Conyers weighing probe of ACORN

ACORN in the news again.

Washington Times Article

Opponents of the liberal activist group ACORN have found an unlikely champion in House Judiciary Committee Chairman John Conyers Jr., who is clashing with his own party to pursue hearings on accusations that the group has committed crimes ranging from voter fraud to a mob-style “protection” racket.

“I still want to do it and I probably will,” Mr. Conyers, Michigan Democrat, told The Washington Times on Tuesday.

He dismissed the argument made by fellow Democrats that accusations of voter fraud and other crimes should be explored by prosecutors and decided in court, not by lawmakers in Congress.

“That’s our jurisdiction, the Department of Justice,” Mr. Conyers said. “That’s what we handle – voter fraud. Unless that’s been taken out of my jurisdiction and I didn’t know it.”

Mr. Conyers’ continued commitment to hearings bristles Capitol Hill Democrats because it threatens to rekindle criticism of the financial ties and close cooperation between President Obama’s campaign and ACORN and its sister organizations Citizens Services Inc. and Project Vote.

The groups came under fire during the campaign after probes into suspected voter fraud in a series of presidential battleground states, including Ohio, Pennsylvania, Michigan, New Mexico and Nevada.

Rep. Jerrold Nadler, New York Democrat and chairman of the Judiciary subcommittee with the jurisdiction to conduct the hearing, said he does not think Congress is the place to hear criminal charges.

“It’s not our business to say ACORN is terrible or ACORN is wonderful. That’s not a congressional job,” Mr. Nadler said. “The evidence – I’ve listened to it – I think most of it is nonsense. If it’s true, it’s a law enforcement matter.”

However, he said he would bow to Mr. Conyers’ request for a hearing. Mr. Conyers said he hasn’t “pushed him yet.”

ACORN officials, who have consistently denied any wrongdoing, said they welcomed a congressional probe.

“We are confident that in any setting where the facts are laid bare that the right-wing campaign to smear ACORN’s good work will be exposed,” ACORN spokesman Brian Kettenring said.

Mr. Conyers’ comments were made on the same day the Republican National Lawyers Association (RNLA) sent a letter to the Judiciary Committee to press for a hearing to “get to the bottom of the allegations” against ACORN.

Cleta Mitchell, RNLA co-chairman and a Washington lawyer, said she was pleased when she learned that Mr. Conyers had pledged to follow through with a probe of ACORN, though she remained skeptical the chairman would take on the Democrat-allied group.

“I hope this is a real hearing and not a whitewash,” she said. “If there is a panel comprised primarily of those who want to bury the truth about ACORN, then it won’t be a real hearing.”

Mr. Conyers, a fierce partisan known for his drive to continue investigating the Bush administration, first shifted his position on ACORN at a March 19 hearing of Mr. Nadler’s subcommittee that explored issues from the 2008 presidential election.

He suggested a congressional probe after scathing testimony that the nonprofit group was violating tax, campaign-finance and other laws by, among other things, sharing with the Barack Obama campaign a list of the Democrat’s maxed-out campaign donors so ACORN could use it to solicit them for a get-out-the-vote drive.

The proposal was met by resistance from Mr. Nadler, and Mr. Conyers had not publicly pressed the matter since then.

Mr. Conyers previously defended ACORN. In October, he condemned an FBI voter fraud investigation targeting the group. He questioned whether it was politically motivated to hamper a voter-registration drive targeting groups likely to support Mr. Obama’s candidacy.

The testimony that provoked the change was delivered by Pittsburgh lawyer Heather Heidelbaugh, a member of the RNLA executive committee.

She also testified that the organization provided liberal causes with protest-for-hire services and coerced donations from targets of demonstrations through a shakedown it called the “muscle for the money” program.

Ms. Heidelbaugh spearheaded an unsuccessful lawsuit last year seeking a court injunction in Pennsylvania against ACORN’s voter-registration drive for the 2008 presidential campaign. She appeared as a witness at the request of Republican committee members.

The accusations against the group were based entirely on sworn court testimony late last year by ACORN whistleblower Anita MonCrief. No ACORN officials testified at the March 19 hearing, but they have dismissed Ms. MonCrief as a disgruntled, low-level employee who was fired for stealing money from the organization.

Obama’s Poor Tax

from the Wall Street Journal

“I can make a firm pledge . . . no family making less than $250,000 a year will see any form of tax increase.” Remember that? It was Barack Obama, campaigning to become president last Sept. 12 in Dover, N.H.

Indeed, he promised repeatedly that 95% of American families would get a tax cut. So it’s especially fitting that he chose April Fools Day to implement his first tax increase — which will fall mostly on individuals and families who do not make anywhere near $250,000 per year.

Early in February, the president signed a law to triple the federal excise tax on cigarettes — which will jump from 39 cents per pack to $1.01 today. His administration projects this tax hike will bring in at least $38 billion over the next five years.

If you don’t smoke, maybe you don’t care. Maybe you even think a higher “sin tax” is a good thing. But health issues aren’t the only concern here. There are also questions of fairness, federalism, macroeconomic impact, and crime.

The fairness issue is particularly troubling. According to the Centers for Disease Control and Prevention, only one in five Americans smokes, so the excise targets a minority — and over half of all smokers are low income, and one of four are officially classified as poor.

Mr. Obama prefers to tout his tax cuts for low-income households. But his “stimulative” Make Work Pay tax cut gets dribbled out at $8-$10 a week. A pack-a-day smoker will pay half of that back in higher cigarette taxes. Smokers getting welfare, unemployment or disability checks instead of paychecks won’t get as much in tax cuts, but they will still pay the whole cigarette tax increase. Anyone concerned about widening income inequality should have second thoughts about this distribution of the tax burden.

We should also note how this tax increase affects state finances. State governments rely on their own cigarette excise taxes for hefty revenue streams. In 2008, according to the National Tax Foundation, state governments took in $15.4 billion in cigarette taxes. Hard-hit Michigan, Pennsylvania, and California each took in over $1 billion; New York and Texas took in $1.5 billion each.

Higher taxes discourage cigarette sales. Nobel economist Gary Becker pegs the long-run price elasticity of demand for cigarettes at 0.8 — i.e., a 10% increase in price causes an 8% decline in unit sales. The Obama tax hike translates into a 13.3% increase in the average pack price. That implies a 10.6% decline in unit sales — which the National Tax Foundation has calculated adds up to a $1 billion overall revenue loss for hard-pressed states.

Because Southern states have low tax rates (most less than 40 cents per pack), the federal tax hike raises their cigarette prices by a larger percentage and thus cuts deeper into their unit sales. New York, by contrast, has the highest state taxes ($2.75 a pack) and prices, so it gets hit less in percentage terms. The Tax Foundation estimates a 12.6% revenue loss for South Carolina this coming fiscal year, and a 6.7% loss for New York.

None of this is good for the economy. Consumers and state governments are already having a tough time making ends meet. Burdening them with a new $38 billion tax and a $1 billion cut in revenues isn’t going to help create jobs. Estimates by the National Association of Tobacco Outlets of the job losses in cigarette manufacturing and distribution alone exceed 100,000.

Smugglers and counterfeiters won’t lose their jobs, though. Both the General Accounting Office (GAO) and the Alcohol, Tobacco, and Firearms (ATF) agency have concluded that the multibillion-dollar cigarette-smuggling business grows with every excise tax increase. The ATF and GAO also believe that cigarette-smuggling is a form of cash laundering and profits for both organized crime and terrorist organizations.

Clearly, we were fools to believe that if we weren’t wealthy, Mr. Obama wasn’t going to raise our taxes. We’ll be even bigger fools if we acquiesce to further tax increases of this kind.

Mr. Schiller, professor of economics at University of Nevada, Reno, is the author of “The Economy Today” (McGraw-Hill, 2008).