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Kansas Republicans Sour on Their Tax-Cut Experiment

It was only two months ago that Governor Sam Brownback was offering up the steep tax cuts he enacted in Kansas as a model for President Trump to follow. Yet by the time Republicans in Congress get around to tax reform, Brownback’s fiscal plan could be history—and it’ll be his own party that kills it.

The GOP-controlled legislature in Kansas nearly reversed the conservative governor’s tax cuts on Tuesday, as a coalition of Democrats and newly-elected centrist Republicans came within a few votes of overriding Brownback’s veto of legislation to raise income-tax rates and eliminate an exemption for small businesses that blew an enormous hole in the state’s budget. Brownback’s tax cuts survive for now, but lawmakers and political observers view the surprising votes in the state House and Senate as a strong sign that the five-year-old policy will be substantially erased in a final budget deal this spring. Kansas legislators must close a $346 million deficit by June, and years of borrowing and quick fixes have left them with few remaining options aside from tax hikes or deep spending cuts to education that could be challenged in court. The tax bill would have raised revenues by more than $1 billion over two years.

The Brownback blowback has been a long time coming. Though he won reelection in 2014, the governor has presided over one budget mess after another since then, and all but his staunchest conservative allies have blamed the crisis on reductions in personal tax rates and a provision that exempted 330,000 owners of small businesses from paying income taxes. Brownback has resisted efforts to undo the policies, preferring instead to raise taxes on tobacco, fuel, and other consumer goods. His relationship with Republicans in the legislature deteriorated, and in primary and general elections last year, a wave of Democrats and centrist Republicans defeated many of the conservatives who had stood by him.

The GOP may retain a majority in both chambers, but Brownback most definitely does not. “What we’re having is a standoff with the governor holding on to the old days where he had all these people elected,” said Senator Barbara Bollier, a moderate Republican who voters promoted from the state House last year. “They aren’t there anymore, and he can’t let go and follow the will of the people.”

As for Brownback’s legacy, Bollier said: “It’s going down in flames.”

The governor has fiercely defended the tax cuts, arguing that they stimulated job creation while it was the decline in oil and agriculture prices—the “rural recession,” as he calls it—that caused the budget shortfall. “They worked!” Brownback told my colleague Emma Green at the D.C. March for Life last month when she asked if he regretted signing the tax policies in 2011 and 2012. “The target of the tax cuts was job creation and new business formation. That was the target. And that it has done,” the governor said. “We’ve had record new business filings in Kansas and we hit record employment last year in spite of a commodity crisis.”

“The left media lies about the tax cuts all the time,” Brownback added. (His critics note that Kansas still lagged behind all but five other states in job growth last year.)

But it’s no longer merely journalists or even elected Democrats who criticize the governor in Kansas. Many Republicans have turned on him, too. When I spoke to Bollier and another GOP state lawmaker, Representative Stephanie Clayton, by phone on Thursday, both of them brought up the governor’s unpopularity without prompting. “The people can’t stand him here,” Clayton told me.

The backlash against Brownback is extending far beyond tax policy. The Kansas House this week passed bills to restore teacher tenure and expand Medicaid, and it blocked an amendment to deprive state funds to Planned Parenthood—a longtime target of the governor and other conservatives. The measures still face hurdles making it into law, but their approval by wide margins in a chamber controlled by Republicans illustrates just how much the political terrain has shifted away from the staunch conservatives who won decisive victories in 2010 and 2012. “All of those had been way off the agenda for the last four years,” said Burdett Loomis, a political scientist at the University of Kansas. “Basically the far right had controlled the legislature for the last four years, and now it’s back to a moderate Republican-Democratic coalition, which is the way it operated in the ’80s, the ’90s and into the 2000s.”

The stakes for Brownback’s fiscal policy were always high, because the governor himself had set them there. The original tax plan, he said, was a “real live experiment” in conservative fiscal policy—the kind small-government Republicans in Washington had dreamed about but had never fully implemented. The goal in Kansas was to phase out the income tax entirely over time in favor of levies on consumption. As revenues shrunk, so, too, would the size of government.

But the revenues dropped immediately, and dramatically—much faster than legislators could, or would want to, cut spending. The income tax had accounted for 50 percent of the state’s revenue, said Haley Pollock of the group Kansas Action for Children, which is part of a coalition pushing to reverse Brownback’s tax cuts. “When his tax plan went into effect, there was an immediate structural revenue imbalance,” she said. What followed were nine rounds of budget cuts over four years, three credit downgrades, missed state payments, and an ongoing atmosphere of fiscal crisis. “It’s really hard to argue that the income tax cuts weren't the source of our problems when most of our problems started at the same time that they took effect,” Pollock said.

Voters began to take notice, particularly when the budget ax fell on core state functions like education and the upkeep of roads and bridges. They reelected Brownback after a stiff challenge in 2014, but rank-and-file Republicans rebuked him by ousting his legislative allies two years later. “All of a sudden they realize, ‘Well you know what? We want government,’” Clayton told me. “People in Kansas tend to want the trains to run on time, proverbially. And they're not, because we cut too much.”

With encouragement from Trump, Republicans in Congress are drafting the most far-reaching tax reform in 30 years, built around cutting rates for individuals and businesses. Party leaders insist, as Brownback did, that the tax cuts will pay for themselves through larger economic growth. But Democrats and many economists say the plan would explode a deficit that’s already trending back up toward $1 trillion.

There’s a lesson in the Kansas experience, Clayton said, for Republicans in Washington, where the party has built a majority in the U.S. House that has, because of gerrymandering and poor Democratic turnout, seemed impenetrable. “The real example here is that the voters will get angry with you, and it doesn’t matter how solid-red your state is,” Clayton said. “If your voters get angry, then they will throw you out. And if you don’t run government functionally, they will go to the polls and get rid of you.”

Emma Green contributed reporting.

Kansas Republicans Sour on Their Tax-Cut Experiment 2017-02-24T21:39:02+00:00

When Does Contact Between the FBI and the White House Cross the Line?

The White House’s admission that it asked the Federal Bureau of Investigation to publicly dispute stories in the New York Times describing contacts between the Trump campaign and Russian officials raises serious ethical questions, according to former Justice Department officials.

"It's quite inappropriate for anyone from the White House to have a contact with the FBI about a pending criminal investigation, that has been an established rule of the road, probably since Watergate," said Michael Bromwich, a former Department of Justice inspector general and director of the  Bureau of Ocean Energy Management under Obama. "When I was in the Department in the ‘90s, that was well understood to be an inviolable rule."

CNN reported on Thursday that the FBI had rejected a request from White House Chief of Staff Reince Priebus to “publicly knock down media reports about communications between Donald Trump's associates and Russians known to US intelligence during the 2016 presidential campaign.” That communication would appear to violate ethical guidelines in place in one form or another since the Watergate Scandal, which led to the resignation of President Richard Nixon over his role in the coverup of the burglary of Democratic National Committee headquarters by Nixon operatives. Nixon had sought to block the FBI’s investigation into the break-in.

According to the latest version of those standards, issued in 2009 by then-Attorney General Eric Holder, “the Justice Department will advise the White House concerning pending or contemplated criminal or civil investigations or cases when-but only when-it is important for the performance of the President's duties and appropriate from a law enforcement perspective.”

There is an exception for when officials in public-affairs offices must communicate to, for example, prepare for an announcement in a big case: “This policy does not, however, prevent officials in the communications, public affairs, or press offices of the White House and the Department of Justice from communicating with each other to coordinate efforts.”

That exception would not appear to apply to a conversation between Priebus, the White House chief of staff, and Andrew McCabe, the FBI’s deputy director––or to a conversation touching on the substance of an investigation.

"The policy channels these communications through the White House counsel's office, which is the appropriate place, the White House counsel is a lawyer and knows how to handle these communications without interfering with ongoing investigations," said Amy Jeffress, a former counselor to the attorney general for national security and international matters. "It's important for the Department of Justice to be able to conduct investigations without political interference."

White House officials claim it was the FBI which first approached them on the matter. According to the Associated Press, “White House officials said it was the FBI that first raised concerns about the Times reporting but told Priebus the bureau could not weigh in publicly on the matter. The officials said McCabe and Comey instead gave Priebus the go-ahead to discredit the story publicly, something the FBI has not confirmed.” But that account raises further questions.

Responding to questions from the press on Friday, White House Press Secretary Sean Spicer confirmed the contacts on the record.

“We literally responded to what they came to us with and said, ‘OK, what are you going to do about it?” said Spicer. “Had we not done anything and just sat there, it would have been irresponsible and frankly malpractice.”

Bromwich said there was little doubt that the communications described by the White House in a briefing to reporters Friday morning constituted “inappropriate contact.”

"You don't want to have any political influence of any kind, any high level political influence, on any potential criminal investigation," said Bromwich. "It's inappropriate contact, and the reason those contacts are prohibited is because there is a risk of influence, or at a minimum, the risk of the appearance of influence, and so they are improper. There's really no gray area on this."

The administration’s account of the exchange also raises questions about the FBI’s conduct, because the White House claims that it was the FBI that raised the issue of The New York Times story. Speaking to The Guardian, former FBI Agent Mike German said that “It is illegal for an FBI employee to take information from an ongoing criminal investigation and share it with a potential witness or subject of that investigation. Obviously, if the justice department ultimately initiates a prosecution in this matter, this purported conversation would be exculpating evidence.”

In late October, FBI Director James Comey announced publicly that the bureau was looking into potentially new emails related to an investigation into Democratic presidential nominee Hillary Clinton. That search turned out to be fruitless, but the revelations, coming at the tail end of the presidential campaign, are widely believed to have affected the outcome of the 2016 election. The FBI’s conduct in that incident is currently under investigation by the FBI’s inspector general. Comey’s announcement also may have violated FBI guidelines against public disclosures that could impact a candidate close to an election.

"Just as it's inappropriate for anyone in the White House to reach out to the FBI comment on a pending criminal investigation, it's similarly inappropriate for anyone in the FBI to reach out to the White House to comment on a pending criminal investigation," said Bromwich. He added however, that there were reasons to doubt the administration’s account of events.

“The FBI knows the rules and is being circumspect and not commenting, the White House knows the FBI will be circumspect and not commenting, so theirs is the only story out there," Browmwich said. "I would be surprised that a top FBI official would broach a conversation of this sort."

When Does Contact Between the FBI and the White House Cross the Line? 2017-02-24T21:39:01+00:00

Virtual Reality Is a Hit In The News

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Virtual Reality Is a Hit In The News 2016-08-19T10:02:16+00:00

8 Ways VR Is Used For Video Games

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8 Ways VR Is Used For Video Games 2016-08-18T16:23:10+00:00

What Does Augmented Virtual Reality Mean

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What Does Augmented Virtual Reality Mean 2016-08-17T09:57:47+00:00

How Will Virtual Reality Change Us?

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How Will Virtual Reality Change Us? 2016-07-09T15:19:33+00:00

Virtual Reality Is Now Here, Be Ready

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Virtual Reality Is Now Here, Be Ready 2016-07-01T15:19:34+00:00

Trump's First Month

Robert Bernard Reich is an American politician, academic, writer, and political commentator. You might want to send this to anyone in

Trump's First Month 2015-10-11T16:53:37+00:00

Trump’s First Month

Robert Bernard Reich is an American politician, academic, writer, and political commentator. You might want to send this to anyone in

Trump’s First Month 2017-03-02T02:55:08+00:00