topic to keep it “revenue neutral” until one of the bills finally passes.)

Question 16:

Are all candidates who are virtually guaranteed a huge base due to ethnicity or gender likely to be prodigious "fund raisers"?

Answer 16:

Yes. Because their probability of electoral success will guarantee their ability to “shake down” various politically-favored groups for “campaign contributions” and guarantee that other politically-favored groups and wannabe-favored groups will lavish “campaign contributions” on them.

Question 17:

Mann and Ornstein begin their book with a description of the House vote on prescription drugs that took place on November 23, 2003, and lasted for nearly 3 hours. Obviously, they intended their description to be shocking. Was it shocking for the reason they intended?

Answer 17:

Since the beginning of the era of electronic voting, voting has typically taken 15 minutes though it is often extended for a few extra minutes for members to reach the chamber.

However, the authors admit that there is no “rule” limiting the time for a vote to be kept open. Accordingly, the “arm twisting” that normally takes place out of sight was, to some extent, occurring in plain view.

Nonetheless, “yours truly” was shocked (1) that the authors thought we readers would be so naïve as to think that “arm twisting” has never occurred with respect to any other legislation and (2) even more importantly, that our authors would display such utter disdain for the result achieved which was extending Medicare to cover prescription drugs.

Question 18:

Mann and Ornstein describe quite a few “problems” in addition to those listed above (and several of those listed above, such as “campaign contributions” in particular which are the ultimate problem, they don’t even mention at all). However, the additional “problems” (such as how much power is concentrated in a chamber’s presiding officer or its committee chairs) seems to hinge on whether Mann and Ornstein approve of the result –- too much power for a person of whom they don’t approve but too little power for a person of whom they do. Which raises the question of whether, aside from the real problems listed above which are clearly undemocratic 100% of the time, it is ever possible to design an institutional solution that will work despite the human beings that come to be involved. (A) Is a better solution to these “problems” something Mann and Ornstein don’t even suggest because they don’t recognize that these “problems” depend on personalities -- to lodge ultimate power in frequently-meeting caucuses (common-interest caucuses many of which are ad hoc -- in addition to party caucuses) and (B) isn’t this solution, to the extent it’s practical, really “getting back to the basics” of true democracy wielded by the members themselves?

Answer 18:

(A) Probably. (B) Yes.


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TECHNICAL EXPLANATION OF WHY HOLLYWOOD’S “OX” IS BEING “GORED”

The bill appears superficially to be aimed only at partnerships that hold “investment assets” no matter how small a percentage the “investment assets” are of total assets. Stocks, bonds, and other investments that would ordinarily be considered investment assets are often, if not usually, held in a partnership. Accordingly, the bill includes in its definition of “investment assets” any ownership interests in another partnership REGARDLESS OF THE CHARACTER OF THE UNDERLYING ASSETS IN THE LOWER-TIER PARTNERSHIP. Hence, the bill’s specific exception for a partnership that in turn owns an interest in a partnership that owns and operates a “family farm.”

So where is the proverbial “rattlesnake”???

For tax purposes (just like under English-American common law), many things are considered “partnerships” even though they are not legal entities designated by statute as partnerships. For example, a mere contract providing for how a relationship will be governed and how the economic rewards of the relationship will be split, will probably be treated as a “partnership” for tax purposes.

Accordingly, every relationship between a movie partnership and its actors/director/producers/distributors/etc. has to be structured as an ownership interest in the movie partnership.

Because a mere contract between the movie partnership and any one of them will be viewed as a lower-tier partnership turning the movie partnership into an “investment partnership” and destroying the long-term capital-gains tax rates for all of them.

The facts that (A) the lower-tier “partnership” (“contractual relationship”) is not a legal entity and (B) the parties to the “contractual relationship” may even have “elected out” of the normal tax-partnership provisions of the Internal Revenue Code with respect to the “contractual relationship” -- do not change the analysis.

This is because the definition of whether the movie partnership is an “investment partnership” depends on whether the “contractual relationship” is a “partnership” using a definition that is outside the normal tax-partnership rules (26 U.S.C. Sec. 700 series). Accordingly, an “election out” of applying the 26 U.S.C. Sec. 700 series rules to the “contractual arrangement” does not prevent the “contractual arrangement” from still being viewed as a “partnership” for purposes of characterizing the movie partnership as an “investment partnership.”