CREW Releases New Report Examining the Influence of High Frequency Traders in Washington
Source: Citizens for Responsibility and Ethics in Washington (CREW)
Today, Citizens for Responsibility and Ethics in Washington (CREW) released a new report, Rise of the Machines, detailing the growing political influence of high frequency traders in the nation’s capital. High frequency trading, a complicated and controversial method of securities trading, has begun drawing scrutiny from government regulators, prompting skyrocketing lobbying spending and campaign contributions by the industry.
CREW studied the lobbying and campaign contribution records of 48 companies that specialize in high frequency trading. Between the 2008 and 2012 election cycles, these firms’ campaign contributions soared by a staggering 673 percent, up from $2.1 million during the 2008 election cycle to $16.1 million during the 2012 cycle. Over this time period, these firms contributed more than $21 million to federal candidates, party committees, PACs, and super PACs.
Additionally, since 2008, these firms have spent more than $10 million lobbying Congress, the Securities and Exchange Commission, and the Commodity Futures Trading Commission. These companies’ total lobbying spending jumped 93 percent between 2008 and 2012, from $1.4 million to $2.7 million. The biggest single-year increase came between 2009 and 2010, while Congress debated heavily lobbied provisions of what would eventually become the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Treasury Inspector General for Tax Administraion — Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review
Inappropriate Criteria Were Used to Identify Tax-Exempt Applications for Review (PDF)
Source: Treasury Inspector General for Tax Administration\
IMPACT ON TAXPAYERS
Early in Calendar Year 2010, the IRS began using inappropriate criteria to identify organizations applying for tax-exempt status to review for indications of significant political campaign intervention. Although the IRS has taken some action, it will need to do more so that the public has reasonable assurance that applications are processed without unreasonable delay in a fair and impartial manner in the future.
WHY TIGTA DID THE AUDIT
TIGTA initiated this audit based on concerns expressed by members of Congress. The overall objective of this audit was to determine whether allegations were founded that the IRS: 1) targeted specific groups applying for tax-exempt status, 2) delayed processing of targeted groups’ applications, and 3) requested unnecessary information from targeted groups.
WHAT TIGTA FOUND
The IRS used inappropriate criteria that identified for review Tea Party and other organizations applying for tax-exempt status based upon their names or policy positions instead of indications of potential political campaign intervention. Ineffective management: 1) allowed inappropriate criteria to be developed and stay in place for more than 18 months, 2) resulted in substantial delays in processing certain applications, and 3) allowed unnecessary information requests to be issued.
Although the processing of some applications with potential significant political campaign intervention was started soon after receipt, no work was completed on the majority of these applications for 13 months. This was due to delays in receiving assistance from the Exempt Organizations function Headquarters office. For the 296 total political campaign intervention applications TIGTA reviewed as of December 17, 2012, 108 had been approved, 28 were withdrawn by the applicant, none had been denied, and 160 were open from 206 to 1,138 calendar days (some for more than three years and crossing two election cycles).
More than 20 months after the initial case was identified, processing the cases began in earnest. Many organizations received requests for additional information from the IRS that included unnecessary, burdensome questions (e.g., lists of past and future donors). The IRS later informed some organizations that they did not need to provide previously requested information. IRS officials stated that any donor information received in response to a request from its Determinations Unit was later destroyed.
WHAT TIGTA RECOMMENDED
TIGTA recommended that the IRS finalize the interim actions taken, better document the reasons why applications potentially involving political campaign intervention are chosen for review, develop a process to track requests for assistance, finalize and publish guidance, develop and provide training to employees before each election cycle, expeditiously resolve remaining political campaign intervention cases (some of which have been in process for three years), and request that social welfare activity guidance be developed by the Department of the Treasury.
In their response to the report, IRS officials agreed with seven of our nine recommendations and proposed alternative corrective actions for two of our recommendations. TIGTA does not agree that the alternative corrective actions will accomplish the intent of the recommendations and continues to believe that the IRS should better document the reasons why applications potentially involving political campaign intervention are chosen for review and finalize and publish guidance.
Source: Cato Institute
Three years ago the U.S. Supreme Court decided the case of Citizens United v. Federal Election Commission. It found that Congress lacked the power to prohibit independent spending on electoral speech by corporations. A later lower-court decision, SpeechNow v. Federal Election Commission, applied Citizens United to such spending and related fundraising by individuals. Concerns about the putative political and electoral consequences of the Citizens United decision have fostered several proposals to amend the Constitution. Most simply propose giving Congress unchecked new power over spending on political speech, power that will be certainly abused. The old and new public purposes cited for restricting political spending and speech (preventing corruption, restoring equality, and others) are not persuasive in general and do not justify the breadth of power granted under these amendments.
Civic Engagement in the Digital Age
Source: Pew Internet & American Life Project
Social networking sites have grown more important in recent years as a venue for political involvement, learning, and debate. Overall, 39% of all American adults took part in some sort of political activity on a social networking site during the 2012 campaign.
This means that more Americans are now politically active on social networking sites (SNS) than used them at all as recently as the 2008 election campaign. At that point, 26% of the population used a social networking site of any kind.
The growth in several specific behaviors between 2008 and 2012 illustrates the increasing importance of SNS as places where citizens can connect with political causes and issues:
- In 2012, 17% of all adults posted links to political stories or articles on social networking sites, and 19% posted other types of political content. That is a six-fold increase from the 3% of adults who posted political stories or links on these sites in 2008.
- In 2012, 12% of all adults followed or friended a political candidate or other political figure on a social networking site, and 12% belonged to a group on a social networking site involved in advancing a political or social issue. That is a four-fold increase from the 3% of adults who took part in these behaviors in 2008.
Immigration — Detailed Review of the 2013 Senate Legislation and Side-by-Side Comparison with 2006, 2007 Senate Bills
Source: Migration Policy Institute
This issue brief offers a detailed review of major provisions included in S.744, the immigration legislation introduced in the Senate by a bipartisan group of senators, and compares those provisions with bills considered by the Senate in 2006 and 2007. Topics reviewed include border security and enforcement; creation of Registered Provisional Immigrant (RPI) status for unauthorized immigrants, the DREAM Act, agricultural workers program, and paths to lawful permanent residence; immigrant integration; creation of a new merit-based visa and adjustments to preference categories for family- and employment-based immigration; employment verification, detention and immigration court provisions, and more.
Source: Congressional Research Service (via U.S. Department of State Foreign Press Office)
The Constitution requires a count of the U.S. population every 10 years. Based on the census, the number of seats in the House of Representatives is reapportioned among the states. Thus, at least every 10 years, in response to changes in the number of Representatives apportioned to it or to shifts in its population, each state is required to draw new boundaries for its congressional districts. Although each state has its own process for redistricting, congressional districts must conform to a number of constitutional and federal statutory standards, including the Voting Rights Act (VRA) of 1965.
The VRA was enacted under Congress’s authority to enforce the 15th Amendment, which provides that the right of citizens to vote shall not be denied or abridged on account of race, color, or previous servitude. Section 2 of the VRA prohibits the use of any voting qualification or practice—including the drawing of congressional redistricting plans—that results in the denial or abridgement of the right to vote based on race, color, or membership in a language minority. The statute further provides that a violation is established if, based on the totality of circumstances, it is shown that political processes are not equally open to members of a racial or language minority group in that its members have less opportunity than other members of the electorate to participate and to elect representatives of choice. In decisions including Thornburg v. Gingles and Bartlett v. Strickland, the Supreme Court further interpreted the requirements of Section 2.
Section 5 of the VRA requires certain covered jurisdictions—based on a formula set forth in Section 4(b)—to “preclear” their congressional redistricting plans with either the Department of Justice or the U.S. District Court for the District of Columbia before implementation. In order to be granted preclearance, the covered jurisdiction has the burden of proving that the proposed voting change neither has the purpose, nor will it have the effect, of denying or abridging the right to vote on account of race or color, or membership in a language minority group. On February 27, 2013, the U.S. Supreme Court heard oral argument in a case challenging the constitutionality of the VRA’s preclearance requirement. In Shelby County, Alabama v. Holder, the Court is considering whether Congress’s decision in 2006 to reauthorize Section 5 of the VRA under the preexisting coverage formula contained in Section 4(b) exceeded its authority under the 14th and 15th Amendments, thereby violating the 10th Amendment and Article IV of the U.S. Constitution. A decision is expected by the end of June.
In the 113th Congress, legislation has been introduced that would establish certain standards and requirements for congressional redistricting, including identical bills H.R. 223 and H.R. 278, the “John Tanner Fairness and Independence in Redistricting Act,” and H.R. 337, the “Redistricting Transparency Act of 2013.”
New GAO Statement
Source: Government Accountability Office
1. Voters with Disabilities: Challenges to Voting Accessibility, by Barbara Bovbjerg, managing director, education, workforce, and income security, before the National Council on Disability. GAO-13-538SP, April 23. http://www.gao.gov/products/GAO-13-538SP
Highlights – http://www.gao.gov/assets/660/654098.pdf
Source: Congressional Research Service (via U.S. State Department Foreign Press Center)
“Sequestration” is a process of automatic, largely across-the-board spending reductions under which budgetary resources are permanently canceled to enforce certain budget policy goals. It was first authorized by the Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, Title II of P.L. 99-177, commonly known as the Gramm-Rudman-Hollings Act).
Sequestration is of current interest because it has been triggered as an enforcement tool under the Budget Control Act of 2011 (BCA, P.L. 112-25). Sequestration can also occur under the Statutory Pay-As-You-Go Act of 2010 (Statutory PAYGO, Title I of P.L. 111-139). In either case, certain programs are exempt from sequestration, and special rules govern the effects of sequestration on others. Most of these provisions are found in Sections 255 and 256 of BBEDCA, as amended. Two provisions were included in the BCA that could result in automatic sequestration:
• Establishment of discretionary spending limits, or caps, for each of FY2012- FY2021. If Congress appropriates more than allowed under these limits in any given year, sequestration would cancel the excess amount.
• Failure of Congress to enact legislation developed by a Joint Select Committee on Deficit Reduction, by January 15, 2012, to reduce the deficit by at least $1.2 trillion. The BCA provided that such failure would trigger a series of automatic spending reductions, including sequestration of mandatory spending in each of FY2013-FY2021, a one-year sequestration of discretionary spending for FY2013, and lower discretionary spending limits for each of FY2014-FY2021.
In fact, the Joint Committee did not develop the necessary legislation and Congress did not meet the January 15, 2012, deadline. Thus, automatic spending cuts under the BCA were triggered, with the first originally scheduled for January 2, 2013. P.L. 112-240 subsequently delayed this until March 1, 2013, and President Obama signed a sequestration order on that date.
Under the Statutory PAYGO Act, sequestration is part of a budget enforcement mechanism that is intended to prevent enactment of mandatory spending and revenue legislation that would increase the federal deficit. This act requires the Office of Management and Budget (OMB) to track costs and savings associated with enacted legislation and to determine at the end of each congressional session if net total costs exceed net total savings. If so, a sequestration will be triggered.
Under sequestration—triggered either by the BCA or Statutory PAYGO Act—the exemptions and special rules of Sections 255 and 256 of BBEDCA apply. Most exempt programs are mandatory, and include Social Security and Medicaid; refundable tax credits to individuals; and low-income programs such as the Children’s Health Insurance Program, Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, and Supplemental Security Income. Some discretionary programs also are exempt, notably all programs administered by the Department of Veterans Affairs. Also, subject to notification of Congress by the President, military personnel accounts may either be exempt or reduced by a lower percentage.
Special rules also apply to several, primarily mandatory, programs. For example, under Section 256 of BBEDCA, Medicare may not be sequestered by more than 4%. However, under a BCA- triggered sequester, reduction of Medicare is limited to no more than 2%.
New GAO Reports
Source: Government Accountability Office
1. Foreclosure Review: Lessons Learned Could Enhance Continuing Reviews and Activities under Amended Consent Orders. GAO-13-277, March 26.
Highlights – http://www.gao.gov/assets/660/653328.pdf
Podcast – http://www.gao.gov/multimedia/podcasts/653179
2. Political Intelligence: Financial Market Value of Government Information Hinges on Materiality and Timing. GAO-13-389, April 4.
Highlights – http://www.gao.gov/assets/660/653533.pdf
3. Information Sharing: Agencies Could Better Coordinate to Reduce Overlap in Field-Based Activities. GAO-13-471, April 4.
Highlights – http://www.gao.gov/assets/660/653526.pdf
Source: Open Secrets
Over the past several years, both spending on lobbying and the number of active lobbyists has declined. A number of factors may be responsible, including the lackluster economy, a gridlocked Congress and changes in lobbying rules.
CRP finds that the biggest players in the influence game — lobbying clients across nearly all sectors — increased spending over the last five years. The top 100 lobbying firms income declined only 6 percent between 2007 and 2012 but the number of registered lobbyists dropped by 25 percent.
The more precipitous drop in the number of lobbyists is likely due to changes in the rules. More than 46 percent of lobbyists who were active in 2011 but not in 2012 continue to work for the same employers, suggesting that many have simply avoided the reporting limits while still contributing to lobbying efforts.
Whatever the cause, it is important to understand whether the same activity continues apace with less disclosure and to strengthen the disclosure regimen to ensure that it is clear, enforceable — and enforced. If there is a general sense that the rules don’t matter, there could be erosion to disclosure and a sense that this is an "honor system" that isn’t being honored any longer. This is important because, if people who are in fact lobbying do not register, citizens will be unable to understand the forces at work in shaping federal policy, and therefore can’t effectively participate in policy debates and counter proposals that are not in their interest. At a minimum, the Center for Responsive Politics will continue to aggregate, publish and scrutinize the data that is being reported, in order to explain trends in disclosure — or its omission.
Source: Congressional Research Service (via Federation of American Scientists)
Secret, or closed, sessions of the House and Senate exclude the press and the public. They may be held for matters deemed to require confidentiality and secrecy—such as national security, sensitive communications received from the President, and Senate deliberations during impeachment trials. Although Members usually seek advance agreement for going into secret session, any Member of Congress may request a secret session without notice. When the House or Senate goes into secret session, its chamber and galleries are cleared of everyone except Members and officers and employees specified in the rules or designated by the presiding officer as essential to the session. After the chamber is cleared, its doors are closed.
Authority for the House and Senate to hold secret sessions appears in Article I, Section 5, of the Constitution: “Each House may determine the Rules of its Proceedings…. Each House shall keep a Journal of its Proceedings, and from time to time publish the same, excepting such Parts as may in their judgment require Secrecy…. ” Both chambers have implemented these constitutional provisions through rules and precedents.
In the House, Rule XVII, clause 9, governs secret sessions, including the types of business to be considered behind closed doors. In addition, House Rule X, clause 11 authorizes the House Permanent Select Committee on Intelligence to bring before the House material to help it determine whether classified material held by the committee should be made public.
In the Senate, under Senate Rule XXI, the presiding officer exercises no discretion about going into secret session. Any Senator may make a motion that the Senate go into closed session, and, if seconded, the Senate will immediately proceed into a secret session. Once in a secret session, the Senate operates under applicable portions of Senate Rules XXIX and XXXI.
The Senate met in secret until 1794, its first rules reflecting a belief that the body’s various special roles, including providing advice and consent to the executive branch, compelled it to conduct its business behind closed doors. Since 1929, when the Senate began debating nominations and treaties (referred to as executive business) in open session, the Senate has held 56 secret sessions, generally for reasons of national security or for consideration of impeachment proceedings.
The House met frequently in secret session through the end of the War of 1812, mainly to receive confidential communications from the President, but occasionally for routine legislative business. Subsequent secret meetings were held in 1825 and in 1830. Since 1830, the House has met behind closed doors four times: in 1979, 1980, 1983, and 2008.
A chamber’s rules apply during a secret session. The proceedings of a secret session are not published unless the relevant chamber votes, during the meeting or at a later time, to release them. Then, those portions released are printed in the Congressional Record.
This report will be updated as events warrant.
Source: Congressional Research Service (via Federation of American Scientists)
A bill is subject to amendment as soon as the Senate begins to consider it. Committee amendments are considered first; then Senators can offer amendments to any part of the bill, generally, in any order. Senators may debate each amendment without limit unless the Senate (1) agrees to a motion to table (kill) the amendment, (2) agrees to a unanimous consent request to limit debate on the amendment, or (3) invokes cloture, limiting debate on the amendment or on the bill and all amendments to it.
There are several different types of amendments. A first degree amendment proposes to change the text of the bill; a second degree amendment proposes to change the text of a first degree amendment that the Senate is considering. Third degree amendments are not allowed. An amendment may propose to strike out language from a bill (or a first degree amendment), to insert new language, or to replace language by striking out and inserting. In general, an amendment that proposes to replace the entire text of a bill is known as an amendment in the nature of a substitute; an amendment to replace the entire text of a first degree amendment is known as a substitute amendment. An amendment, especially in the second degree, that makes some lesser change is known as a perfecting amendment.
Depending on the kinds of amendments that Senators offer and the order in which they are recognized to offer their amendments, Senators can offer anywhere from three to 11 amendments before the Senate has to vote on any of them. “Amendment trees” are the graphic ways of depicting these possible situations.
The Senate only requires that amendments be germane when amendments are offered (1) to general appropriations bills and budget measures, (2) under cloture, or (3) under certain unanimous consent agreements and certain statutes. Otherwise, Senators can offer amendments on any subject to any bill. There are several general restrictions on the amending process. For example, it is not in order to propose an amendment that proposes only to amend language in a bill that already has been amended. However, it is possible to re-amend that language in the process of amending a larger portion of the bill. There also are special provisions in Senate rules to limit amendments to appropriations bills if those amendments propose unauthorized appropriations or changes in existing law. The Senate can, and sometimes does, choose not to enforce these restrictions.
The Senator who has offered an amendment may withdraw or modify it at any time until the Senate has taken some action on it, such as by amending it or by ordering a rollcall vote on it. Senators also may demand that certain amendments be divided into two or more parts. A rollcall vote on an amendment is ordered at the request of at least eleven Senators. The Senate’s amending process changes under cloture. For example, no amendment can be offered under cloture unless a Senator submitted it in writing before the cloture vote occurred.
This report will be updated as events warrant.
Source: Congressional Research Service (via Federation of American Scientists)
This report identifies the most commonly used motions and requests available to Members during proceedings in the House of Representatives. It does not identify motions and requests used when the House is in the Committee of the Whole House on the State of the Union. (See CRS Report RL32200, Debate, Motions, and Other Actions in the Committee of the Whole, by Bill Heniff Jr. and Elizabeth Rybicki. For a discussion of motions and requests used in committees see CRS Report RS20308, House Committee Markups: Commonly Used Motions and Requests, by Judy Schneider.)
The report divides the motions and requests into seven broad categories, based on when the motion or request is in order and who can make the motion or request. “Daily Business” is the category that includes items that are routine to the conduct of business in the House each day, such as the motion to adjourn. “Decorum and Privilege” covers issues of the rights and privileges of Members and the House and how Members conduct themselves on the floor. In “Parliamentary Tools,” motions and requests are identified that Members may use to get information about the parliamentary situation or to object to the pending proposal. “Proceedings on Legislation” includes motions and requests available to Members that are related to bringing up and considering legislation. “Closing Debate and Voting” identifies motions and requests used to bring debate to a close and obtain a vote. “Commit, Recommit, Refer” looks at the motions and requests used to send a bill to committee. Finally, “Resolving Differences” identifies motions and requests used to facilitate amendments between the chambers or to set up a conference between the chambers on differing versions of legislation.
This report will be updated as needed.