The Treasury Department and the IRS

Here's a tiny tiny flowchart of the Treasury Department. See if you can spot the Internal Revenue Service on the bottom left corner. Click here for a larger version, and here for a list of all the bureaus within the Treasury Department. We'll unpack this soon.

Interest group influnce on Texas' education policies

This Texas Tribune piece (published in the New York Times) suggest that fight over the future of public education in the state boils down to a battle between two well connected and well funded interest groups: Raise Your Hand Texas and Texans for Education Reform.

Second term scandals

Every president has had them.

Bowman v. Monsanto Co.

The Supreme Court ruled 9-0 that a farmer who bought "Roundup Ready" seeds from Monsanto could not use newly grown seeds for replanting. They had to purchase new seeds every year, the patent was not "exhausted" when the seeds were originally sold. The case is Bowman v. Monsanto Co., and is yet another patent case decided by the court.

From ScotusBlog's opinion recap:

As the case came to the Court, the parties agree that ordinarily it violates a patent to make or use the patented invention without the owner’s consent (often granted in the form of a license).  The parties also agree on the major doctrinal exception, the doctrine of “exhaustion,” which holds that a patent holder’s rights in a particular patented object are largely “exhausted” by an authorized sale of that object: the purchaser has a free right to use and resell the purchased copy of the invention.

Bowman argues that the right to “use” the seed that he purchased necessarily included the right to plant the seed and its progeny – that is, after all, the natural use of seed.  The Court rejected the argument out of hand.  “If the purchaser of [the sold] article could make and sell endless copies, the patent would effectively protect the invention for just a single sale.”

The Court presumably was influenced by the severe consequences for Monsanto (and others like it).  The briefs of Monsanto and its amici had emphasized the high up-front costs of developing genetically engineered products like the Roundup Ready seed.  The Court commented:

Were the matter otherwise, Monsanto’s patent would provide scant benefit.  After inventing the Roundup Ready trait, Monsanto would, to be sure, receive its reward for the first seeds it sells.  But in short order, other seed companies could reproduce the product and market it to growers, thus depriving Monsanto of its monopoly.

The IRS scandal gives us a good opportunity to focus on the organization of the federal bureaucracy

Here's a look at the IRS organizational chart . For some reason I can't paste a copy on this post.

Note that it only shows top level personel. I'll dig around and see what I can find regarding lower level officials, and it has no detail about what these different people do. At some point we'll get more info about who thought the screening process up and implemented it, as well as how higher ups dealt with the revelation.

The division in question - the Tax Exempt and Government Entities Division - is one of nine under "Sevices and Enforcement." More on them separately.

Inspector general's report is issued

And you can get a digital copy here.

The accompanying NYT story is here.

M3 Written Assignment #2

What is the topic of your report? Remember that you are to find some specific aspect of this scandal and dig into it. I don't want a journalistic account of what happened. Focus on one specific thing. Refer to the page I set up on the wiki - click here - for a list of possible subjects, but be innovative.

We can talk about this in class.

M3 Written Assignment #1

What are the facts regarding the IRS treatment of Tea Party applications for 501(C)(4) status? What do we now and what do we not know? What things are not contested and what things are?

I'd recommend reading through the inspector general's report, but find your own sources. Share them.

It might be interesting to look at which groups - partisan and ideological - are saying what. But that might be too much.

Stick to the facts here.

This day in history: The constitutional convention was scheduled to begin

But only eight delegates showed up, so no business could be conducted. Nothing would happen until May 25, when a quorum was met, offocers were elected and rules were prepared.

Wonkblog links on the IRS scandal

The full story about what happened and when regarding the IRS treatment of Tea Party groups has yet to be revealed, but Wonkblog has a variety of links related to it, so it may be the best we can do right now.

Some highlights:

Core Issue: " . . . the IRS was using the term “tea party” and its associated language as a flag for organizations that might be more political than the 501(c)4 designation permitted.

Key questions:

- Were conservative groups the only ones targetted?
- Was the Cincinnatti office the only one involved?
- Who made the decision? And what did higher up do abou tit?
- Are Tea Party groups really social welfare organizations that shoudl qualify for tax exempt status?
- What is the appropriate outcome?
- Is Congress partially responsible because they did not provide sufficient guidelines for determining which groups quzlify as 501(c)(4)'s and which do not?

Other random observations:

- One third "of all House committees that are now “investigating some aspect of the Obama administration”
- Scandal politics have taken over Capitol Hill. Dysfunction continues.
- According to one political scientist, conditions may be right for scandals to take over the public imagination. These are more likely to happen if a president's approval ratings are very low among the opposition party identifiers.
- If scandals take over, it simply fits the typical story of second presidential terms. They tend to be scandal ridden, nothing new here.

The end of the 83rd session is near . . .

. . . and action is picking up. A couple weeks of all-nighters loom.

The Texas Tribune and the Austin American Statesman describe where we are now.

This will be a secondary concern for the 3 week 2305 class since we'll be focusing on national government, but we will monitor legislative developments that relate to national policies.

I anticipate having 2306 students this summer focus heavily on the session. Looking backward allows us the benefit of hindsight in determining what happened, what didn't, and why.

ISD and Municipal Election Results - May 11, 2013

Click here for full results from Brazoria County.

And here for results for Harris County.

Commentary to follow.

What is a 501(c)(4) organization?

Here's a good primer from the Washington Post. It answers basic questions about the case so far.

Summary info:

- A 501 (c)(4) is a subset of the groups that fit under the IRS's tax code for nonprofit groups. Wikipedia has a page detailing all of the 501(c) categories that exist. The 4th category is reserved for "Civic Leagues, Social Welfare Organizations, and Local Associations of Employees." These have proliferated since the Citizens United decision of 2010.


- Since they are supposed to be social welfare organizations, politics is not supposed to be their primary focus. They are to spend less than 50% of their money on politics. The trick is determining what that means. What is "politics" and what is "social welfare?" And who gets to make that determination?

- Many of the most groups most active in the recent election fell under this categorym including Crossroads GPS and Organizing for Action.

- The Center for Responsive Politics thes groups spent more than $300 million on the campaign. $263 million by conservative groups and $35 million by liberal groups. 501(c)(4)'s spend more on the campaign than super PACs by a 3-2 margin.

- A super PAC has to disclose its donors while a 501(C)(4) does not. This explains their appeal.

- Applications for these organizations doubled following the Supreme Court's Citizens United decision which allowed corporations and labor unions to spend as much money as they wish on elections.

- The IRS used key terms - like Tea Party - to flag certain groups it suspected of not qualifying as social welfare organizations.

- The Inspector General is set to release an audit of the process, and at least two House congressional committees are planning to investigate this.

The IRS audits the Tea Party

There's lots flying around on Friday's revelation that the IRS was auditing Tea Party groups that had applied for 501(c)4 status prior to the 2012 election.

It also applies to alot of what we will cover this class, including the organization of the bureaucracy and the way that decision are made within it, presidential power over the bureaucracy, and the murky status of the superPACs and other organizations involved in political activities without making it seem like they are really getting involved in political activities.

The purpose of the designation is to grant tax exempt status to social welfare organizations that "promote the common good and general welfare of the people of the community as a whole." Political parties and PACs generally do not fit this bill.

The Washington Post broke the story that an internal audit is set to be released, click here for one of  the stories.

For a summary of various points about the story, click on Andrew Sullivan's post here.

There'll be lots more on this.

Will the Obama Coalition last?

Nate Cohn argues that despite doubts, the coalition that elected Obama in 2008 not only held together in 2012, might survive for some time to come. This is based on a comprehensive analysis of the electoral released recently by the Census Bureau. The white share of the population continues to decline, and as long as that's the population that is the Republican Party's base, the future looks dim for the party. Whites right now are 73.7% of the population, but only 58% of 15-18 year olds. 

Do we assume presidents are more powerful than they really are?

Norm Ornstein says yes, we do, and has a major beef with people who argue that things would work better in Washington if Obama was a better leader and could work his will with Congress. He reminds readers that our system does not work that way, and it never has even though we like to think otherwise.

. . . at nearly every speech I give, someone asks about President Obama’s failure to lead. Of course, that question has been driven largely by the media, perhaps most by Bob Woodward. When Woodward speaks, Washington listens, and he has pushed the idea that Obama has failed in his fundamental leadership task—not building relationships with key congressional leaders the way Bill Clinton did, and not “working his will” the way LBJ or Ronald Reagan did.

Now, after the failure to get the background-check bill through the Senate, other reporters and columnists have picked up on the same theme, and I have grown increasingly frustrated with how the mythology of leadership has been spread in recent weeks. I have yelled at the television set, “Didn’t any of you ever read Richard Neustadt’s classic Presidential Leadership? Haven’t any of you taken Politics 101 and read about the limits of presidential power in a separation-of-powers system?”

But the issue goes beyond that, to a willful ignorance of history. No one schmoozed more or better with legislators in both parties than Clinton. How many Republican votes did it get him on his signature initial priority, an economic plan? Zero in both houses. And it took eight months to get enough Democrats to limp over the finish line. How did things work out on his health care plan? How about his impeachment in the House?

No one knew Congress, or the buttons to push with every key lawmaker, better than LBJ. It worked like a charm in his famous 89th, Great Society Congress, largely because he had overwhelming majorities of his own party in both houses. But after the awful midterms in 1966, when those swollen majorities receded, LBJ’s mastery of Congress didn’t mean squat.

No one defined the agenda or negotiated more brilliantly than Reagan. Did he “work his will”? On almost every major issue, he had to make major compromises with Democrats, including five straight years with significant tax increases. But he was able to do it—as he was able to achieve a breakthrough on tax reform—because he had key Democrats willing to work with him and find those compromises.

For Obama, we knew from the get-go that he had no Republicans willing to work with him. As Robert Draper pointed out in his book Do Not Ask What Good We Do, key GOP leaders such as Eric Cantor and Paul Ryan determined on inauguration eve in January 2009 that they would work to keep Obama and his congressional Democratic allies from getting any Republican votes for any of his priorities or initiatives. Schmoozing was not going to change that.

Ewwww....

This story circulated a couple weeks back, but it seems that the Jamestown settlers had a more varied diet than we once thought.

We tend to safe guard the reputations of our predecessors - uncomfortable truths are . . . uncomfortable.

A business friendly Supreme Court

The NYT flags a study published in the Minnesota Law Review that argues the current Supreme Court is the most business friendly court since WW2:

In the eight years since Chief Justice Roberts joined the court, it has allowed corporations to spend freely in elections in the Citizens United case, has shielded them from class actions and human rights suits, and has made arbitration the favored way to resolve many disputes. Business groups say the Roberts court’s decisions have helped combat frivolous lawsuits, while plaintiffs’ lawyers say the rulings have destroyed legitimate claims for harm from faulty products, discriminatory practices and fraud.

From the NYT: Telecom Investor Named to Be F.C.C. Chairman

A recurrent theme in this class is elite control of governing institutions. We are said to be a democracy and that rule rests with the people, but we are in fact a democratic republic. This means that the preferences of the population are filtered through a variety of institutions - legislative, executive and judicial - established in the Constitution.

What really matters is who controls those institutions.

Quite often these people are those who have the wealth and organizational ability to help supporters get elected to office, and then have the ability to control the institutions that set the rules that govern what they do. We use a variety of terms to refer to this: agency capture, the revolving door and the iron triangle among them. All refer to the relationships that begin to develop around the different institutions, organizations and people who have an interest in and influence over, some matter of public policy.

The concern is that these relationships - and the fact that private interests are part of these networks - makes it likely that private interests will win out over public interests in how these policies are set and implemented. On the other hand, these relationships ensure that participants in the public policy process have expertise in that field. The trick is balancing these two.

Here's a recent story from the New York Times that highlights this tendency in the communications industry. A well connected telecommunications investor and lobbyist - Tom Wheeler - has been named the head of the FCC - the regulatory agency that sets rules for the industry:

Mr. Wheeler served from 1992 to 2004 as the chief executive of the Cellular Telecommunications and Internet Association, the cellphone industry trade group, and from 1979 to 1984 was chief executive of the National Cable Television Association. That has led some telecommunications watchdog groups to worry that he might favor those businesses over consumers.

And:

Once he takes office, Mr. Wheeler, 67, will be under pressure not only to demonstrate that he understands rapidly changing technologies, but also to make clear that his previous work as a top lobbyist for the cellphone and cable television industries will not prejudice his F.C.C. decision-making.

Mr. Wheeler will have to confront several issues almost immediately upon Senate confirmation and being sworn in. The commission is preparing for a complicated auction next year of bands of spectrum — the electromagnetic airwaves over which television, radio and cellphone signals travel.

. . . Mr. Wheeler and the commission will also have to decide the extent to which various companies will be eligible to bid for the bands of spectrum. Some consumer advocates say they believe that AT&T and Verizon already control too much of the wireless phone market — roughly 70 percent — and should not be allowed to lock up more spectrum.

The companies, some members of Congress and others, however, want the F.C.C. to maximize revenue from the spectrum auction — which would mean allowing AT&T and Verizon to buy as much as they want. 

Since this is topical - we might want to try to unpack the relationships that exist in the telecommunications sectors and the Federal Communications Commission. It'll give us an idea about how political influence really flows on the national level.

"These United States"

The Atlantic noted that President Obama used the term "these United States" instead of "the United States" during the recent dedication of the George W. Bush library and went into the historical significance of the two different terms.

The former describes the US as a collection of discreet states while the latter sees it as a singular nation. This is an important distinction.

The author  notes that Ronald Reagan used the term alot, but not many other recent presidents, and few since the Civil War. They speculate on what this means for the internal cohesion of the nation. Is the polarization we've witnessed in Congress spreading throughout the nation? If so, are we approaching an increased crisis in our collective ability to govern?

We cover this topic in early lectures. The Declaration of Independence and the Articles of Confederation treated the phrase "Unites States of America" as a descriptive, plural term, while the Constitution attempted to solidify the status of the nation and the relationship between the states and used the phrase to refer to a single entity. An ongoing battle has been waged in defining relationship between the powers of the national and state governments ever since. The story simply highlights that fact.

I recommend a quick read.

Transition

Spring grades have been inputted and attention turn to the 3 week mini-semester starting Wednesday.

I dropped off highlighting news items relevant to the course. The upcoming mini class focuses on the national government, so most of what will be posted regard national issues, but since the Texas Legislature is set to wrap up its 83rd session expect quite a bit on that as well. Once the summer semesters start up, and the class on state and local issues run, we'll try to make sense of what happened this spring.

What follows is a handful of posts about recent developments, the Benghazi hearings and the revelation that the IRS has been investigating Tea Party groups among them.

Upcoming mini 3 students should take note, past students are welcome to follow along and contribute if possible.

Final Exam Schedule Spring 2013

You can find the schedule here, but these times apply to my lecture classes:

8 - 930am MW class - May 8th 8 - 10am
930 - 11am MW class - May 6th 8 - 10am
11 - 1230pm MW class - May 6th 1030 - 1230pm
11 - 1230pm TTH class - May 7th 1030 - 1230pm
1 - 230pm TTH class - May 9th 1 - 3pm

The 2301 and 2302 online classes will have their finals opened up all day May 9th. You'll have all day, midnight to midnight, to complete it.

You'll find more detail soon on blackboard. I expect to have the final ready to go around Tuesday or so.

Attention 2305 and 2306 M2's

Your final will be opened up on blackboard tomorrow all day - from midnight to midnight - and you will have 2 hours to answer 110 questions. You can find the test by clicking on the assessment tab.

About two weeks back I posted links to review sheets. In case you did not see them - here they are again:

GOVT 2305
GOVT 2306