State & Local News Vol. 20, No. 3, Spring 1997 Washington's Labyrinthine Ways By Otto J. Hetzel Otto J. Hetzel is an emeritus professor of law at Wayne State University and practices law in Washington, D.C. The Power of Incumbency Demonstrated in November's Election. With President Clinton's reelection and continued control of the House and Senate by Republicans, the advantages of incumbency were again shown. It would appear that the ability to raise monies for reelection and the opportunities available to an incumbent to enhance name recognition continue to be important elements in almost all races. These factors and not the media-generated analysis that voters wanted a split of power between President and Congress seem more likely to have been decisive factors. Few incumbents were defeated, although the difference between Democratic rather than continued Republican control of the House was apparently only 11,598 votes in ten races that would have given Democrats the majority, according to a calculation by the congressionally focused newspaper, Roll-Call. The impact of campaign financing on elections and the lengths that candidates will go to accumulate funds will be one of the central focuses of the 105th Congress. Campaign Fundraising Hearings. Hearings will be held in both the House and Senate on the relationships between campaign contributions and access to federal candidates. At first, the focus was on White House events. The list of those who stayed overnight with the President, Lincoln bedroom or otherwise, has now been released both for Clinton and Bush, with the former hosting three times as many guests. One quip heard was that perhaps the Clintons were just more sociable and congenial and, thus, had more friends than the Bushes. Only one-third of Clinton's overnight guests apparently were substantial contributors. So much for the pulling power of an overnight stay. The hearings are likely to expose much of the grimy role that money plays in politics, as unseemly examples are daily revealed. An issue for the Senate hearings is whether the committee will inquire into similar issues with respect to use of fundraising events that provided access to members of Congress not just the President. Examples of campaign funding raising that promised access to the Republican congressional leadership have already surfaced. The Potential for Controlling Political Fundraising. Federal control over fundraising may yet have its day. In addition to exposing the roles of the Democratic and Republican National Committees in funneling "soft money" to candidate campaigns (allowing for relatively unlimited contributions so long as not directly to the candidates ), the crass specter of contributions in return for access to White House events and to meet with congressional leaders has already surfaced. The latter include events for such groups as the "Committee of 100," denoting Republican big spenders (contributors of at least $100,000). Investigations into contributions that provided access to members who made themselves available to big contributors at special events, providing opportunities for presentation of private legislative agendas, are likely to occur, as well. Once Pandora's box has been opened, it would appear that such revelations have the potential of spreading the embarrassment to almost all office holders. Thus, considerable reluctance to extend the scope of the hearings to members is likely. Attempting to restrict the scope of the hearings are likely to engender cries of "coverup," however. Committee Chair Fred Thompson (R-Tenn.) has taken the high ground, demanding hearings include practices of members as well as the White House. The real question is whether this exposure of campaign funding practices will generate a public groundswell for a new system of financing federal political campaigns. Incumbents who have advantages in the current system are reluctant to abandon what has worked for them. When and whether revisions in campaign funding will actually come before the Congress is not yet clear. Senate Democrats have threatened to filibuster funding for the committee hearings unless a date certain is set to consider campaign funding reform. Most members truly dislike the need to raise funds in the manner now required, and voter reactions to current practices may force changes as occurred when abuses of honoraria to members were publicly aired. Increased Pressures to Raise Campaign Funds. The need of members for contributions to stay competitive is increasing. New campaigns start the day office holders are sworn in; many even hold celebrations for key contributors, constituents, and friends immediately after taking the oath of office. With the success of Clinton's early start with TV advertising last year, well before the normal Labor Day kickoff for last fall's campaign, pressures to raise money will be heightened. What seems ironic is that the major reason to raise funds is to pay for ads on publicly licensed TV; in effect, political campaigns provide a lucrative source of revenues for the networks, which are provided government licenses to use the public airways. Substantially all funding now raised for most races goes for TV ads. So, one can look on our current political funding system as simply providing a very profitable source of revenue for the TV industry. That might be one place to start changing the system through legislation to allocate free or low-cost time to candidates on the public airways. Imposing such costs on the TV industry, i.e., biting the medium that provides the message, will require a good deal of intestinal fortitude on the part of Congress. Term Limits Die in Congress. Once Congress re-organized itself in January and February, it turned to legislative business. It should be no surprise that the fervor has abated for a constitutional amendment to impose term limits on members of Congress. The vote was 217-211, sixty-nine votes short of the two-thirds required for an amendment and ten votes less than last year. Self-interest in public careers for the new majority seem to have prevailed, supported by arguments against limits that have received new credibility with the changing nature of Congress. In essence, imposing term limits inherently disrespects voters, and restricts their choices. Tenure, not effectiveness in office is determinative. Over the last three elections, there has been a significant turnover in members of Congress; over half of the current House members were not in office six years ago. Incumbency has its advantages in being reelected, but redistricting and population changes have had some impact, and for others the lure of congressional office has been diminished. Many electable, experienced members have called it quits, and others have gotten off the campaign treadmill and retired before risking defeat. Thus, between retirements and redistricting, much the same results have occurred without term limits constraining voter choices on who they want to represent them. The First Priority: Balancing the Budget. The spirit of bi-partisanship has been blowing up and down Pennsylvania Avenue. Both the President and the Republican congressional leadership have made commitments to a bi-partisan effort to balance the budget by the year 2002. The President has submitted his version, but the Congressional Budget Office contends he will still be over $60 billion short by 2002, unless he cuts benefits further. The CBO noted that 98 percent of the savings would be subsequent to 2000, after Clinton leaves office. Republicans have not presented their proposal yet, and until they do, real negotiations to reach an acceptable compromise are unlikely. Senate Majority Leader Trent Lott appears to be taking a less partisan approach than in the House, lending some hope that despite the contentious portent of the campaign financing hearings, there may be a basis to reach consensus on a five-year balanced budget measure. With failure of Republicans in early March to obtain the sixty votes to approve a balanced budget amendment, a bipartisan consensus may be the only option for Republicans. It will be interesting to see how the five-year balanced budget legislation will affect the fiscal year 1998 budget negotiations, now under consideration. A budget resolution is due from Congress by April 15. It is unlikely that Congress will want to repeat the budget impasse of two years ago, but clearly major political differences in emphasis exist. Circumstances are different in another way, because the President now has line-item veto power, allowing him far greater opportunity to shape the final budget product. While it is true that legislation can contain the phrase, "notwithstanding any other provision of law," and thereby escape from the line-item powers of the President, that approach has obvious limits to it. Congress may yet regret its increase of presidential powers in this regard. Change the Ruler If You Can't Reduce the Size of the Budget. The President, after deriding Congress for its attempt to change the Consumer Price Index (CPI) during the last election, has now bought into changing the standard that measures inflation and thus has the potential to reduce inflation-linked entitlements and tax deductions. The chair of the federal reserve system added his support to a special commission to make the index more accurate, echoing support from Majority Leader Trent Lott. A number of economic experts have contended that the CPI overestimates increases in the cost of living; the report of the Boskin Commission, maintained by from .8 to 1.6 percent annually. Such an overstatement could add $1 trillion unnecessarily to government expenditures. By no means is there agreement among economists that the current index overstates inflation, however. Any change in the measuring device could impact local governments and almost everyone whose government benefits are index-linked. If an adjustment that would make the index more accurate can be agreed to, it could help hold down social security and medicare increases and aid in achieving a balanced budget by 2002. Housing a Potential Casualty of Reductions to Achieve a Balanced Budget. It is apparent that the Clinton Administration's expressed priority for budget reductions is likely to mean reduced federal housing and urban program expenditures, one of the discretionary rather than entitlement segments of the federal budget. For states and local governments, the attractiveness of reductions in federal controls and regulations now being proposed is likely to come with a bitter pill in the end: lack of long-term funding commitments for the programs they take over from the federal government. Domestic spending is likely to continue to receive the lion's share of reductions. Based on the President's February 6 budget plan for the next five years, most HUD programs such as Community Development Block Grant (CDBG), HOME, and public housing operating subsidies would be reduced to cover annual increases in section 8 rental assistance (subsidy) contracts. Thus, while the overall HUD budget would increase by $5 billion in fiscal year (FY) 1998, to cover expiring section 8 housing subsidies, thereafter other HUD programs would apparently be expected to absorb increases in section 8 subsidies. Terming the section 8 problem, the "greatest crisis HUD has ever faced," recently confirmed HUD Secretary Andrew Cuomo has taken on the unenviable task of attempting to support before a budget cutting Congress, a 30 percent increase in HUD expenditures for FY 1998. Pointing out that 6.4 million residents of federally subsidized units would be put at risk between now and 2002 if the subsidies are not forthcoming, Cuomo noted that 4.4 million persons, 90 percent of whom are elderly, disabled, or families with children, could be affected in FY 1998 because of the number of current section 8 contracts that will expire this coming year. In most of the affected families, one person works, is in job training, or is enrolled in an educational program. If HUD's other programs had to absorb the section 8 costs this year, cuts of 35 percent would be required in those other programs. This would have a devastating impact on urban areas throughout the country. Food Stamps Cutoff for 100,000 Jobless Adults. The first of the cutoff dates for welfare recipients hit on March 1, with some 100,000 childless adults under fifty without jobs, losing access to stamps worth $120 monthly. These persons have now used up their three months of food stamp eligibility in any three-year period. By year end these numbers will total 1 million. Those affected will need to find work to survive, but jobs for this group are difficult to find. States may request federal exemptions in areas of high unemployment. Secondary impacts also seem likely, with sales falling off, reduced profits, and possible economic failure for food market owners in urban neighborhoods normally servicing food stamp recipients. Food stamps will also be unavailable for five years for new immigrants under the legislation enacted last year. Initial reactions in Congress have been negative to attempts by the Clinton Administration to obtain congressional approval to modify provisions relating to food stamps in the welfare law just enacted. It is also unlikely that much in the way of change in other draconian reductions in welfare benefits enacted just before elections last year will actually occur. Increased HUD Operating Subsidies Needed As Welfare Cutbacks Start To Reduce Local Housing Authority Income. An anticipated effect of cuts in welfare benefits will also be loss of tenant income to local housing authorities operating low-rent public housing programs. Since HUD is to make up the difference between operating costs and rent received from tenants, lowered tenant income translates into lower rent receipts and the need for more federal subsidy. The irony of transferring welfare cost-reductions on HUD's budget was obviously not fully understood in the heat of enacting the welfare changes last year. Since rent is calculated in public housing at 30 percent of tenant income, HUD will replace only 70 percent of it. Increased payments from HUD, of course, still must rely upon Congress providing more funds as the need grows. That this will happen is by no means sure. The Clinton Administration budget has proposed only to maintain last year's level of funding, even before Congress considers the issue. As the welfare impact is felt, it is also likely to affect section 8 incomes that also commit HUD to cover the difference between 30 percent of tenant income and rent levels established under federal law. Your correspondent