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N2K: Voters’ Ire Aimed at Dems, Republicans

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April 24, 2011, 6:19 p.m.

State Rep. Nikki Haley (R) and state Sen. Vin­cent Sheheen (D) “are each al­leging that the oth­er isn’t com­ing clean with voters about out­side in­come, but state eth­ics law doesn’t re­quire nearly as much dis­clos­ure as either cam­paign might sug­gest.”

Want More On This Race? Check out the Hot­line Dash­board for a com­pre­hens­ive run­down of this race, in­clud­ing stor­ies, polls, ads, FEC num­bers, and more!

The SC GOP 10/11 “nicked Sheheen by say­ing his in­come for leg­al work wasn’t dis­closed and he should re­veal who his cli­ents are and how much his law firm makes.” State Eth­ics Com­mis­sion ex­ec. dir. Herb Hay­den: “As far as I can tell, Sheheen and Haley both have dis­closed everything that the law re­quires.”

A Sheheen TV ad, on Haley: “Yet she hid a $40,000 con­tract she got be­cause of her le­gis­lat­ive po­s­i­tion.” The claim “falls short be­cause noth­ing in the state’s eth­ics law re­quired Haley to dis­close that in­come.”

Sheheen spokes­per­son Trav Robertson “said the ad is on the mark be­cause Haley claimed to have dis­closed all of her in­come dur­ing” a GOP de­bate in June. But she was nev­er asked “spe­cific­ally about her eth­ics fil­ings and Haley noted that all of her in­come had been dis­closed, in­clud­ing through in­come tax re­turns” (Dav­en­port, AP, 10/11).

Sheheen: “She flat-out broke the law. We can’t have that in a gov­ernor again” (Bell, Green­ville News, 10/12).

SC GOP Chair Kar­en Floyd: “(Sheheen) has for months harped on Nikki Haley for not vol­un­tar­ily re­port­ing in­come that she is not even re­quired to dis­close, yet today we find out that he is guilty of far worse.” SC GOP ex­ec. dir. Joel Saw­yer: “Our un­der­stand­ing is that if the firm is mak­ing money in front of the state and he is a part­ner, then he should dis­close any in­come that he makes in front of the state.”

Sen­ate Eth­ics Com­mit­tee Chair Wes Hayes, a GOP­er: “We think he’s prob­ably go­ing bey­ond what he ab­so­lutely has to do” (AP, 10/11).

The Wid­ow Make Her

Late ex-Gov. Car­roll Camp­bell’s (R) wid­ow Iris Camp­bell “en­dorsed” Haley 10/11 “while” Sheheen “out­lined to a Columbia civic group why he was a bet­ter choice to pick up Camp­bell’s leg­acy.”

Iris, on Haley: “She has stayed fo­cused when she has been shot at from every angle. She’s one tough lady.” Haley, on Camp­bell: “Everything that he did he earned. If you give a man a job you give him pride.”

Sheheen “in­voked Camp­bell,” not­ing he was a GOP­er “who could suc­ceed” with a Dem-con­trolled Le­gis­lature.” Sheheen “said he would ‘work hard and pull to­geth­er’” (O’Con­nor, Columbia State, 10/12).

Wash­ing­ton wants you to be­lieve, all it wants for the hol­i­days is an ex­ten­ded payroll-tax cut.

It does not.

What Wash­ing­ton really wants this Decem­ber is a lever.

The Greek math­em­atician and en­gin­eer Archimedes in­ven­ted the cyl­indric­al screw “ma­chine” that led to oth­er lever-based devices that re­vo­lu­tion­ized hu­mans’ abil­ity to move wa­ter and earth. “Give me a place to stand and with a lever I will move the whole world,” Archimedes wrote.

These are the days of lever­age seek­ing. The lever is pressed hard against the im­mov­able rock of eco­nom­ic anxi­ety, per­en­ni­al job­less­ness, and slack in­vest­ment. The stalled eco­nomy has be­come the rock upon which Demo­crats and Re­pub­lic­ans have tried to lever­age polit­ic­al gain in this year’s payroll-tax en­dgame.

The en­dgame has plenty of drama. Pres­id­ent Obama’s ad­visers on Tues­day is­sued a veto threat against the only vi­able piece of le­gis­la­tion to ex­tend the payroll tax. (The House passed its bill after the Sen­ate failed to move its own ver­sion.) This stan­doff sits along­side yet an­oth­er shut­down scen­ario. Sen­ate Ma­jor­ity Lead­er Harry Re­id has stalled a ne­go­ti­ated con­fer­ence re­port on the re­main­ing nine pending ap­pro­pri­ations bills. A gov­ern­ment shut­down now looms on Fri­day, when the cur­rent stop­gap spend­ing bill ex­pires. Re­id won’t move the spend­ing bill un­til the payroll tax’s fate is re­solved.  

Re­id has found his place to stand. With a lever, he in­tends to move Re­pub­lic­ans.

Re­pub­lic­ans have found their lever, too. Oddly, it’s called Key­stone — that much-dis­cussed en­ergy pipeline from the tar sands of Canada. Upon the Key­stone, Re­pub­lic­ans hope to lever­age con­ces­sions from Re­id and Obama. The road to Key­stone for Re­pub­lic­ans was tor­tu­ous, and it only came after weeks of stum­bling through a tax wil­der­ness of their own cre­ation.

As every­one has no­ticed, Demo­crats have been tor­tur­ing Re­pub­lic­ans over wheth­er to ex­tend last year’s 2 per­cent cut in the em­ploy­ee-based payroll tax. His­tor­ic­ally, Re­pub­lic­ans sup­port all tax cuts and op­pose any at­tempts to raise taxes. And yet they were sur­pris­ingly phleg­mat­ic about ex­tend­ing the payroll-tax cut. GOP ob­jec­tions on policy were these: Last year’s payroll-tax cut wasn’t paid for, and any fu­ture ex­ten­sion must be “off­set” with spend­ing cuts to pre­serve fund­ing for So­cial Se­cur­ity. The eco­nom­ic be­ne­fits of the lower payroll tax were hard to dis­cern be­cause it ap­peared to neither dra­mat­ic­ally lower un­em­ploy­ment nor in­crease gross do­mest­ic product.  

Demo­crats re­spon­ded with a mil­lion­aire’s sur­tax to cov­er the cost of next year’s payroll-tax cut. Re­pub­lic­ans vig­or­ously ob­jec­ted, ar­guing — with only scant eco­nom­ic data be­hind them — that the tar­geted mil­lion­aires were “job cre­at­ors” and that the new levies would slow job growth. What the pub­lic saw was a black-and-white tax di­vide: Demo­crats were push­ing to keep a middle-class tax cut, while Re­pub­lic­ans were will­ing to jet­tis­on that to pro­tect mil­lion­aires. In the face of hideous polit­ic­al op­tics, Re­pub­lic­ans began to re­treat.

On policy, Re­pub­lic­ans felt more se­cure. After all, the Demo­crat­ic ar­gu­ment for ex­tend­ing the payroll tax did not con­sist of much more than “things-could-be-worse-if.” Last year’s payroll tax didn’t turn the eco­nomy around, Demo­crats con­ceded, but “things-could-be-worse-if” it wasn’t ex­ten­ded for at least an­oth­er year.

This sounds re­mark­ably like the post­game de­fense of the stim­u­lus act, but in both cases Demo­crats have a muted eco­nom­ic point. Al­though neither the stim­u­lus nor the payroll tax re­versed deep struc­tur­al prob­lems in the U.S. eco­nomy, they did act as buf­fers to pro­tect the poor and middle class from harder times. Ex­tend­ing un­em­ploy­ment be­ne­fits — an op­tion that has re­ceived less at­ten­tion — also provided an­ti­r­e­ces­sion­ary pad­ding. The Con­gres­sion­al Budget Of­fice es­tim­ates the GDP mul­ti­pli­er of job­less be­ne­fits is ac­tu­ally twice that of the payroll-tax cut.

That’s why Re­pub­lic­ans have come around on ex­tend­ing both. Along the way, Demo­crats and Obama ex­ploited di­vi­sions in their ranks. Sen­ate Re­pub­lic­ans were split down the middle on the is­sue, and two weeks ago House Re­pub­lic­ans would have been sim­il­arly cleaved.

Tired of be­ing di­vided, the GOP looked for a lever to di­vide Demo­crats. Re­pub­lic­an mem­bers be­lieve they’ve found it in Key­stone. Tran­sCanada, back­er of the pro­posed 1,700-mile pipeline from oil sands in Al­berta to re­finer­ies in the Gulf of Mex­ico, pro­jects 20,000 jobs will be cre­ated in the next two years. The State De­part­ment is skep­tic­al of those num­bers and es­tim­ates the U.S. job boost could be as low as 5,000.

Either way, Re­pub­lic­ans have ral­lied be­hind the pro­ject and see it as their first man­euver in weeks to di­vide Demo­crats. The White House delayed a fi­nal de­cision on wheth­er to green-light Key­stone un­til 2013. House Re­pub­lic­ans want a de­cision next year. The AFL-CIO sup­ports the Key­stone pipeline pro­ject, as do many oth­er trade uni­ons (al­though they op­pose the cur­rent House GOP bill). Demo­crats call Key­stone a “pois­on pill” meant to “score polit­ic­al points.” This ob­jec­tion is mu­sic to GOP ears. Mu­sic played by a lever.

Adding Key­stone to the bill dra­mat­ic­ally in­creased House GOP sup­port. For the first time in months, House Re­pub­lic­ans passed a big bill with more than 218 votes from their own con­fer­ence.

Re­pub­lic­ans be­lieve they have found their lever. Re­id knows he has his. The world will soon move be­neath someone. 

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