Cancer of money

By ERNEST F. HOLLINGS, former U. S. senator

MAY 29, 2013 -- Robert Kaiser in the Washington Post (5/23/13) lists: "Three reasons Congress is broken."

1.) Politics trumps policy

2.) Staffers do most of the work

3.) Issues -- even the big ones are no longer really debated -- have developed a culture that is the problem in Congress.


Hollings

An excellent article but nothing's changed since I was elected to the Senate in 1966 when Republicans and Democrats worked together. We even limited spending in campaigns in 1973. But when the Supreme Court in Buckley v. Valeo reversed this law in 1976, we started raising money against each other and now are working against each other morning, noon and night. The cancer of money or the culture of fundraising causes the partisanship and prevents anything getting done.

Congress has tried to change this culture for 30 years: McCain Feingold, public financing, etc. but the Supreme Court has gotten worse and worse. It has even given unlimited spending in campaigns to corporations but not contributors. Only a Constitutional Amendment will permit the change. My Constitutional Amendment: "The Congress is empowered to regulate or control spending in federal elections" received a majority vote but not the 2/3 required for a Joint Resolution. The Governor's Conference called and wanted the States added. The amendment would be approved by the States. Congress refuses to amend because of -- money. Congress has six years for fundraising morning, noon and night. To be elected to the Senate in 1998, we raised $8.5 million. This factors out to $30,000 a week, every week, for six years. It would take millions more today but Congress doesn't want to lose its advantage.

Lobbyists have taken over the government -- ergo the gun control vote. Lobbyists don't work through the Leader or Speaker today. They wheel and deal amongst each other, fix the vote long before the Roll is called. In fact, they tell the Leader when to call the Roll. Lyndon Johnson couldn't lead the Senate today.

When you limit spending, you limit the control of government by the lobbyists; you limit the time to fundraise; you have time to debate and do your work; you limit the campaigns. Fundraising against each other is limited so as to eliminate the partisan Congress.

The lead article in the Sunday Review, NY Times (5/26/13) is headlined: "The American Corp-tax system is terribly flawed." And the lead editorial concludes: "Global Corporations present difficult issues for which there are no easy answers." Amending the Constitution will take time but there is an easy answer: cut taxes by eliminating the 35 percent Corporate Tax and replace it with a 7 percent Value Added Tax. 150 countries compete in globalization with a VAT that's rebated on exports. The Corporate Tax is not rebated. Not having a VAT is killing manufacture in the United States. An entrepreneur in the U.S. can be making a profit but has to pay the 35 percent Corporate Tax and another 17 percent VAT tax when his exports reach China. A competitor can produce the same product in China, import the product tax free and put the entrepreneur out of business.

"The cancer of money or the culture of fundraising causes the partisanship and prevents anything getting done."

-- Hollings

Wall Street, the big banks and Corporate America want to keep the China profits flowing so they oppose a VAT. The multinationals are not paying much tax -- only Main Street or small business pays the full 35 percent. To keep the market up and not increase the cost of their imports 7 percent, Corporate America keeps building China's economy and opposes building ours. But the duty of the President and Congress is to attract industry and build a strong economy. Every Governor knows how to build a strong economy but the President and Congress refuse to do their duty. They refuse to enact the VAT tax cut and enforce trade laws to protect production against predatory practices. Why? Money! Wall Street, the big banks and Corporate America are their biggest contributors, and they contribute to the President and Congress to do nothing. The President and Congress do nothing.

Eliminating the Corporate Tax will immediately release $2 trillion in offshore profits for Corporate America to repatriate tax free and create millions of jobs - jumpstart the economy. Closing all loopholes gives instant tax reform. The 35 percent Corporate Tax is estimated by CBO to produce $236.8 billion in revenues for 2012. A 7 percent VAT for last year would have produced $922 billion in revenues. We can balance the budget in two years rather than these ten year plans that never balance. But this doesn't happen because the American people think they have a strong economy because of- money. The market keeps going up.

The U.S. is going out of business and nobody cares.

Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of Making Government Work (University of South Carolina Press, 2008).

© 2013, Ernest F. Hollings. All rights reserved. Contact us for republication permission.

About Fritz Hollings

Ernest F. Hollings served the public for 56 years -- 38 years in the United States Senate and as South Carolina's governor, lieutenant governor and a member of the S.C. House of Representatives.

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