In December our family welcomed an unplanned addition – two baby red eared sliders (aquatic turtles). Nature has programmed these timid creatures to paddle furiously in any direction at the first hint of danger or surprise. It doesn’t seem to matter which direction they are headed, even if it means trying to swim through an obstacle at full speed. The objective is simply to paddle as fast as possible. Reflecting on this, it occurred to me that Congress is filled with a bunch of red eared sliders, who paddle as fast as they can without regard to where they are going. They have evidenced this numerous times in the last year, but none more thoroughly as in the case of AIG.

Consider…

September 2008. American International Group (AIG), a huge insurer, was on the verge of bankruptcy and had been shopping for government assistance. The federal government had just allowed financial powerhouse Lehman Brothers to collapse in bankruptcy. Claiming AIG was “too big to fail,” the feds drove a hard bargain, lending AIG $85 billion in exchange for an 80% equity stake in the company.

October 2008. AIG fails to respond to the federal rescue as had been hoped and the government decided to dispense another $48 billion. In a telling statement, a government representative indicated that the feds felt this additional infusion was relatively low risk. Then again it is always easy to see any bet as low risk when you are not betting with your own money.

November 2008. The federal government’s second attempt to rescue ailing AIG also failed to stabilize the company. Convinced they were “too smart to fail,” members of Congress and the
Executive Branch increased the rescue package to $150 billion and eased the terms of the bailout.

March 2009. Realizing that the feds still had not committed enough money to their rescue, AIG successfully petitioned the current administration to raise the country’s stake to $173 billion.

As the government reset their investment in AIG four times over four months, a series of mini-scandals hit the press as AIG executives enjoyed a 5-star get away on the taxpayer dime and sent their bailout money to foreign banks and other companies. By the fourth time around, staffers for the House of Representatives figured they ought to do a little more to protect the federal investment. One of those protections included a limitation on executive and key employee bonuses.

Funny thing happened on the way to the forum, though. It seems key government officials thought it wasn’t such a good idea after all and had the language removed from the fourth bailout bill. Never finding it too important to read, understand, or debate trivial things like bills that expend billions of dollars, the House passed the fourth bill without exercising any due diligence.

And surprise, surprise, AIG paid out $165 million in executive and key employee bonuses. No big deal, at least until the press starting raising a stink and we the people got in a huff about a failing company paying out mega-bonuses that were funded with tax-payer dollars.

Feigning disgust and abhorrence, the House raised up in righteous indignation, slapping AIG bonus recipients with a punitive and retroactive 90% tax on those bonuses. Fake indignation, however, was not enough to wash these stains off of Congressional hands. To fully cleanse themselves, Congress and administration officials had to ensure that allowing the bonuses in the first place was someone else’s fault.

First it was the Senate’s fault; they must have taken out the ban on bonuses. Then more particularly, it was Senator Dodd’s (chairman of the Senate banking committee) doing. At first, Dodd denied any involvement, but then admitted some culpability by claiming that the White House had demanded the bonus ban be removed and he was compelled to join them. Then, apparently, it was Geithner who had pressured the White House to make the change. For observers, this became a blame game fiasco with initial denials, partial confessions, and circular finger pointing.

Even in its indignation, the House of Representatives never fails to disappoint its detractors. With a growing reputation for not caring overmuch about the truth, accurate analysis, deliberation, or unintended consequences, the House’s punitive 90% tax on AIG bonus recipients appears to fail even the most basic of standards: constitutionality.

The bill passed by the House of Representatives would likely face constitutional challenges in four areas: 1) a bill of attainder (legislation directed at punishing particular individuals) is forbidden by the constitution; 2) ex-post facto laws (laws which make an activity illegal after-the-fact) are not allowed; 3) substantive due process (protection against the state preventing the fulfillment of lawful contracts) is protected by the courts; and 4) the takings clause argues against the taking of private property without appropriate compensation.

So let’s recap the government’s failings:

• In a mad rush, Congress and the President threw together a rescue package to save a company they deemed was too big to fail. Too big to fail, but not so big they had to do it right.
• The lack of analysis and deliberation forced the government to throw more money at the AIG problem three more times, each with minimal or no deliberation.
• Given an evolving track record of AIG misusing rescue funds, House staffers crafted language to prevent the misuse.  Senatorial and administration colleagues gutted the language.
• The House did not read the final language of the bill, but rushed the legislation through, not realizing that their objectives had not been met.
• When the press and the public cried foul about the AIG bonuses, the House looked incompetent or corrupt, and went into damage control mode. They pretended indignation, beat their chest, and got tough, hoping that they would be absolved of all charges before the next election.
• The House passed a law to punish AIG for giving bonuses they were contractually obligated to award – a law that many consider completely unconstitutional.

After all the bravado and decisive action from the House, the Senate and the White House quickly distanced themselves from the punitive bill. By the time the Sunday talk shows exposed the House’s lunacy, the House itself quickly backed down from their position and let the bill die a very quiet death.

At times like these, we should pause to reflect (in gratitude) on the wisdom of the founding fathers. They foresaw that the House of Representatives would be populist in nature, blowing in the wind of public opinion (paddling as fast as they can whenever they are startled) and established the Senate to be a more deliberative body that would resist reactionary populism in favor of reason and deliberation. Doesn’t always work but it certainly did this time.

Since nature did not equip the red eared sliders with reason, just a flight instinct, and since Congress seems to be similarly equipped, it is left to us to shape their environment so they react to us (the people) in a way that benefits the nation. Since they won’t/can’t do the right thing, we must. And we do this by getting involved in the public debate. When we do, our congressional red eared sliders will begin paddling when we want them to and will paddle in the direction that we want. We need to guide them with our collective voices.

Epilogue:
With all of the hullabaloo the AIG bonuses, I’ll bet you haven’t heard a single word that failed Fannie Mae and Freddie Mac (also newly nationalized entities) have been approved to dispense more than $200 million in bonuses. Not a peep from Congress or the press. Makes one wonder about the depths of hypocrisy?

Following on the heels of massive stimulus and bailout plans, Congress has voted to give the government an 8.7% spending increase. Last fall, the Democratic Leadership in Congress approved a government budget for only half of the year (the government’s fiscal year runs from October through September), hoping that Barack Obama would be elected and that he would be more open to increasing annual government spending. For the Congressional Democrats, this bet paid off.

With only a half-year’s budget approved, the federal government is set to run out of money this month unless a budget for the remainder of the year is passed by Congress (which just happened) and subsequently approved by the president (which he will sign soon). Given the tax and spend history of the Democratic Party, it is no surprise that government spending is increasing much more than inflation and much more than can be justified in an economic environment where everyone else is tightening their belt.

Conservatives, by definition, advocate for less government, because the cost of bureaucracy is a heavy burden on the people and this burden directly limits their prosperity. So, it is no surprise that conservatives find such spending increases both unwarranted and harmful to the people of this country.

By its very nature, taxation is coercive: the government demands money from its constituents under the threat of force – you don’t pay and you are fined and sent to jail. Few would argue that this is an abuse of government power. In fact, it is a necessary evil for any functioning nation. That said, those wielding this power have a moral obligation to be wise and prudent stewards of government revenues (money taken from the pockets of fellow citizens). Unfortunately, too many elected officials have come to believe that all money belongs to the government and that the government should decide how much the citizenry really needs.

To be fair though, not all the blame can be laid at the feet of the Democrats. Under President Bush, spending also increased imprudently. Many pundits gave Congressional Republicans a bye, assuming they had voted for the spending out of a political obligation to support the leader of their party. Theoretically then, the shameful increases in government spending could be blamed on Bush – until this week anyway. Republicans offered little resistance to the spending increases and, more offensively, joined whole hog in pork spending (pun intended).

Included in the Omnibus Spending Bill (the official name for the government budget), were 9,287 pork projects at a cost of nearly $13 billion. As a reminder, pork (also known as earmarks) is a congressional tool used to fund pet programs and projects while protecting funding allocations for serious scrutiny. Most of the time, earmarks are used to reward supporters and improve an official’s odds of reelection. However, knowing how offensive the citizenry finds this practice, both Obama and McCain campaigned on eliminating such practices.

While the nature of earmarks limit scrutiny, reports indicate that 60% of the earmarks in this half-year budget are attributable to democrats and 40% are attributable to republicans. Indeed, 6 of the top 10 pork spenders are Republicans. Given the ratio of Democrats to Republicans in Congress, both parties appear to be equally guilty in fleecing the American People. Once again, Congress demonstrates that preservation of power and privilege trumps their concern for their country.

Following is a very brief sample of this bill’s pork spending:

• $332,500 to build a school sidewalk in Franklin, Texas
• $225,000 for Everybody Wins!
• $200,000 for a tattoo removal program in Mission Hills, California
• $190,000 for the Buffalo Bill Historical Center in Cody, Wyoming
• $237,500 for theater renovation in Merced, California
• $1,049,000 to combat Mormon Crickets in Utah
• $238,000 for the Polynesian Voyaging Society in Hawaii

For a larger sampling, please visit Heritage.org.

For me, the most important lesson is that there are far fewer authentic conservatives among congressional Republicans than many people thought. Increasingly, it seems that the “Republicrats” run Congress. Whether Republican or Democrat, members of Congress are all about what is in it for them and have precious few principles that they both espouse and adhere to. The silver lining, though, is that we have a much better idea about which self-proclaimed conservative Republicans are imposters. For these, their constituencies deserve better and should elect truly conservative candidates during the next round of congressional primaries.