from the Congress Action newsletter

Needed Reform of “Federal" Corporations

by: Kim Weissman
August 1, 1999

If you’ve ever contributed money to your local Public Broadcasting System (PBS) station, and then received a solicitation from the Democratic National Committee (DNC) to make a political contribution, that was no coincidence. It turns out that various public television stations have been giving lists of their donors’ names to the DNC at least since 1994, in violation of standing station rules, according to various PBS affiliates. But then, as has become increasingly obvious, the standard attitude of the left in this country is that rules are made to be broken.

Several months ago, the Boston Globe broke the story of the name swapping scheme between one PBS affiliate and the DNC, which was dismissed at the time as merely a staffer error. Merely a low-level bureaucratic SNAFU, one might say, the excuse which has become standard operating procedure whenever the left is caught violating the law, rules, or established procedures. But the issue exploded during Congressional hearings in mid-July on reauthorizing funding for the Corporation for Public Broadcasting (CPB), when members were made aware of the PBS to DNC donor name game. It now turns out that the practice is much more widespread (numbering into the tens of thousands of names), and has been going on a lot longer (one station admitting the practice has been official policy for at least 20 years) than the lefties at the CPB originally admitted.

Officials at the various individual PBS stations involved, and at the umbrella CPB, now say that the practice has been addressed and is no longer a problem. It really is remarkable how closely the left follows the same script, no matter what shady dealings they are caught at: first deny, then minimize when proof becomes undeniable, then blame some low-level employee, then try to dismiss the problem (in Hillary’s famous phrase, it’s time to "move on") because it has been fixed and it is now old news.

We’ve even begun hearing the "everybody does it" defense: some leftists are alleging that PBS donor lists may have gone to the Republican National Committee (RNC) as well as to the DNC, although nobody has produced any evidence that that claim is true. Don’t be surprised if someone soon pipes up that there is "no controlling legal authority" to prohibit the exchange of names between a federally funded "educational" institution – which enjoys tax-exempt status -- and one partisan political party. Nor should we be surprised that the transfer of donor names from PBS affiliates went only to the DNC and not to the RNC.

Despite protests denying left-wing bias, PBS knows exactly whom their programming appeals to. Several years ago amidst accusations, and evidence, of left-wing bias (the staff of Boston’s PBS station WGBH broke into wild cheers when Clinton won the 1992 election), and calls by republicans to zero-out funding for the CPB (calls which, thanks to republican ineptitude and lack of backbone, went nowhere), Newt Gingrich called public broadcasting the playground for the rich. He had it a bit wrong. The CPB is, as they have so amply proven, both by their programming and now by shipping their donor’s names to the DNC, the playground for left-wing extremism.

Robert T. Coonrod, President and CEO of CPB, testifying before the House Subcommittee on Telecommunications on July 20, 1999 said: "there have been a few times when we have had to come before you and say, ‘Sorry. We've let you down.’ Regrettably, today is one of those occasions." He claimed that the donor name sharing was "non-partisan", claiming that donor names were also given to the 1996 Dole campaign, the Viguerie Fundraising Superfile, the Conservative Republican Superfile, Country Club Republicans, Golden Aged Republicans, Republican Party Builders, and Great American Donors (obviously big conservative political players, equal to the DNC).

On July 23, the Board of Directors of the CPB resolved that PBS stations must stop the practice of exchanging membership lists with partisan political organizations, and Board members unanimously voted that CPB management use "all means both legal and administrative to make sure such practices do not occur in the future." "The CPB Board will not condone any activities by stations which raise doubts about the integrity and objectivity of public broadcasting," said Diane Blair, CPB Board Chairman. The CPB will have to do a lot more than stop trading donor names to demonstrate "integrity and objectivity".

Of particular interest is the tax-exempt status of public television and radio stations. It has been shown by lawsuits by the Landmark Legal Foundation and the Western Journalism Center that the Internal Revenue Service under the Clinton administration has engaged in a jihad against conservatives, launching numerous politically motivated audits against conservative organizations which could be considered opponents of Bill Clinton, and threatening the tax exempt status of some because of alleged political activism. As several PBS affiliates and the President of the CPB have now admitted, they, too, have engaged for years in political activism, in support of left-wing politics.

There has been, so far, no word about any Internal Revenue Service audits launched against those PBS affiliates. We’re waiting.

When the Congress enacted welfare reform, there was much leftist lamentation about "corporate welfare" which also needed reforming. They were referring to programs such as federal handouts to multi-billion dollar private corporations for the purpose of stimulating overseas sales, and to subsidies such as those paid to the ethanol industry. Such programs indeed never should have been started, and should be ended.

What those leftists did not have in mind, however, were what might be called "federal corporations" such as the Corporation for Public Broadcasting, their favorite left-wing mouthpiece whose blatant bias was outlined above. Also notably absent from the leftist diatribe against "corporate welfare" was the Legal Services Corporation. To the allegations of out-of-control, biased, and arrogant taxpayer subsidized "federal corporations" might be added something even worse.

The Legal Services Corporation is a federally funded agency that provides free legal aid to the poor through 269 grantees around the country. The amount of funding received by the LSC is determined by their caseload – the number of people who receive legal services from those grantees. The LSC is presently seeking an increase in its funding by $40 million, to $340 million for FY 2000.

An audit by the LSC Inspector General, confirmed by a General Accounting Office audit, found that there has been serious misrepresentation of that caseload by the LSC and its grantees. These audits found that, of the sample of grantees audited, fully 47% of their reported caseload was phony.

The audits found double counting of cases, single telephone contacts in which no legal advice was provided counted as legal cases, and the creation of phantom cases out of thin air. LSC’s own 1998 annual report first claimed that it had served a total of 1.9 million cases in 1998; but later, as a result of the preliminary audits, the LSC was forced to admit that 200,000, and then 400,000 of those cases, were fictitious. Additional audits are ongoing.

These taxpayer subsidized "federal corporations", the Corporation for Public Broadcasting and the Legal Services Corporation, are the sort of bloated, arrogant, out-of-control entities which Bill Clinton and his left-wing extremist allies in Congress – aided by the gutless republican majority – insist not only on saving, but even expanding (until the CPB scandal became public, Congress was planning to increase funding for the CPB by $50 million next year, $40 million the year after, and up to as much as $175 million, to a total of nearly a half billion dollars by FY 2002).

These are the sort of entities which Bill Clinton and his allies want to duplicate and see proliferate, as an excuse to avoid returning your money to you in the form of a tax cut. Your money, which you have worked hard to earn, which you have paid to the federal government, resulting in a projected budget surplus for the first time since Nixon was president, your money which cannot be returned to you because Bill Clinton wants to increase funding for entities such as the CPB and the LSC, and wants to create even more of those financial black holes.

There is good reason to suspect that the rosy projections of massive budget surpluses into the future are no more accurate than the projections of massive deficits just a short time ago. It is useful to try to predict economic conditions years into the future, but it is ludicrous to commit the government to massive new entitlement spending on the basis of those predictions. It is almost – but not quite -- as foolish to mandate tax cuts years into the future on the basis of budget surpluses that may never materialize.

Far more rational would be to legislate a requirement for year-by-year tax rebates every year that a surplus is actually recorded. This would be a far more prudent approach than Clinton’s risky scheme to create massive new entitlement spending based on those projected surpluses; entitlements which, as we have seen, once created take on a life of their own and never do anything except expand endlessly into the future.

As ethereal as the projected budget surpluses may be, the chances of actually seeing a tax cut enacted into law may be even less of a reality. The House has enacted a bill providing for nearly $864 billion in tax cuts over 10 years (which, despite media and democrat hysteria, amounts to less than 5% of the annual federal budget), the Senate passed a $792 billion tax cut over 10 years, and Clinton says he will only accept a piddling $300 billion over 10 years (barely more than $100 per American per year).

Driven by media disinformation and leftist demagoguery about "massive tax cuts for the rich", however, it is unlikely that we will ever see any kind of tax cut at all. The media hates tax cuts because, in the words of the Washington Post, "Tax cuts generally favor the better-off…". But the Post also, no doubt accidentally, revealed why this is so: "…since they are the ones who pay the most taxes in our system."

And this is certainly true: Internal Revenue Service data shows that the top 25% of income earners pay 80.3% of all income taxes. These are among "the rich" whom the media and leftists constantly attack. So how much did these "rich" actually earn? Over $44,147 per year. And the top 50% of income earners pay 95.4% of all income taxes. These "rich" earned $22,361 or more per year. If a budget surplus does materialize, 95.4% of that surplus will have been paid by people earning as little as $22,361 per year. If you earn as little as $22,361 per year, you are "rich" according to democrats and the media, and you don’t deserve to get any of your money back.

Bill Clinton wants to spend it. In response to which, Federal Reserve Board Chairman Alan Greenspan was very clear: No new spending. Are you listening, Bill Clinton? Congress? Of course not. Big spending Clinton is no surprise, and it turns out that this republican Congress has no more fiscal discipline than previous democrat congresses.

"I would prefer that we keep the surplus in place; that is, reduce the debt. If that proves politically infeasible, cutting taxes is far superior to spending." – Federal Reserve Board Chairman Alan Greenspan (January 29, 1999).

"If it turns out to be infeasible to apply the surplus to reducing the debt, and it turns out that instead it is being spent, then I very strongly support tax cuts." – Federal Reserve Board Chairman Alan Greenspan (July 28, 1999).

The time has arrived to reconcile the differing House and Senate enacted juvenile justice and gun control bills (H.R.1501/S.254). Former republican Senator Bob Smith, apparently one of the very few members of Congress who take their oath of office seriously and still respects the Bill of Rights, attempted a filibuster to prevent appointing conferees to reconcile the bills.

Cloture (requiring three-fifths) was voted to cut off Smith’s filibuster. All 45 democrat Senators voted for cloture, and they were joined by 32 of the 55 republican Senators (led by Majority Leader Trent Lott), resulting in a 77-22 vote to stifle Smith’s defense of the Second Amendment.

House Speaker Hastert and Judiciary Chairman Hyde claim to be committed to crafting an "acceptable" set of tighter gun control laws. Acceptable to whom? Certainly not acceptable to anyone who still thinks we are a free people.



Tax Foundation analysis of Taxes by Income Class:

Legislative Text:

The above article is the property of Kim Weissman, and is reprinted with his permission.
Contact him prior to reproducing.


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1 August 1999