Joan clued you in on Friday about the roots of Catfood Commissioner Alan Simpson's deep-seated animosity toward Social Security's defenders.
To recap, Friday's post was inspired by CJR's shot at filling in the gaps in the sleazy Simpson story:
Here’s where the missing history and context come in, and why they should be useful for journalists who will cover this story for the rest of the year. In the mid-1990s, Simpson, as chair of the Senate Finance Committee’s subcommittee on Social Security and family policy, picked up the attacks made on the organization by conservative think tanks worried that AARP could block their efforts to cut Medicare and Social Security....
Simpson, who disagreed with the AARP’s positions on Medicare and Social Security, believed the group was obstructing budget cuts that Republicans needed to make in order to offset a planned round [of] tax cuts. Simpson held hearings on the AARP’s finances. "I’m a chairman. I can have hearings," he boasted to reporters in the Capitol corridor, dancing a little jig and pumping his arms in the air. A few days before he announced the hearings, Simpson said "People ought to know where their money comes from and what it’s used for." As I reported at the time, Simpson never produced a smoking gun, but he created plenty of smoke, focusing on irrelevancies like the size of AARP’s new building and its executives’ salaries.
But the AARP recognized what the hearings were really about. At a meeting with AARP’s board and staff, Simpson told them "I want you to know that the intensity of my investigation will be directly related to the intensity of your fight on Medicare." In an interview then, AARP’s chief lobbyist John Rother told me: "Many people on the right wing realized that AARP was the force to contend with. They realized they wouldn’t get anywhere unless they dealt with us as an institution."
Simpson's probing of the AARP was, no doubt, driven primarily by his vindictiveness, not to mention his willingness to use his elected office to punish political opponents. But he found a convenient ideological vehicle for his crusade in the Gingrich army's "defund the left" program that first manifested itself legislatively in what became known as the "Istook amendment" -- something I wrote about going on six years ago now:
Cloaked in the garb of "fiscal responsibility," the Istook amendment sought to prohibit lobbying by organizations that received federal grants. Such organizations, Istook and his allies reasoned, were fleecing the government by using their federal grant money to lobby for still more grants. Fiscal conservatism demanded, therefore, that those feeding at the public trough be cut off. Of course, it just so happened that most federal grantees involved in lobbying were liberal-leaning activist groups, whereas conservative activists did most of their work through privately funded, tax-exempt organizations such as the Heritage Foundation and their ilk. This gave perfect "budget hawk" cover to what would otherwise be an obviously partisan attack.
[...]
Concurrent with the heyday of the Istook amendment were other efforts backed by other Republicans, most notably ex-Rep. Bob Dornan (R-CA) and ex-Sen. Alan Simpson (R-WY), also aimed at eliminating or severely curtailing left-leaning lobbying. Dornan broke with Istook, McIntosh and Ehrlich and instead backed a measure to prohibit federal grants to any tax-exempt organization, targeting in particular the AARP, the AFL-CIO, the NEA and HIV/AIDS activists. Simpson actually conducted his own investigation of the AARP, prying into their finances and activities, ratcheting up pressure that many believe eventually resulted in AARP's capitulation years later on Republican-sponsored Medicare reform.
In addition to his investigation, Simpson took crazy-ass Dornan's position and offered an amendment to a Senate lobbying reform bill (S. 1060, the Lobbying Disclosure Act of 1995, now Public Law No: 104-65) prohibiting 501(c)(4) non-profits from receiving any federal grants. Why? Because 501(c)(4) groups can lobby, and Simpson argued that grant money was fungible, and therefore amounted to a federal subsidy for lobbying. In other words, a grantee like the AARP could use federal money to thwart his Social Security cutting agenda, and Simpson wanted that squashed. (Dornan, meanwhile, carried the crusade even further and against another perennial obstacle to the Republican fantasy of destruction, introducing a bill to revoke the charter of the National Education Association.)
Of course, Simpson's amendment suffered from the same flaw as Istook's, in that although it dictated that 501(c)(4) organizations "shall not be eligible for the receipt of Federal funds constituting an award, grant, contract, loan, or any other form," it ignored the Supreme Court's ruling in Regan v. Taxation with Representation of Washington, which declared, "Both tax exemptions and tax-deductibility are a form of subsidy that is administered through the tax system. A tax exemption has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income...." It had to ignore that, though, because otherwise, Simpson's amendment would have written 501(c)(4)s out of existence, since they're tax-exempt, and that tax-exemption itself is the same as a grant. Oops.
In fact, the Simpson amendment language was later modified to eliminate the reference to contracts, and to make the prohibition on lobbying more explicit, so that it now reads:
An organization described in section 501(c)(4) of the Internal Revenue Code of 1986 which engages in lobbying activities shall not be eligible for the receipt of Federal funds constituting an award, grant, or loan.
But as many of you currently working with 501(c)(4) groups may be aware, that just created a new loophole, though it came with Simpson's blessing at the time:
The legislative history of the provision clearly indicates that a 501(c)(4) organization may separately incorporate an affiliated 501(c)(4), which would not receive any federal funds, and which could engage in unlimited lobbying. The method of separately incorporating an affiliate to lobby, which was described by the amendment's sponsor as "splitting," was apparently intended to place a degree of separation between federal grant money and private lobbying, while permitting an organization to have a voice through which to exercise its protected First Amendment rights of speech, expression and petition. As stated by Senator Simpson: "If they decided to split into two separate 501(c)(4)'s, they could have one organization which could both receive funds and lobby without limits."
But that "splitting" has become an irritant to Republicans once again, now that Simpson's back on the catfood beat and the old Istook amendment troops smell blood (and maybe even privatized cash) in the water.
Joan had Simpson pegged dead-to-rights when she said:
You have to wonder, what was Obama thinking in naming this guy to the commission. He should never have been selected to participate on the commission and certainly not been named a co-chair, however much the President wanted to reach out to Republicans. Simpson's agenda seems to be almost wholly motivated by an irrational antipathy to the AARP. Not only should journalists covering this story keep that in mind when they write about it, but policy-makers--members of Congress and the President--need to remember it when the recommendations of the commission are made.
Now you know a little more about just how obvious Simpson's conflicts were to anyone who cared to see them, and for how long they've been out in the open. Yes, the co-chair of the Catfood Commission went out of his way 15 years ago to actually change the law specifically to weaken Social Security's strongest defenders. Now he's back to mop up.
No wonder he's been conducting himself like the proverbial inmate running the asylum. Just wait to see what happens if Republicans actually get their hands on the keys again.