Mark Schmitt

Roosevelt Institute Senior Fellow

Recent Posts by Mark Schmitt

  • The IRS, Non-Profits, and the Challenge of "Electoral Exceptionalism"

    May 15, 2013Mark Schmitt

    What the IRS scandal really shows us is that it's getting harder and harder to draw a line between electioneering and political speech.

    What the IRS scandal really shows us is that it's getting harder and harder to draw a line between electioneering and political speech.

    As the report of the IRS Inspector General shows, the agency’s scrutiny of conservative groups applying for non-profit status was, more than anything, a clumsy response to a task the IRS is ill-equipped to carry out – monitoring an accidental corner of campaign finance law, a corner that was relatively quiet until about 2010.

    That corner is the 501(c)(4) tax-exempt organization, belonging to what are sometimes called “social welfare” groups, which enjoy the triple privilege of tax exemption (though not for their donors), freedom to engage in some limited election activity, and, unlike other political committees (PACs, SuperPACs, parties, etc.), freedom from any requirement to disclose information about donors or spending. The use of (c)(4)s as campaign vehicles didn’t originate with the Citizens United decision in 2010 (Citizens United, the organization that brought the case, was already a (c)(4)), but the decision seems to have created a sense that the rules had changed, and even small groups – especially, apparently, local Tea Party organizations -- rushed to create (c)(4)s.

    501(c)(4)s are not prohibited from engaging in political speech of most kinds. They are free to be “biased” without jeopardizing their tax exemption. They can advocate for or against legislation, they can lobby the government or criticize it. They don’t have to make any effort to be “nonpartisan” – for example, they can support a proposal that is only supported by members of one party, or directly advise only members of one party. And they can engage in some activity directly intended to influence the outcome of an election, as long as that doesn’t constitute the organization’s primary purpose.

    There’s some confusion about the definition of “primary purpose,” discussed in great depth elsewhere, but what the IRS was trying to do was to identify organizations that seemed more likely to be heavily involved in electoral activity. Since the organizations were new, there was no way to look at their actual activities to see whether they were mostly electoral. So the agency had to rely on clues in the applications, like names and telltale phrases. If organizations had words like “Democrat” or “Republican” in their titles, for example, it would be reasonable to look more closely at their election activities, or possible future activities, than an organization that called, for example, “Save the Turtles.” I’m told that organizations with the names of political parties do receive extra scrutiny, even if in some cases, like “Students for a Democratic Society,” the word might mean something unrelated to the name of the party. That’s what the closer scrutiny would find out.

    “Tea Party” in 2009 and 2010 was unquestionably an election category – there were “Tea Party” candidates and there was a “Tea Party Caucus” in Congress. It was not unreasonable for the IRS to use that phrase as an indicator that an organization using that phrase might be more inclined to engage in elections. There are comparable phrases on the left – for example, the term “Netroots” might suggest election involvement, as there were groups that identified and endorsed “Netroots” Democratic candidates in 2006 and later. Perhaps there were simply fewer organizations applying for (c)(4) status with that word, or they came in before the 2010 flood, or perhaps the IRS did screen on that word – we don’t know.

    While there’s a perfectly plausible case for the IRS to use flag-words that indicate an election-focused movement, the actual questions asked of the groups do raise some concerns. If accurate, they did seem to go beyond evidence that these organizations were primarily engaged in elections, such as questions about lobbying and the role of family members.

    But the reason these questions are complicated for the IRS, or for any agency assigned to police these complicated distinctions, is this: the line between robust political speech and influencing elections has become frightfully difficult to draw. Finding the right line around what is an “election” is really the fundamental problem in campaign finance. Almost everyone accepts the premise of “electoral exceptionalism” – elections are structured and require some particular rules, different from the rules that apply generally to political speech. The rule in most states that keeps campaigners 75 or 100 feet from the voting booths is the most obvious uncontroversial restriction on political speech, and there is broad acceptance of the idea that direct contributions to candidates and campaigns should be limited to prevent corruption and dependence. But what happens after that? What about outside spending that looks just like campaign spending? We used to think there was a clear distinction between “issue ads” that were expressing a view on an issue and “electioneering communications” that were the equivalent of campaign contributions. That distinction is actually what the Citizens United case was about -- the provision of the 2002 Bipartisan Campaign Reform Act that defined broadcast communications that mentioned a candidate within 30 days before a primary or 60 days before a general election as electioneering, which had to be financed with regulated funds.

    That was an improvised line then, and it’s gotten even blurrier since. Part of the problem is partisanship – it used to be, for example, that there were environmentalists in both parties, supporters of social spending in both parties. A political ad about the environment was just that. But what’s an ad or brochure attacking “Obamacare” during the election year? Every Republican opposes it, and they’ve given it the name of the president. The Tea Party was based on issues, yes, but above all else, it was based on unflagging, total opposition to Obama and congressional Democrats.

    To figure out where election advocacy begins and regular political speech ends in these cases was certainly more than mid-level IRS bureaucrats in Cincinnati could handle. But it’s not an easy challenge for anyone. All the noise about IRS “targeting” and about free speech and corporate speech is a distraction from a real challenge of money in elections: finding an agreement on the line around an “election,” and establishing some clear rules for what happens within that line in order to ensure that elections are fair and open and don’t lead to corruption. 

    Mark Schmitt is a Senior Fellow at the Roosevelt Institute.


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  • Now We Are Way Too Excited About Campaign Finance Skepticism

    May 13, 2013Mark Schmitt

    Some people overhyped the influence of money in the last election, but we shouldn't downplay the need for smart, effective reform.

    Some people overhyped the influence of money in the last election, but we shouldn't downplay the need for smart, effective reform.

    “We got way too excited over money in the 2012 elections,” my former colleague Ezra Klein said at a conference on inequality and politics at Yale last week, in remarks that he published as a column. A simple political science model for predicting the presidential election, which didn’t account for spending, nonetheless hit the results exactly; Citizens United didn’t unleash a torrent of corporate spending; and even in Senate races, big spending by Republican Super-PACs didn’t make much of a difference.

    The first question to ask is, “What do you mean ‘we’?” More than a few of us argued that Citizens United wouldn’t be a world-changer – if major corporations had wanted to take major risks in the electoral arena, there were already ways for them to do it. (It actually had more impact than I thought it would.) And it has long been the consensus in political science that once a candidate or campaign has reached a sufficient threshold to be heard and to be competitive, extra spending beyond that has diminishing returns, whether that spending is within the campaign or from outside groups. That is, you can be outspent 3:1 and win, as long as your 1 is enough to compete in that state. Many wealthy, self-financed candidates have learned that lesson the hard way. All presidential candidates and almost all major party Senate candidates have reached the threshold where additional spending for or against them matters very little. Many Super-PACs, predictably, did more for the political consultants who were collecting fees from them (typically 15 percent for broadcast ad buys) than for the candidates they were intended to support.

    There were ill-informed journalists, pundits, and advocates last year who made all sorts of claims about the impact money would have on the elections, but just because their predictions were predictably wrong doesn’t mean that “we got overexcited” or that we should stop being concerned about the influence of economic inequality on the political process. Money matters as a gatekeeper, for example: Many candidates, especially at the congressional or state legislative level, don’t have it and don’t know how to get it. It matters as a framer of the issues that are acceptable for debate – it’s not only money that gave the National Rifle Association the clout to block an amendment with massive majority support, but money helped. Money unquestionably shaped the Dodd-Frank financial reform legislation and might ultimately render it almost unenforceable. The life of a member of Congress without a very safe seat revolves almost entirely around money, as an article in the Boston Globe over the weekend showed. Newly elected Democrats were advised last fall to set aside four hours each day for “call time” to donors, more than they spend on any other activity and more than twice the time they spend with other constituents.

    If money doesn’t have such a direct impact on election outcomes, then why does it have these other impacts? Are members of Congress overexcited, too? Perhaps, but most often the reason that we don’t see the impact of money so directly in the endgame of presidential and Senate elections is that the candidates have already done whatever they need to do to reach the threshold of competitiveness. They’ve done the three fundraisers a week, the hundred phone calls a day; they’ve avoided the tough votes that would alienate supporters. If they hadn’t done those things, they wouldn’t be there, in what are, in effect, the finals.

    That’s why the key principle of reform is not to limit spending in the endgame, but to make it easier for candidates of all kinds to reach the threshold where they can compete, without spending all their time with major donors and without all the compromises that necessarily ensue. Trevor Potter and Bob Bauer, election lawyers for John McCain and Barack Obama, respectively, recently proposed what they called “A New Recipe for Election Reform,” which would “focus not on further restriction funding for political activity but rather on broadening avenues of citizen participation,” drawing on the experiences of states and localities with systems that encourage small donors. This is something I’ve been pushing for many years, and it has been gratifying to see a consensus build around the idea, especially as the state and local programs, such as New York City’s matching funds for small donations, have proven effective, stable, and constitutionally sound.

    But back to Ezra Klein – he’s skeptical of these approaches as well. Later in the week, he went on to argue that the Potter-Bauer approach of encouraging participation would backfire, because small donors are more likely to be driven by ideology and/or partisanship (two different things that are often conflated), and are at least as bad, and maybe worse, than big donors or corporate money. “Just as big money is corrupting, small money is polarizing. And it’s polarization that probably poses the bigger threat to American politics right now.” Ezra is right that some of the federal candidates who collected the most money from grassroots donations were the most ideologically extreme, such as defeated Rep. Allen West of Florida. But that’s looking at the extremes, not the middle tier of politics, where candidates struggle to find the base of donations to be heard. And there’s no evidence that small donor systems such as New York City’s, Connecticut’s, or Minnesota’s superb system of automatic, quick tax rebates for small contributions have made those jurisdictions more polarized. (Minnesota’s system has been unfunded since 2010.)

    This skepticism also reflects a quaint view of the role of big money and corporate money in politics. There was a time when corporations, through their PACs, tended to split their donations roughly 60-40 between parties, hedging their bets and mostly protecting useful incumbents. Or an industry might have Republican firms and Democratic firms. But in a polarized time (and partisan polarization reflects forces much bigger and more intractable than either money in politics or congressional procedures), corporations and major interests have moved more sharply to one side or the other. Most of the Wall Street firms, for example, moved toward the GOP, and the U.S. Chamber of Commerce, historically as cautiously solicitous of whichever party held power as possible, moved almost completely Republican. Secret vehicles, such as the Chamber’s 501(c)4 committee, allowed corporations such as Aetna to maintain the veneer of bipartisanship, while simultaneously putting millions of dollars behind one party. The most notorious Super-PACs of 2012, such as those that kept alive the candidacies of Newt Gingrich or Rick Santorum, or that targeted Senate Democrats, were at least as fiercely partisan as West’s donors.

    There is a challenge for reform: Can we encourage genuinely average voters, those who don’t watch Glenn Beck or Rachel Maddow, or read or Daily Kos, but who have preferences and views of their own, to put a few dollars behind congenial candidates? And can we boost those contributions with public financing that doesn’t have any “ask” attached to it? As we pursue the task that Potter and Bauer set out, to absorb the lessons of successful systems, this is one of the questions that we should be asking. Small donor financing won’t end partisanship or polarization by itself. But it can be a big part of a system that allows legislators to move more independently, develop new coalitions, and spend more time listening to constituents than lobbyists and donors.

    The role of money in politics has sometimes been overstated, but that doesn’t justify the fashionable cynicism about money and reform that seems to be infecting the wonk class. 

    Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

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  • The Case for Optimism About Campaign Finance Reform – With Scalia on the Bench

    Mar 4, 2013Mark Schmitt

    Current limits on money in politics being tested across the country should give reformers hope.

    Current limits on money in politics being tested across the country should give reformers hope.

    Last Monday, the Supreme Court declined to hear a case challenging the century-old ban on direct corporate contributions to federal election campaigns. That counts as good news in a month that included the court’s earlier decision to hear a case that challenges the aggregate contribution limits in campaign finance and Obama strategist David Axelrod declaring that he would prefer a system of unlimited contributions with full disclosure. Almost all Republicans, the Supreme Court, and a powerful faction of the Democratic Party now fall somewhere on the spectrum between skepticism and vehement opposition to limits on contributions. The flimsy remains of the post-Watergate system of campaign finance regulation are on the verge of collapse.

    Richard Hasen, law professor and proprietor of the indispensable Election Law Blog, argued in Slate last week that there was still hope for campaign finance reform – just not until Justice Antonin Scalia leaves the court. But there are other reforms currently being tested on the ground that hold out hope for changing the power of money in politics.

    Hasen is right, of course, that until at least one of the five members of the Citizens United majority leaves the court by death or retirement and is replaced by a Democratic appointee, the best hope is that it will rule narrowly in cases such as the one involving aggregate contribution limits, rather than using them as opportunities, as they did in Citizens United, to punch holes in the law that are bigger than the cases themselves. He’s also right that expecting a constitutional amendment to overturn Citizens United (or do various other things, depending on the version) is far less likely to reopen the path toward a reasonable balance of the role of money in politics than a change in the membership of the court.

    Hasen proposes that campaign finance reform advocates take the time now “to plan for the next Supreme Court.” We should use the indefinite waiting period to “think more about what a reasonable campaign finance regime would look like” and acknowledge that “conservatives are absolutely right that campaign finance laws can boost incumbents and stifle political competition.”

    I agree with Hasen on all of that, even the last points, but I’d go even further: A reasonable campaign finance regime, one that doesn’t boost incumbents or stifle competition, could even be put in place with the existing Supreme Court. (The current Congress is another story.) The thinking he’s proposing is going on right now, and is even being tested, in systems based on the principle of “small-donor public financing.” These systems use some combination of matching funds, tax credits, vouchers, or generous public financing for candidates who show a base of small-donor support. They make it easier for candidates to run who don’t have big-donor support in order to enhance public participation and to ensure that elected officials aren’t entirely dependent on big donors or corporations, whether those donors are giving directly to campaigns or to outside groups.

    The public financing systems in Arizona, Maine, and Connecticut, which have been resilient, strongly supported by the public, upheld in the courts, and used by almost as many Republicans as Democrats, fall into this category. So does the generous matching system in New York City that has the support of Governor Andrew Cuomo and a growing number of legislators, which can serve as a model for legislation elsewhere. So can Minnesota’s system, which is currently unfunded but which until a few years ago offered a quickly refundable tax credit for small contributions along with a match on the candidate side. All of these systems can be considered part of a broad experiment, and scholars are looking closely at them to see whether they change who runs for office, who donates, and ultimately whether the states’ political processes are more responsive to the public.

    Legislation at the federal level has followed the small-donor model as well. Rep. John Sarbanes’ Grassroots Democracy Act, for example, draws on elements from several of the successful state programs, including a refundable tax credit for small donors along with a matching program for campaigns. The Fair Elections Act similarly incorporates a combination of small donor incentives with full public financing. A voucher that would allow every citizen to contribute in the same way that she votes, long advocated by Yale Law Professor Bruce Ackerman who calls them “Patriot Dollars,” and more recently by his Harvard counterpart Lawrence Lessig, is attracting renewed interest as well.

    All these systems are voluntary, and alone they don’t go too far toward controlling big money, except for the candidates who participate. But they do make it possible for candidates to run who wouldn’t be able to otherwise or who want to run independently of big money. If they’re designed well, they can help candidates be in the position to get their messages out, and at a certain point it doesn’t matter all that much if the other candidate has a lot more money or more outside money spent on her behalf. (The Brennan Center put out an excellent report in 2011 on the many positive effects of small-donor public financing.)

    The big question is whether these systems can work without limits on outside money. Without limits, candidates might hesitate to participate, voluntarily limiting their own spending, if they worry about being overwhelmed by big outside campaigns. It’s also unlikely that the public will support throwing good money into a cesspool of unregulated spending for very long. If that’s the case, these systems will need backup from the kind of limits that are under challenge in the recent cases or rejected by the court in Citizens United or other cases. But even after the court rejected a feature of the Arizona system that gave candidates more money if they were attacked by outside money, the system survived, and a majority of candidates for statewide office in 2010 and 2012 participated in the system.

    The 2012 federal elections offered even more evidence that small-donor systems can work. It was not that “money doesn’t matter” (a view challenged by Roosevelt Institute Senior Fellow Thomas Ferguson and colleagues here), but rather that once a candidate for the House, Senate, or lower office has reached the threshold that allows him to be heard, extra money on the other side, whether from outside groups or the opposing campaign itself, matters less. For example, all the Senate candidates hit with outside spending by the Sheldon Adelson and Koch Brothers-funded groups won reelection. If small-donor public financing can get candidates to that threshold, then limits on outside spending won’t be as important in making the system work.

    That’s not to say that it isn’t worth trying to strengthen the limits that remain and to build on the broader consensus that supports disclosure. In particular, the Internal Revenue Service should enforce the law governing 501(c)(4) non-profits, which are increasingly being used as vehicles for undisclosed and unlimited campaign spending, but which are not permitted to have influencing elections as their “primary activity.” The sheer number of mechanisms by which a donor can try to influence the outcome of an election has proliferated so far beyond the old standby of broadcast advertising that it will be impossible to chase it all down.

    The next generation of campaign finance reform doesn’t have to be developed in a laboratory while waiting for Scalia or one of his colleagues to retire or to encounter a higher judge. It’s being designed, refined, tested, and improved as you read this in a half dozen states and municipalities. If it works, it will lead us to a system that will moderate the influence of economic inequality on democracy while enhancing competition and strengthening First Amendment rights of free expression. 

    Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

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  • This Year's State of the Union Was a Speech About Democracy

    Feb 13, 2013Mark Schmitt

    President Obama's message was a challenge to Congress to reengage in the democratic process.

    President Obama's message was a challenge to Congress to reengage in the democratic process.

    For anyone interested in revitalizing American democracy, the State of the Union didn't offer much in traditional terms. There was nothing comparable to President Obama's daring call-out of the Supreme Court in 2010 for its error in Citizens United. The closest we got to a specific democracy-related proposal was Obama’s announcement of a commission on voting to be chaired by his campaign lawyer, Bob Bauer, and the top Republican election lawyer, Ben Ginsberg, which will identify obstacles to voting and recommend “commonsense steps that state and local election officials can take,” according to the White House fact sheet.

    Election reform commissions don’t have a great history, but it’s refreshing to see one chaired by working election lawyers, who presumably know the score, rather than eminences grises such as Jimmy Carter and James Baker. Further, as Rick Hasen points out, Ginsberg’s name attached to any recommendations the commission produces gives it a real chance of gaining some Republican support. But the tone of the president’s proposals suggested that election problems like long lines are just some sort of natural phenomenon or sad accident rather than the result of partisan warfare over who can vote. And the commission is not charged with recommending national standards for voting and vote-counting, just recommendations to state and local officials.

    Still, much of the speech had a subtle subtext of reopening American democracy, from the presence of 102-year-old Desiline Victor of Florida, who stood in long lines twice last November before she was able to vote, to the insistence that the victims of gun violence and their families “deserve a vote” on his gun safety proposals. “Deserve a vote” is different from an insistence that Congress “pass this bill,” as Obama demanded when he introduced his job creation bill in 2011. It is a demand that the system simply work the way it’s supposed to – take up legislation and pass it, amend it, or reject it. Given that more than a few Democrats and Republicans would rather bottle up controversial legislation like a gun safety bill than cast recorded votes to be scored by the NRA, this is a significant challenge to the system.

    Similarly, in talking about the budget, Obama declared, “The greatest nation on Earth cannot keep conducting its business by drifting from one manufactured crisis to the next.” This can be seen as a throwaway line, but the “manufactured crises” of the recent budget deals, much like filibusters, have the effect of closing off democracy. There’s no debate or open deliberation, just a closed room where one side tries to force the hand of the other. And the result can be policies, like the budget sequester, that are not compromises, but actually deeply unpopular and unwise, because their only purpose is to win the next closed-door fight. Budget showdown politics create states of exception where democratic processes are set aside.

    Obama was implicitly calling for a return to a kind of normal order in the American democratic process. It will still be messy, and the results won’t be ideal, but it won’t be all about preventing people from voting, preventing votes on legislation, and creating crises to force showdowns. Obama presented even his broad economic agenda as an opening bid in a democratic process. He’s unlikely to get all of what he’s proposed, but if congressional Republicans take it up as minority parties have in the past – proposing amendments, voting against the parts they don’t like, and making the case against some or all of it – we’ll likely see some of it passed. This vision doesn’t require the Republican fever to break, as some have suggested. They will remain a deeply conservative party with an even more reactionary core demanding attention. But it will require them to rejoin the democratic process in the same spirit in which they sat mostly calmly and respectfully last night.

    Obama’s agenda has always had a strong dimension that was about democracy and the political process itself, in part because those are his instincts and in part because he desperately needs to reopen and reform the process before he can fully achieve the rest of his vision. To really change the process, though, Obama will have to be more explicit and fight harder for some specifics: not just a commission on electoral reform, but a push for national clarity about who can vote and how votes are counted. Not just a shot at the Supreme Court, but a sustained commitment to reduce the role of money in politics, from little changes, such as making the IRS enforce the law on 501(c)(4) non-profits, to a national effort to enact the kind of small-donor public financing that is effective in New York City and may soon be enacted at the state level. He may do more harm than good by meddling in congressional business, but his agenda – and any hope for progress in meeting our challenges – also requires a more open Senate, in which 41 Senators can’t decide what gets a chance to be heard.

    Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

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  • How Did "Fix the Debt" Become "Protect the Bush Tax Cuts"?

    Nov 27, 2012Mark Schmitt

    A group devoted to reducing the deficit shouldn't embrace the irresponsible tax cuts that created most of it.

    A group devoted to reducing the deficit shouldn't embrace the irresponsible tax cuts that created most of it.

    “Fix the Debt,” as you've probably noticed from the Internet ads that are now as ubiquitous as the old Netflix pop-ups, is the newest high-profile effort by Peter G. Peterson and allies to build a public movement for long-term deficit reduction. Fix the Debt appears to be an ambitious public relations and grassroots lobbying effort layered on top of the other major Peterson-funded anti-deficit groups, all of them pushing for a “grand bargain” on taxes and spending, ideally before the “fiscal cliff” (or what I prefer to call the “fiscal reset,” because it's a chance to start over and reconsider bad choices from the 2000s). These include the Committee for a Responsible Federal Budget, the Concord Coalition, the Comeback America Initiative (former Peterson Foundation president David Walker's new project), as well as groups such as the Business-Industry Political Action Committee.

    Although Fix the Debt's co-chairs are Alan Simpson and Erskine Bowles, of the failed Simpson-Bowles commission, the organization has no specific deficit reduction plan. Its basic principles are that debt reduction is urgent and that it should be “comprehensive.” “Everything should be on the table” is the closest thing to a motto. That compares favorably to the Republican attitude, circa 2011, that everything should be on the table except taxes. Fix the Debt has enlisted several prominent Democrats in addition to Bowles, notably former Pennsylvania governor Ed Rendell.

    So far, so good. No doubt the long-term budget gap needs to be narrowed and the ratio of debt to GDP stabilized, and it's better to chart that path sooner rather than make disruptive changes later. The evidence I see indicates that long-term fiscal stability is primarily a problem of system-wide health cost inflation and historically insufficient revenues – but that just affects my idea of a solution, not the long-term goal.

    But there's one exception: When it comes to taxes, Fix the Debt has a less open-minded position than it seems: Their “core principle” is “comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues, and reduces the deficit.” That could be okay, too – but everything depends on the baseline. If the Bush tax cuts are allowed to expire on January 2, in accordance with the law, then the next step would surely be to lower some of the rates that would come back into effect, principally for the middle class, and also to “broaden the base,” such as by bringing taxes on capital gains in line with other rates and thus eliminating the “carried interest loophole,” the “hedge fund loophole,” and all the others that play on that unwarranted tax preference. But that doesn't seem to be what Fix the Debt is thinking about. They seem to hold an unspoken core principle that the grand bargain must be achieved before the fiscal reset on January 2. That, in turn, implies that any deal would “lower rates” from the already very low tax rates of the Bush tax cuts. That's the essence, for example, of Fix The Debt leader Maya MacGuineas's Washington Post op-ed last week, which declared as a certainty that “Going over the cliff would be the worst possible outcome.”

    It's also the argument of a paper posted prominently on the website of MacGuineas's Commitee for a Responsible Federal Budget, which challenges a study by the congressional Joint Committee on Taxation showing just how difficult it would be to achieve all the goals of lowering tax rates, raising revenues, and reducing the deficit. CRFB claims that the Joint Tax Committee study erred by starting the exercise using the “current law baseline” – that is, assuming that all the Bush tax cuts would expire. From there, letting rates go back up will have already raised a lot of revenue, some loopholes will have already been narrowed (including the preference for investment income), and there will be some limits on deductions for high earners. CRFB insists that comprehensive tax reform is possible if and only if you begin with the “current policy baseline” – that is, assume the Bush tax cuts continue and work from there, or do the deal before the cuts expire. It's a very complicated argument, but what it comes down to is this: Letting the tax cuts expire by law would actually achieve many of the goals of tax reform, as I wrote in October. But if the tax reform is already half-completed, there's less room for classic tax reform in a grand bargain.

    And thus, Fix the Debt and its partners find themselves twisted in a knot. Because “comprehensive tax reform” is such a central component of their vision, they have to root for the Bush tax cuts, because there's not much room for reform otherwise. But supporting the Bush tax cuts, as a baseline, is not “fixing the debt.” It's the opposite, since the Bush tax cuts make up almost all of the long-term projected deficit, as this chart from the Center on Budget and Policy Priorities shows:

    It's also worth noting that Fix The Debt's approach to taxes is not the same as the Simpson-Bowles commission. Simpson-Bowles started from the assumption that the Bush tax cuts would expire. Insisting that the Bush tax cuts form the starting point for negotiations was the position, instead, of Mitt Romney, Paul Ryan (it was one reason he opposed Simpson-Bowles), and the current House Republicans.

    I'm not sure why Fix the Debt put itself in a position where it now seems more concerned with protecting the Bush tax cuts than actually reducing the long-term deficit. Maybe it's that the devotion to the fantasy of a grand bargain that includes something called “tax reform” drove them there. Maybe it's that it's necessary to maintain the nominal support from Republicans and business leaders that they boast. But whatever the cause, it's where they seem to be. And a group devoted to fiscal responsibility has no business protecting one of the two most irresponsible fiscal choices in recent history.

    Mark Schmitt is a Senior Fellow at the Roosevelt Institute.

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