The Huffingtonpost blog today carries a story headlined “GOP Looks to Redistrict Itself Back into Power.” The gist is that Republicans have “a sense of dread” over a “potentially massive” loss of seats in Congress this fall. The contingency plan: Win a majority of governorships (Democrats currently hold 28 of 50) and use the governors’ influence over redistricting to have state legislatures draw maps friendly to GOP candidates.

This might sound to Texas ears as the kind of story that is of inside-the-Beltway interest only, except for the first organization mentioned in the story:

“The 2010 elections are almost as important or equally important as the elections this year. After redistricting in 2011, the governors are going to have a huge influence in determining the political makeup of this country,” said Chris Schrimpf, a spokesman for the Republican Governors Association. “We could feasibly see 25 to 30 congressional seats swing as the result of redistricting. And the state legislatures and governor could determine that swing. Can the National Republican Congressional Committee make a statement like that with a straight face? It would be harder for them.”

Ah yes, the Republican Governors Association. Chris Schrimpf works for Rick Perry. The slap at the NRCC was vintage Perry. The message is that if Republicans want to swing 25 to 30 congressional seats to the GOP in 2010, they should put Perry and the RGA in charge–and contribute their money to the RGA–rather than the NRCC. Elect governors who are willing and eager to gerrymander in 2011. It worked in Texas, didn’t it?

Whatever you or I may think of Perry as a governor, it would be a mistake to think that he is anything less than a brilliant politician. He has a homing instinct for hidden sources of power, like the RGA. He understands money and he understands message, and he knows how to use both. If he is able to make himself into the chief fundraiser for Republican governors in 2010, he will establish himself as a major force in Republican circles, if he is not that already. I have believed for some time now that he is positioning himself to run for president in 2012. He could come out of the 2010 elections holding IOUs from a lot of governors he helped elect. That is a pretty good way to start a presidential campaign. Don’t laugh.

Oh, no, not again. Today’s papers carry the dismaying news that the chairman of the House Appropriations committee is bent on making a spectacle of himself — and the House — one more time. He has vowed to reintroduce a new version of HB 2684 from the 80th Legislature, which lengthens the waiting period before a divorce becomes final from 60 days to two years. The longer waiting period can be avoided if the couple takes a two-day marital counseling course that teaches conflict management, communication skills, and forgiveness skills.

Why is it that legislators insist on meddling in things that are none of their damned business? What unhappy couples want to unjoin, let no man try to put back together. The obvious fact here is that if couples wanted their marriage to be saved, they would already have sought marital counseling. Any competent counselor would have instructed them in the arts of conflict management, communication skills, and forgiveness skills. The remedy proposed by the bill is a waste of time–of the couple’s time and of the Legislature’s time.

As the result of this and other questionable legislation that Mr. Chisum carried last session, he ended up on Texas Monthly’s Ten Worst list. I hope it doesn’t happen again, but I fear the Worst. After publication, Mr. Chisum sent me the following letter. My response to him follows.

According to your Best & Worst Legislators article, it’s bad to believe that marriage should be saved if at all possible. It’s bad for people to learn how to forgive, and it’s bad for the Bible as literature be offered in high school. If you define those beliefs as bad, then I’m rotten to the core. Howevere, what you so blithely left out of your profile of me are the facts: marriages that remain intact (with the exception of abusive situations) create happier, healthier families; forgiveness is not easy, but when extended can have dramatically positive effects; and recent surveys have shown that English professors and teachers believe that Biblical knowledge confers a major educational advantage to those who have it. I would rather be on the ten worst list because I stood by my beliefs and maintained my integrity than sell out to get on the ten best list. Regarding you listing me as one of the ten worst, let me just say that I extend to you my sincere forgiveness.

This was my response, which I posted in the blog, along with his letter:

“Warren Chisum is not on the Worst list because he did something egregious. He’s not that kind of legislator, nor is he that kind of man. He’s certainly not on the Worst list because he wanted to save marriages and authorize teaching of the Bible in high school. He is on the list because he ran afoul of the maxim, ‘Of those to whom much is given, much is asked.’ As chairman of the House Appropriations Committee, Mr. Chisum achieved the pinnacle of legislative power and influence. My belief is that lawmakers who reach that level have an obligation to be role models. It is their duty to provide the example to younger members of what it takes to become a respected policymaker. I didn’t manufacture that belief this year. It has become ingrained in the way that I look at the Legislature, from watching the very best members operate over many sessions: Bill Ratliff, David Sibley, Steve Wolens, Rob Junell, Paul Sadler, Bill Messer, Stan Schlueter, Kenny Marchant. Here’s the standard as I believe that these members practiced it: You can’t mix your policy agenda and your personal agenda. One of the reasons is that when a legislator in a position of power takes a divisive social issue to the floor, or a lobby bill, or a vendor bill, ordinary members feel under pressure to vote for it, to avoid reprisals. Do I think Warren Chisum is a vindictive person? Certainly not. Do members worry about crossing the chairman of Appropriations? Certainly. Chisum did things you couldn’t have made Bill Ratliff or Paul Sadler do with a cattle prod. He moved the previous question to cut off debate when there were only four amendments left to be discussed. He lost. He carried a vendor bill (to provide drivers’ records at DPS to insurance companies) to the floor as a favor to a lobbyist, lost, arranged to reconsider the vote the next day, and lost again. After the Public Education committee rewrote his Bible study bill to strengthen its academic aspects, he tried to substitute his version, which the committee had viewed as flawed, on the floor. He lost again. I was on the floor for these episodes, and the members I talked to were shocked. I wrote in the Best and Worst Legislators article that ‘Chisum squandered his gravitas.’ This may seem like a victimless crime, in which the harm is done only to the perpetrator. But that’s not the case. When respected senior legislators expose themselves to defeat and repudiation, everybody loses. That’s why Warren Chisum is on the Ten Worst list, and why I am sad to see him there.”

* * * *

When the Best and Worst Legislators article was first contemplated in 1973, the people involved in writing the story–primarily William Broyles, Griffin Smith, and Richard West, all of whom were quite familiar with the legislative process (I was still working in the Senate)–decided that our standard for judging legislators should be the way the members judge each other. There is a collective understanding of what makes a good legislator and what makes a bad one. That standard has evolved over the last 35 years, but in general it starts with respect for the process. What Mr. Chisum did last session was not appropriate leadership for someone at the very top of the legislative pyramid. You don’t try to sneak through a vendor bill; you don’t shut off your colleagues from debate, and you don’t try to enact your personal moral beliefs into law, no matter how much you believe in them. You guard your reputation and your stature. He didn’t do that, and other members who I respect were dismayed that he hadn’t. I will be the first to say that Mr. Chisum is a very able and sincere legislator. He has a quick, agile mind in floor debate. He has a good feel for the mood of the House at any given moment. He’s not the most knowledgeable appropriations chairman the House has had, but he is fair. He just cherishes his prejudices too much to give them up.

The last item I posted about Rove ["D's use the specter of Karl Rove to raise money"] drew one comment that asked, “What’s the point?” I shouldn’t have to explain, but:

1. Rove is the smartest political consultant in the business.
2. He is the most dominant figure in his line of work since Lee Atwater.
3. He also happens to be a Texan.

I’m not trying to make you like him. I’m not trying to whitewash whatever he did in the White House that he refuses to testify under oath about. I am not offering any warranties on his character. I’m just passing on his observations about politics that I think are pertinent. So I have signed up to receive his pronouncements by e-mail.

Here’s an example: The conventional wisdom about this election is that Obama has a huge lead on McCain in fundraising. Writing in the Wall Street Journal on Thursday, Rove provided some interesting numbers that suggest otherwise:

On the money front, how do Sens. Obama and McCain stack up? No contest, it seems. Since the campaign began, Mr. Obama has raised a staggering $295-plus million, versus Mr. McCain’s almost $122 million. But that’s misleading.

Mr. Obama spent a lot to win the nomination. So how much cash did he and his rival have when the general election effectively began in June? As of May 31, Mr. Obama had $43.1 million on hand while Mr. McCain had $31.6 million - a significant but not overwhelming advantage.

There is also the cash raised by the Republican and Democratic National Committees. Each candidate depends on the party committees for certain expenditures - registration, voter identification and get-out-the-vote drives, materials distributed by volunteers, even some advertising. Here, the Republicans had $53.5 million in hand on May 31, versus the Democrats’ paltry $4 million. Thus Mr. McCain and the RNC have $38 million more than Mr. Obama and the DNC.

Here is another interesting piece, unpublished but included in the e-mail. It is entitled “Obama’s Red State Gambit.”

Obama is up with his second general election ad. It’s running in 21 states at the cost of nearly $15 million. Among his targets: the traditionally Republican strongholds of Virginia, North Carolina, Georgia, South Carolina, Montana, Indiana, Alaska, Nebraska, and North Dakota. What does history suggest Obama’s chances of swiping these states from the GOP are?

Rove compares the results from all 50 states and the District of Columbia for all elections from 1976 to 2004 to determine how often shifts have occurred in a state from one election to the next. His analysis produced 357 data points. For example, Carter won his native state of Georgia in 1980 by 15 points. Four years later, Reagan, running for reelection, won Georgia by 18 points.

Nebraska
Required shift from 04: 33 points
Frequency of shift: 1 in 357 (.03%)

North Dakota/Alaska
Required shift from 04: 27 points
Frequency: 4 of 357 (1.1%)

Indiana
Required shift from 04: 21 points
Frequency: 9 of 357 (2.5%)

Montana
Required shift from 04: 20 points
Frequency: 12 of 357 (3.4%)

South Carolina
Required shift from 04: 17 points
Frequency: 18 of 357 (5%)

Georgia
Required shift from 04: 16 points
Frequency: 20 of 357 (5.6%)

North Carolina
Required shift from 04: 12 points
Frequency: 41 of 357 (11.5%)

Virginia
Required shift from 04: 8 points
52 of 357 (14.6%)

Rove concludes:

Is spending money in these deep red states a smart strategic move? It’s not out of the question that Obama might flip one of these red states come November–the 8-point shift he needs in Virginia has happened 52 times (14.6% of possible outcomes)–but the historical record suggests his actions may be either unwise, an attempt to goad McCain into spending money unwisely, or a sign of the Obama campaign’s hubris about its ability to raise money.

Rove obviously thinks Obama’s summer media buy was a bad move. But was it? I don’t think so. 2008 is not 2004:
1. John Kerry was a weak candidate with little appeal to swing voters.
2. The scandals that would cost the Republicans control of Congress were still in the future.
3. The economy was in relatively good shape.
4. The Republican party was united behind their candidate.
5. Change was not in the air in 2004. It is today.

All of these factors suggest that big swings are far more likely to occur in 2008 than they were in 2004. Furthermore, several of the red states where Obama is spending money are small-market states with low population. He doesn’t have to turn a lot of votes to achieve a swing in places like Alaska, Nebraska, Montana, and North Dakota. Nor does he have to spend lot of money.

In fact, Rove’s own electoral map suggests that Obama is spending his money very wisely indeed. Of the nine red states that Obama is targeting, Rove shows Obama leading in Montana; Virginia and North Dakota as tossup states; and McCain leading by only 5 points in Nebraska, 4 in Alaska, and 4 in North Carolina. In the three remaining states, McCain’s lead is in single digits (South Carolina +9, Georgia +7, Indiana +5). As Bush proved in 2000 when he won West Virginia, it only takes one or two swing states to change an election–and Rove’s map is already showing Obama ahead in three key states that were won by Bush: Colorado, New Mexico, and (drumroll please) Ohio.

This letter was sent out over the Internet tonight by consultant James Carville, urging Democrats to beat the midnight deadline with their contributions to Barack Obama. The reason: In their hour of travail, Republicans have turned to Karl Rove to save them. Here is the text of Carville’s letter.

Republicans are placing a big bet on Karl Rove.

James Carville

I just spoke to David Beckwith, formerly (according to Burnt Orange Report) with the Cornyn campaign. He called me from the Cornyn campaign office, for which, according to Burnt Orange, he is not supposed to be employed, having been fired last week by none other than Karen Hughes for his involvement in the “Big Bad John” campaign video that has been greeted with hilarity in circles that do not wish Cornyn well.

“Karen Hughes has no role whatsoever in the campaign,” Beckwith told me. “Furthermore, we consider the video a plus. Not only am I still working for the campaign, but I am also part time in the senator’s state office.”

Far be it from me to criticize a fellow blogger for publishing — I’m shocked, shocked — rumors. especially one that isn’t correct. But the episode wasn’t a total loss for the BOR folks. They did manage to unmask Beckwith as a blogger using the pseudonym of Buck Smith to post unfavorable comments about Democrats. Again, I’m shocked. Really.

I think the answer is: a lot.

The Court handed down three decisions this week with major political implications:

(1) Kennedy vs. Louisiana. This ruling struck down Louisiana’s version of Jessica’s law with the broad holding that capital punishment can be imposed only for the crime of murder, not for the rape of a child.

(2) District of Columbia vs. Heller. The Court overturned Washington, D.C.’s ban on handgun possession and an accompanying law requiring any firearms that are kept in the home to be disassembled.

(3) Exxon Shipping co. v. Baker. The Court substantially reduced lower court judgments for punitive damages against Exxon for the Prince William Sound disaster.

Barack Obama has taken a centrist position on the first two cases, Time magazine notes:

Obama surprised some observers by siding with the hardline minority of Justices Scalia, Thomas, Roberts and Alito [in Kennedy]. At a press conference after the decision, Obama said, “I think that the rape of a small child, six or eight years old, is a heinous crime and if a state makes a decision that under narrow, limited, well-defined circumstances the death penalty is at least potentially applicable, that that does not violate our Constitution.”

Then Thursday, after Justice Scalia released his majority opinion [in Heller] knocking down the city of Washington’s ban on handguns, Obama said in a statement, “I have always believed that the Second Amendment protects the right of individuals to bear arms, but I also identify with the need for crime-ravaged communities to save their children from the violence that plagues our streets through common-sense, effective safety measures. The Supreme Court has now endorsed that view.”

Obama didn’t leave much of an opening for Republicans to exploit in either statement. However, the big issue in gun-rights cases is whether cities and states can still impose any kind of prohibition on possession of guns. Obama says that the Supreme Court has endorsed “effective safety measures.” But not many. Scalia did say that jurisdictions could ban guns in sensitive areas, such as schools and government buildings. But his opinion establishes a constitutional right to possess handguns at home for self-defense.

I expect the question of capital punishment for child rape to be a staple in debates during the upcoming campaign. Very few states allow such a punishment, and most that do are in the South. Capital punishment is not as popular in other sections of the country. I don’t think the expansion of capital punishment is a winning issue in most states, and it is opposed by most advocacy groups in the area of sexual abuse of children.

It’s not clear what is left to argue about in the issue of gun control, other than what restraints on possession of firearms can survive constitutional scrutiny. The broad question in a debate would be: Now that the Supreme Court has held that Americans have the right to possess handguns for self-defense, do you favor allowing cities and states to regulate the possession and use of other firearms? Obama has already given the standard answer.

The Exxon case may the sleeper in this group. Letting the biggest, richest company off the hook is going to make environmentalists — and a lot of other folks — furious. The decision to limit punitive damages to an amount equal to actual damages appears to be arbitrary. The Republicans have tried to make energy a big issue, but this case is not going to win any friends for the oil industry. The R’s may find themselves on the defensive.

The most Republican-friendly high profile case from is the decision that held the Voter ID bill constitutional. It’s a winning issue for Republicans. Democrats had better figure out a way to make it palatable. It’s going to be the law.

The decision in District of Columbia v. Heller has settled the fundamental issue involving gun control, which is whether the Second Amendment limits the right to possess firearms to those serving in militias or whether it is an individual right. I never thought that the former argument would prevail. It is clever but not persuasive. The text of the amendment reads, “A well regulated militia, being necessary to the security of a free State, the right of the people to keep and bear arms, shall not be infringed.” Common sense suggests that many eighteenth century Americans owned firearms and used them for hunting and self-defense. America was a frontier nation. People on the frontier owned guns. Justice Scalia, writing for the 5-4 majority, amassed a litany of historical evidence dating back to England.

The two key elements of the Court’s holding are:

The Second Amendment protects an individual’s right to possess a firearm unconnected with service in a militia, and to use that firearm for traditionally lawful purposes, such as self defense within the home.

The Amendment’s prefatory clause announces a purpose but does not limit or expand the scope of the second part, the operative clause. The operative clause’s text and history demonstrate that it connotes an individual right to keep and bear arms.

The question now — and it is sure to be litigated — is whether the decision allows government to impose any restrictions on gun ownership. Anti-gun control forces will argue that the Second Amendment should be imposed upon states and local government through the Due Process Clause, as other constitutional rights have been.

The majority opinion did not address the due process issue. But it did discuss the scope of the right to keep and bear arms:

Like most rights, the right secured by the Second Amendment is not unlimited….[C]ommentators and courts routinely explained that the right was not a right to keep and carry any weapon whatsoever in any manner whatsoever and for whatever purposes. For example, the majority of 19th-century courts to consider the question held that prohibitions on carrying concealed weapons were lawful under the Second Amendment or state analogues….Nothing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places, such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of firearms.

We also recognize another important limitation on the right to keep and carry arms….[T]he sorts of weapons protected [under a previous decision] were those “in common use at the time.” We think that limitation is fairly supported by the historical tradition of prohibiting the carrying of “dangerous and unusual weapons.”

Finally, the majority attempts to show its sensitive side:

We are aware of the problem of handgun violence in this country, and we take seriously the concerns raised by the many amici who believe that prohibition of handgun ownership is a solution. The Constitution leaves the District of Columbia a variety of tools for combating the problem, including some measures regulating handguns. [The opinion here refers to the language cited above.] But the enshrinement of constitutional rights necessarily takes certain policy choices off the table. These include the absolute prohibition of handguns held and used for self-defense in the home. Undoubtedly some think that the Second Amendment is outmoded in a society where our standing army is the pride of the Nation, where well-trained police forces provide personal security, and where gun violence is a serious problem. That is perhaps debatable, but what is not debatable is that it is not the role of this Court to pronounce the Second Amendment extinct.

Exactly what state and local governments can do is unclear. The Court tries to get by with saying that government can do anything except impose an absolute prohibition on handguns held and used for self-defense in the home. But gun-control advocates are not going to be satisfied with that. What about gun registration laws? What about mandatory gun training classes? What about possession of automatic weapons? What about limitations on carrying handguns outside the home? All of these and more are going to be challenged.

It didn’t take long for fallout to occur from the Supreme Court’s decision establishing the right to possess handguns for self-defense. One day after the decision was handed down, another lawsuit has been filed. This report is from SCOTUSblog:

In a newly filed lawsuit in federal court in Chicago, two gun rights organizations and four individuals asked that the Second Amendment be extended to block strict gun laws at the state and local level. “The Second Amendment right,” the complaint contended, “is incorporated as against the states and their political subdivisions pursuant to the Due Process Clause of the Fourteenth Amendment.”

The case, McDonald, et al., v. City of Chicago, et al. (District docket 08-3645), was filed in U.S. District Court in Chicago to challenge a city ordinance that bars registration of handguns with only a few exceptions, and that limits registration of other guns. The case was assigned to Senior District Judge Milton I. Shadur.

Because this is only a complaint to start a case, there is no full-scale argument defending the notion that the Amendment — now protecting an individual right to have a handgun for self-defense at home — applies to state and local government. The Supreme Court, in finding an individual right by its ruling Thursday in District of Columbia v. Heller (07-290), said it was not deciding whether the Amendment went beyond federal laws (or laws of the federal capital in Washington, D.C.). That is what the new lawsuit raises directly.

“The Second Amendment right to keep and bear arms is a privilege and immunity of United States citizenship which, pursuant to the Fourteenth Amendment, states and their political subdivisions may not violate,” the complaint argues. “Handguns, as a class of weapons, are ‘arms’ whose possession by law-abiding adult citizens is protected by the Second Amendment right to keep and bear arms.”

Joining in the lawsuit is the Second Amendment Foundation, an advocacy group, and the Illinois State Rifle Association. The individuals in the case are Otis McDonald, a Chicago resident who says he lives in a high-crime neighborhood and has been threatened by drug dealers; Adam Orlov, who lives in Chicago and is a former police officer in Evanston, Ill., and Colleen and David Lawson, Chicago residents who say their home has been targeted by burglars.

The former state comptroller distributed an op-ed piece on Thursday with his proposals on how to increase domestic energy production. His approach is to reduce or eliminate taxes for domestic production and to impose taxes on foreign oil. I wouldn’t count on his being Secretary of Energy in the Obama administration.

One of the great problems with American energy policy is the government. Government usually makes poor decisions on whom to favor in energy production here in America, just as governments in non-democracies make poor decisions and cause supply and demand disruptions. The secret to America’s economic success has never been government decisions on energy production or for that matter, any other kind of production. The real secret to American economic prosperity has always been free markets. The best that governments should do is lessen restrictions on energy and allow markets to “produce to demand” with reasonable regulations. In that light, if you want more of something, tax it less. If you want less, tax it more. We need more energy and government should not decide what kind of energy. The markets of the American people should decide.

What do we want less of? Foreign Oil! Give the President the option to impose oil import fees on crude and refined products to use at his discretion. If enacted, it would give an advantage to domestic production, and the next time a President goes to Saudi Arabia with a request, he’ll have more in his hand than his hat. Much has been made of speculation in oil futures. Of course there is speculation and that speculation ought to be reigned in, but the real cause of the speculation is loose monetary policy by the Federal Reserve that has resulted in a huge amount of liquidity sloshing around the world that’s looking for an investment. So if we want to assign blame for that, Alan Greenspan would be a good place to start. However, if you want to solve the problem instead of assigning blame, the tax incentives I mentioned are the best place to start, because then all of that money sloshing around the world would invest in American energy production of all kinds. With these tax policies the free markets of America will amaze the world with our energy production, including all forms of alternative energy, and the laws of supply and demand will bring us adequate energy at a fair price.

The business margins tax has come under increasing attack as being bad for business. One of its leading critics is Senator Dan Patrick, who e-mailed me a detailed critique of the business tax, which I have posted below, and responded to as well. My credentials as an economist are a bit suspect, but I did find this analysis online by the Federal Reserve Bank of Dallas. I am going to excerpt selections from the article below.

Southwest Economy
Issue 2, March/April 2008
Federal Reserve Bank of Dallas

Will New Business Tax Dull Texas’ Competitive Edge?
By Jason L. Saving

In today’s global economy, high corporate tax rates are more harmful than ever because it has become easier for mobile productive resources to cross borders in search of more favorable business climates.

Nations seem quite aware of this. The European Union’s corporate tax rates have fallen by a third over the past decade, with five member states making cuts in 2006 alone. Asian nations, too, have responded to global competition by reducing the tax bite on business. In fact, all members of the Organization for Economic Cooperation and Development impose lower corporate tax rates than they did in the mid-1980s.

It’s in this context—though not for this reason—that Texas recently revamped the franchise tax, its main vehicle of corporate taxation. This year, the state implemented a version that’s expected to raise more than twice the revenue of the old tax, changing both the number of businesses subject to taxation and the distribution of the burden across sectors.

The new way of taxing businesses raises an important issue: Will it erode the Texas economy’s highly competitive business climate?

* * * *

Revenue from the franchise tax hasn’t kept up with an expanding Texas economy. Between 1997 and 2006, for example, nominal franchise-tax receipts grew at an annual rate of 4.2 percent, versus 6.6 percent for the overall state economy. Moreover, the franchise tax had the lowest growth rate of Texas’ major taxes in the decade, partly because productive resources shifted toward sectors and legal forms that bear a relatively small share of the franchise-tax burden.

* * * *

Economic theory suggests the tax code should treat similar businesses the same. When this doesn’t occur, resources flow disproportionately to favored businesses and sectors, and overall economic activity falls below what it would have been in the absence of distortions.

One aspect of the franchise tax that produces unequal treatment is the legal status of businesses. For a variety of reasons, the franchise tax has never applied to sole proprietorships, which are generally small and comprise about three-quarters of Texas businesses.[1] The franchise tax also exempts partnerships and other noncorporate entities that share many of the economic characteristics of corporations.

These exemptions provide an incentive for businesses to operate as sole proprietorships or partnerships to escape franchise taxes—a spur that’s particularly strong in states like Texas that don’t levy personal income taxes.

Another feature of the franchise tax is the so-called Delaware sub loophole. By becoming a subsidiary of an out-of-state holding company and funneling income to it, Texas firms can legally avoid most franchise-tax liability. Delaware has been a common choice as a headquarters state due to its favorable corporate tax laws. Former Texas Comptroller Carol Keeton Strayhorn once assessed the loophole’s cost to the state treasury at about $300 million a year.

In addition, the franchise tax doesn’t reflect the modern Texas economy. The tax’s wealth-based nature imposes a relatively high burden on capital-intensive industries like manufacturing and mining but a relatively low burden on labor-intensive industries, such as construction and services.

Perhaps a justification could be made for this tax scheme in the early 20th century, when manufacturing and oil and gas constituted a substantial portion of Texas’ economy. But in 2007, service-sector businesses made up two-thirds of the state economy, creating a situation in which similarly sized businesses had very different tax liabilities, depending on what they produced and how they produced it.

Texas GDP by Sector
1st Qtr 2007

Mining 12%
Construction 6%
Manufacturing 15%
Trade 10%
Finance, insurance, real estate 16%
Other services 25%
Utility, transportation, information 10%

Do franchise taxes fall disproportionately on certain sectors of the Texas economy? The data say yes. Mining faces the highest franchise tax burden at $2,083 per employee, followed by utilities, transportation and information at $1,073 and manufacturing at $574. Construction, trade and “other services” (including professional and business services) pay between $97 and $308 per employee.

* * * *

The margin tax has several implications for the state economy. First, it slightly raises Texas businesses’ aggregate tax burden. Second, it to some degree reduces distortions across sectors, encouraging a more efficient—and productive—allocation of resources within Texas. Finally, it moves the tax structure toward treating similar businesses the same, which should also foster a better use of resources.

What does this mean for Texas’ business environment? To answer this question, it’s helpful to recall perceptions under the old franchise tax. Texas had the nation’s sixth-best business climate and eighth-lowest overall tax burden, according to the nonpartisan Tax Foundation. Forbes.com placed the state’s business climate second behind Virginia’s, and the Fraser Institute ranked it eighth.

While any single study can be disputed, it’s hard to challenge the general finding that the Texas business climate has been widely regarded as above average.

And this business climate has helped Texas compete globally. Recent Southwest Economy articles have documented how Texas is increasingly open to the global economy and how its growth rate has exceeded the nation’s. Both measures are consistent with a favorable business climate.

Today’s globalizing, technology-rich economy allows factors of production to move faster and farther in seeking places where they can be used most effectively. In this environment, it makes sense that states like Texas with relatively favorable business climates would see their economies—and populations—grow faster than in the U.S. overall.

Because the margin tax will raise more money than the previous franchise tax, it’s tempting to conclude it will harm the state’s business climate. But the new tax also treats sectors and businesses somewhat more equally than the old franchise tax did, producing a more efficient allocation of resources. The higher revenue and greater efficiencies will offset themselves to some degree, mitigating the negative impact of a higher franchise tax burden on the overall business climate.

Other tax changes made concurrently with the new margin tax—notably, a reduction in property tax burdens borne by both businesses and individuals—further mitigate the adverse impact and could arguably leave Texas with a slightly more favorable business climate than it had under the previous franchise tax. Such an outcome isn’t a certainty, of course, and vigilance will be needed if Texas is to retain its reputation as an attractive place for business.

Senator Patrick e-mailed me his response Saturday to my post (6/18) defending the business tax. I didn’t notice it at the time. I will repost my six reasons why the business tax was the right thing to do, followed by Patrick’s comments. My comments about Patrick’s observations appear in italics following his points.

Six reasons
* If the Legislature hadn’t reduced the reliance on property taxes, the courts would have closed the schools.
* The property tax fell inequitably on businesses. A big box store paid lots of taxes to the state even though it might have small profit margins. A big law firm paid no property taxes to the state.
* The old corporate franchise tax brought in less money every year because of loopholes that allowed companies to reorganize as partnerships. (A commenter posted figures showing that this statement was inaccurate; however, the loopholes did.)
* The reliance on property taxes was based upon an economic model — that heavy industry was the backbone of the state’s economy — that no longer existed. Manufacturing has a shrinking share of the Texas economy. Professional services have a growing share of the Texas economy but paid little to nothing in property taxes. Consequently, oil and gas, petrochemicals, utilities, and technology plants bore the burden of the tax system.
* The businesses that are complaining now avoided paying taxes for decades. Doctors, lawyers, architects, CPAs, consultants, engineers, financial advisers, insurance agencies, real estate agencies — they didn’t need land for their businesses, just offices, and so they paid very little in local school property taxes.
* Business has a huge stake in the schools. The schools help educate and train their employees. Business ought to contribute to the cost of that education.

Senator Patrick’s response

As one of the first to appreciate the value of blogs many years ago, I’m an avid reader of many blog sites. I like to know what people are thinking. I eliminate the extremists views from all sides as their point of view is usually so biased it is not helpful to the general dialogue. I focus on what the majority of people write who are not on the fringes. I find their thoughts and opinions informative as to what many Texans are thinking on the many issues that face us in the legislature. With that said, I am going to briefly answer some of the more extreme views briefly and spend most of my response to the issues surrounding the business tax.

First, to those who like to attack me only because I’m a businessman, a radio talk host, a Republican or a conservative, let me say that you clearly do not understand my position on issues or my motives. We have serious issues facing our state which I would break down into four major categories. These four are all impacted by the most critical issue facing us, illegal immigration. As far as me not supporting the new tax because of my business that is simply non sense. Like many business owners I already pay a huge amount in taxes each year. My opposition is not about me; it is about the businesses and millions of workers in our state who will be negatively impacted by this tax. People are going to lose their jobs, or not get a pay increase or a bonus because of this tax. This is not a partisan issue, it is an economic issue that impacts everyone.

The Key Issues that this new business tax will not resolve.

Issue one is education. We have an education system that is failing our students. Only 8% of those who enter kindergarten end up with a 4 year college degree. And depending on whose stats you trust, between 35-45% of those entering the 9th grade do not graduate.

The business tax is not intended to change the education system. It is intended to comply with the Texas Supreme Court mandate to provide revenue that can be used to “buy down” property taxes and fix a school finance system that the Court said amounted to a statewide property tax.

Issue two is the property tax burden on homeowners and business owners due to ever increasing appraisals. Property taxes have absolutely no link to a person’s ability to pay. Business owners in many urban areas are facing 30-60% increases in just one year on their properties. This cannot continue.

Except when banks go crazy and make subprime loans to buyers who can’t afford to pay them off, property taxes do bear some relationship to a person’s ability to pay. Home buyers have to qualify for their loans. If your property appraisal is high, it probably means that you have an appreciating asset. A lot of the people who are complaining want to have their cake (appraisal caps) and eat it too (low property taxes). I can understand how they feel, but that doesn’t make it good public policy.

Issue three is government spending. Our state has many needs that must be met. We must always provide for children and those adults who are in true need. However, we cannot afford to do everything for everyone. Our budget was $99 billion in 1999 and last year the legislature passed a budget of $164 billion. (I voted against it.) Does anyone really believe that government runs at 100% efficiently? Of course not. The state’s portion of the budget is approximately $80 billion over two years. If we can find just 8% of waste, fraud and unneeded programs we could save over $6 billion which is the expected haul from the new business tax.

If waste, fraud, and unneeded programs are common in Texas, then why does Texas rank 49th among the 50 states in state spending per capita? Why do we have such a shortage of prison guards that we have to close sections of prisons? Why do the DPS and TxDOT complain that their computer systems are antiquated?

Issue four is the cost of health care and the shortages we are facing in that industry. Texas has the best health care in the world but it is not accessible or affordable to everyone including many hard working people in Texas. We also have a current shortage of 30,000 nurses in our state. If you get sick and have insurance there still may not be anyone to give you care in the next decade.

Even if the state leadership wanted to use the business tax to improve access to health care, or fund the schools more generously — which they don’t — the revenue can only be used for property tax relief. Republicans will not vote to raise revenue unless the revenue is used to cut taxes by a corresponding amount.

These four issues are the main issues we must address in the next session. There are many other issues we must resolve as well, crime, infrastructure, transportation and many others, but we must focus on these four key issues first. However, the biggest issue we must resolve is the issue of illegal immigration because it impacts every other issue we face.

Last year 43% of jobs in the U.S. were created in Texas and 17% of all jobs were created in Houston alone. We need workers, but we have to have control of who comes here to work. We must secure our border and secure our economy at the same time. We cannot control spending, health care or education if hundreds of thousands of illegals and their families continue to pour into Texas.

Our population will double by about 2030. That means we only have 11 sessions to address these issues. The longer we wait to take on these issues the harder and more painful it will be to solve them. Despite all of the stories and comments to the contrary, my goals are simple. I want to work with both Republicans and Democrats to solve these problems for Texas. Reasonable people can disagree on the solutions, but we can resolve these issues. I make no apology for being a conservative. I believe in conservative values and principles. I also respect others who have a different point of view, but in the end I have to stand for what I believe is best for all Texans. We need elected officials from both parties who focus on the next generation instead of the next election.

This brings me to the business tax. The purpose of the tax was to lower property taxes, fund schools and close loopholes in the old franchise tax model. This plan has turned out to be a disaster for all concerned. Property taxes will continue to increase due to appraisal creep on both homes and businesses. Schools are facing deficits over the next few years, (some are facing deficits now) and the new tax only created a new level of unfairness among various businesses.

Let’s talk about loopholes. Does anyone pay a tax they are not required to pay? I think not. If the former tax was levied only on corporations don’t blame a business for not volunteering to pay a tax if they could avoid it. Most citizens don’t volunteer to pay the IRS more. In fact most people try to lower their tax debt by using every deduction possible. I don’t call that finding a loophole. A tax is an expense for a business and most businesses try to lower expenses where possible.The idea that businesses don’t pay taxes is absurd. Many pay huge taxes on actual land and buildings. Others pay property taxes that are passed on through the rent they pay to the landlord and on their personal property each year.

The problem with this new margin tax was that is was flawed from the very beginning by creating winners and losers in the business community. There are approximately 2.5 million businesses in Texas. Approximately 750,000 paid the old tax as corporations. The new margins tax will bring in about 200,000 additional businesses. The other 1.6 million businesses are either very small businesses or sole proprietors who are not covered by this tax.

All taxes create winners and losers. The losers under the old tax structure were manufacturing and minerals. The winners under the old system were providers of professional services. Most paid no property taxes except as a portion of their rent. Yet, they are the largest segment of today’s Texas economy. Their success depends upon well educated employees. They ought to pay school property taxes.

6 Reasons why I oppose the business tax

1. The legislature could have focused on those mega companies who were not paying the franchise tax and not hit thousands of small and mid size businesses with the new tax. This tax was not about closing loopholes. This tax was about transferring the tax burden from many major businesses who paid huge property tax bills to mid and small business. The large property holding businesses thought they were going to get huge reductions in their property taxes in exchange for this new tax. In the end they were fooled as well. Many of these big companies saw their appraisals increase so much many are now paying more in tax or will be paying more in the near future.

I don’t think that this sentence is accurate: “This tax was about transferring the tax burden from many major businesses who paid huge property tax bills to mid and small business.” Former comptroller John Sharp has said that 90% of the tax revenue would be paid by the largest 10,000 taxpayers.

2. The tax should never have been due on May 15th which is only 30 days after the April 15th federal filing deadline. Accountants work 15 hour days completing those tax returns for their clients. Their clients often have to write significant checks on April 15th for federal taxes. The May 15th deadline was obviously established by those who do not understand accounting or by those who have never had to write a check to the IRS on April 15th.

In addition, the new Texas tax did not mirror the federal tax. Many deductions allowed by the IRS were not allowed by the state and vice versa. These differences created a nightmare for accountants and their clients. The new state forms were not released until late March or April for accountants to review. There are still many questions about what is and what is not deductible under the new tax. In short, it is an accounting nightmare for all concerned. I also don’t want to create another Texas agency like the IRS to audit these taxes. It won’t be long before the Comptroller is going to want hundreds of new employees to monitor this tax.

Of course the new Texas tax did not mirror the federal tax. The federal tax is an income tax. If the margins tax mirrored the federal tax, it would be an income tax. It doesn’t, and it’s not.

3. Many businesses that paid the old tax as a corporation were shocked to see their taxes increase 5 to 10 times the old tax. Many businesses saw no major impact and some saw a reduction, but many saw huge increases.The trucking industry and many service industries saw big increases due to the unfair treatment of deductions between industries. e.g. a trucking company cannot deduct for contract drivers. A company can deduct for shipping costs into their business but not deduct for the shipping costs to their customers. This new tax is filled with inconsistencies, confusion and unfairness.

4. The threshold for businesses that should pay the tax should have been much higher. Businesses that don’t owe the tax should not have to file the paperwork. Those businesses are small and should not have to pay an accountant to file a report that says no tax due. And businesses that don’t make a profit should never have to pay the tax. I have a constituent that lost $8,000 last year and owes $5,000 for the new tax plus his accounting fees.

It is not unusual for tax liability to occur in the absence of a profit. In fact, there is only one tax that, if you don’t make a profit, you don’t have to pay it. That’s an income tax. Every other tax — excise taxes, property taxes, sales taxes, gross receipts taxes — you have to pay whether you make a profit or not.

5. Anyone who does not own a business likely works for one that will pay this new tax. All business taxes will either be passed onto the consumer or the employee. So, anyone who thinks this is a good idea should remember they will likely end up paying the tax in the end. I know of companies that suddenly are facing taxes of $25,000 to $100,000 more that last year. They may choose not to hire a planned employee, cut or reduce their planned pay increases, reduce company bonuses or buy something from another business for their business. We are seeing a 6 billion dollar or more transfer of money from the private sector to the government.

The business tax transfers money both ways. It raises an estimated $6 billion, but that money doesn’t end up in government programs. It is used to reduce the property tax rate. Not one penny goes to grow government.

6. Before establishing a new tax we must first look at reducing spending where we can. If we need additional revenues we should focus on increasing and expanding the sales tax. 55% of our state tax collections come from sales taxes. Our population is going to double in 20 years or so and this is the best way to increase our revenues. We can protect the poor from this tax and protect the necessities of life from an expanded sales tax. Every penny increase is worth about 3 billion before expanding it to other goods or services. The fairness of a sales tax is that it is based upon a person’s ability to pay. Property taxes on your home or business or this new business tax is not based upon the ability of a person to pay the tax.

I’m not sure what Senator Patrick means by “an expanded sales tax.” If he means that he would expand the base of the sales tax — by taxing services and by repealing exemptions — he is entering dangerous territory. The professional services sector of the economy would rather have an income tax than an 8.25 add-on to their billings that would put them at a disadvantage to service providers in other states. As for exemptions, there is a reason for them. Some are political (does anyone want to vote for repealing the exemption for household electricity?) and some are economic (the exemption for industrial machinery is designed to attract business to Texas; most states have a similar provision).

Businesses are facing a perfect storm of skyrocketing property appraisals, increased fuel costs and the new margins tax. Many businesses are seeing their cost of doing business increasing at amounts they simply cannot sustain for very long. The last thing the state should be doing is adding to the burden of business. Small and mid size business employ about 80% of the workers in our state. The vast majority of businesses are not owned by selfish or greedy owners. they are owned by people who work hard everyday just trying to survive.

In summary, there are only three major ways to fund government; property taxes, sales taxes or income taxes. Texas has been a great environment for business and I want it to stay that way. History has proven that the best environment for business is a low tax environment. The business tax is not about business of any size, it is about you, your job and your future. Our current system of property taxes providing funding for our schools will put people out of their homes and businesses. I want a person to be able to pay off their home and afford to live in it when they retire. I want business to prosper creating jobs for a growing Texas. If we do not repeal this tax and find a better way to fund education and all of our needs, Texas will one day find itself in the position of another big state, California, which is broke and facing massive cuts in government services and an exit of citizens and businesses.

I appreciate Senator Patrick’s comments and views. I’m sure that the business tax could stand some tweaking. But I think we have to recognize that the reasons the tax became law are (1) the Supreme Court was holding a gun to the Legislature’s head, and (2) this tax was, to paraphrase Churchill’s observation about democracy, the worst possible system, except for all the others.

The sample was 1,000 adults, including 32% Hispanics, out of which there were 478 likely voters (registered; voted in every, or almost every election; and were at least “somewhat interested” in the upcoming general election). The likely voters were evenly split between Republicans and Democrats.

Ralph Nader and Bob Barr, the Libertarian candidate, were also included in the presidential poll. All candidates were described by their affiliation. The margin of error was 4.5%.

The poll was conducted by Darren Shaw, associate professor of government at the University of Texas. Neither Obama nor Noriega had significant crossover appeal. Only 6% of Obama’s support came from Republicans, and only 3% of Noriega’s. The hard numbers in the Senate race were Cornyn 39%, Noriega 37%, which leaves a large undecided of 24%. Shaw told me that roughly half of the independents were undecided in the Senate race.

The presidential poll seems credible to me. In fact, McCain by six points is exactly the number that a prominent McCain booster told me recently he thought that the actual outcome would be. Noriega by two is more problematic, but overall, these numbers, with the people who have made up their mind in both parties representing about three-fourths of the respondents and the rest being undecided, seem a lot more credible to me than the earlier polls that showed over 90% of the electorate committed (48%-44%).

I had an interesting conversation with Professor Shaw after he went over the numbers. I asked him how confident he felt about the accuracy of polls these days. His answer was that polling is “increasingly problematic.” The problems are cell phones, caller ID, and unwillingness to participate. The typical response rate for a poll is about 15%. To drive the response rate up, you have to use multiple call-backs, which increases the cost of a poll. Because young people use cell phones rather than land lines, all polls tend to undersample younger voters. Young minority voters are the hardest group to poll, Shaw said.

He believes that telephone polls will eventually be replaced by online polls. Already there are companies that are building large data bases of likely voters — a couple of million. One will supply people who don’t have a computer with a laptop in return for their participation. The obvious flaw here is that the sample is not random. I have been very critical of Zogby’s online polls for exactly that reason. Zogby sends e-mails asking if you want to sign up to be polled. I signed up, and I participate regularly. But I don’t think that this methodology is trustworthy.

From the Wall Street Journal web site:

WASHINGTON — Louisiana can’t put a man to death for raping his young daughter, the U.S. Supreme Court ruled Wednesday by a vote of 5-4.

Justice Anthony Kennedy wrote the majority opinion in the child rape case that the Eighth Amendment to the U.S. Constitution, which prohibits excessive punishment, does not allow the death penalty to be used unless a death is involved.

Texas Attorney General Greg Abbott argued vigorously for the opposite view. I will elaborate more on this decision later today.

The hot topic of the last few days has been the Littlefield poll in the race between Juan Garcia and Todd Hunter. As it happened, I had an appointment scheduled with a Democratic strategist on the day the poll appeared, and we talked a lot about this race. Subsequently, Christian Archer, Juan Garcia’s consultant, issued a memorandum debunking the Littlefield poll. Clearly, the Democrats think Garcia is going to win this race. I think they’re wrong. But first, let’s give Archer his say (in italics):

It was not my wish to formally respond to Mark Littlefield’s poll of our district. First, because it was simply never a credible poll in the first place. Second, politically speaking, I do not believe it’s in our campaign’s best interest to respond to non-credible third party attacks. That said, it appears that this issue has taken on a small life of its own and provided the gift of hope and a very small amount of media attention to Todd Hunter’s heretofore bumbling campaign.

• The cross-tab for San Patricio County is preposterously out of whack. In 2006, Garcia beat Gene Seaman in that county by 13.7%. In this poll, Todd Hunter—who didn’t even represent San Patricio County when he was in the Legislature (12 years ago!)—has miraculously opened a 13-point lead over Garcia. The key word here is “miraculous.” For political reasons too countless to even mention in this memo, this is not in the realm of human possibility. End of story.

I don’t think I have ever met Christian Archer, but my reaction to the memo to this point is that this is not the way grownups write. And it is not the end of the story.

• This is an IVR (Integrated Voice Response) poll. That basically means that it was conducted by a computer hooked up to an auto-dialer and that anyone with the physical capacity to pick up and press the buttons of a telephone would be able to participate. I will not enter the raging debate on IVR polling and its effectiveness in general, again, because I am not a pollster. What I do know is this: The only thing that has been widely agreed upon by both sides of the IVR debate is that it is not reliable until very near the finish of high awareness elections. Regardless of what the political situation in the west wing of the Austin Capitol may be, the race between Todd Hunter and Juan Garcia has not achieved the level of high awareness in the lives of District 32 voters today. As such, this is simply not a credible representation of the race as it currently stands.

The best article about automated polling versus traditional polling appeared in Slate, the online political journal, after the 2004 election. You can read it here. For a more recent discussion, by a North Carolina IVR polling firm, click here.

• In the district as a whole, not even close to 46.38% of district 32 voters would know Todd Hunter if he bumped into them on the street. Also, not even close to 46.38% of the voters of District 32 would land in the category of “generic Republican.” And if you add up the number of people that do qualify as “generic Republican” to the number of people that would know Todd Hunter if he bumped into him on the street, it still wouldn’t add up to 46.38% in the June before the first November election that he’s run in since the Cowboys were winning Super Bowls. This trend is even more relevant in the county by county crosstabs. Witness, again, San Patricio.

It is of no relevance that voters would or would not know Todd Hunter if they bumped into him on the street. They read the Corpus Christi paper. They see Corpus Christi TV. They have been exposed to the names of the two candidates. That’s all that matters.

This all points back to the fact that Mark Littlefield is no more a pollster than I am an astronaut. That’s made abundantly clear in his first public work here. And while I would normally refrain from ad hominem lines of political debate, I feel that in this one incredible case that it’s relevant to the issue at hand. Before his re-emergence on the political scene with this poll, Mark was fired by the last two campaigns he worked for because of what can generously be described as “unethical business practices.” During his last basking in the limelight of political relevance, he was narrowly regarded as a field guy. The last time that he was featured prominently in the news was “for his role overseeing a petition drive marred by suspected forgeries and irregularities” (“Election Probe,” San Marcos Daily Record Daily Record, June 11, 2008)….

Archer’s argument comes down to this: (1) Garcia won San Patricio county by 13.7% in 2006 and the Littlefield poll now shows him trailing in that county by 13 points against an opponent who has never been on the ballot in San Patricio County. (2) Integrated Voice Response polling is a controversial methodology. (3) The pollster has a bad reputation. (Archer’s memorandum also said that Littlefield had miscalculated the margin of error.)

I don’t think that the 2006 race is an accurate predictor of the 2008 race. While Archer is undoubtedly correct that Hunter is not well known in San Patricio County, Hunter was recruited by Tom Craddick and will have all the money he needs to make a strong race. Garcia’s Republican opponent in ‘06 was incumbent Gene Seaman. Seaman was one of several incumbents who ran into ethics trouble over using campaign funds to pay rent for a condo to a spouse. He had also aroused the ire of constituents over a local tax issue. He was a damaged incumbent in a Democratic year. Garcia beat him by 767 votes. Hunter, on the other hand, is well known in the region. He served previously and was a solid, if inordinately cautious, pro-business conservative Democrat who has now switched parties. He is a much more formidable opponent than Seaman. This is a different race, and Garcia’s margins against Seaman are of little predictive value.

San Patricio is a Republican-friendly county. In 2006 it went for Rick Perry over Chris Bell, 5,057 to 4,208, or 38% to 32% (with Strayhorn and Friedman getting the rest). A little-known Republican challenger to Democratic congressman Solomon Ortiz out-polled the controversial incumbent, 4,282 to 2,618. This year, the Republican tax assessor, an Hispanic Republican, is running unopposed for reelection. Aransas, the northernmost county in the district, is even more Republican than San Pat. It voted for Perry over Bell by more than two to one (3,051 to 1,349). Seaman ran way behind the ticket here, winning edging Garcia by 3,204 to 3,028. How does Garcia do as well in a presidential year?

I’m not shilling for Hunter here. I don’t think he belongs in the Legislature. He has been a registered lobbyist as recently as 2007. He’s going into the revolving door the wrong way. Is he going to be like certain other lobbyists of recent vintage, who went on the public payroll and let law partners collect their retainers and fees? I think it stinks to have a lobbyist in the Legislature. But the D’s are going to have to do better than rely on a repeat of Gene Seaman’s race if Garcia is going to win.

This is the first paragraph of Cornyn’s release earlier today:

Senator John Cornyn’s campaign called on Rick Noriega to support G.I. bill improvements approved overwhelmingly by the U.S. House last week. The measure now includes transferability of education benefits, allowing Armed Service members to transfer unused benefits to their spouse and/or children. It is an improvement long sought by Senator Cornyn and opposed by Noriega.

What’s going on here? Noriega has centered his campaign on his military service and on supporting veterans. He has strongly criticized Cornyn for opposing the version of the G.I. bill sponsored by James Webb (D-Virginia). Webb’s bill offered more benefits for G.I.’s than a grinchier Republican version sponsored by John McCain (R-GOP ticket). The White House and the Pentagon got really bad press for opposing Webb’s bill, arguing that the higher level of benefits would provide G.I.’s with an incentive to leave the military — the implication being that lower benefits would make them stay in. So how did Cornyn, who voted against Webb’s bill, end up looking like the G.I.’s friend, instead of Noriega, who voted for it?

Poor Noriega can’t catch a break. The Democratic House of Representatives did him in. As Cornyn’s release indicates, the main difference between Webb’s bill and the approach favored by the White House and the Pentagon, was “transferability”: allowing family members, as well as the G.I.’s themselves, to use the education benefits provided in the bill. Webb’s bill provided a higher level of benefits but no transferability. The House voted overwhelmingly for a typical election-year “compromise”: It gave G.I.’s everything: the higher level of spending AND transferability. The Democrats were not going to get caught opposing the troops, and the Republicans were not going to get caught defending the White House. The House vote let Cornyn off the hook for voting for the lower level of benefits — and provided an opportunity for a finger-wagging press release aimed at Noriega.