Bailing out British Booze: Charlie Rangel, Max Baucus, and Diageo

The recent ruling of the House Ethics committee against Charlie Rangel has attracted a tremendous amount of attention and has put substantial pressure on House Democrats, especially Nancy Pelosi. The Atlantic’s Marc Ambinder even reported one Democratic strategist claiming that it “loses us the House.” The basics of the story are that Rangel and his staff failed to disclose a series of facts about corporate sponsored trips about Caribbean policy.

However, there’s another Caribbean scandal that could burn Democrats. In February, Pro Publica’s Marcus Stern reported that Congress and the Virgin Islands will give British alcohol conglomerate Diageo a $3b subsidy if they shift production from Puerto Rico to the US Virgin Islands. Previously, I had written about this issue, including Rangel’s threats against the Puerto Rican health system.

But now an ad, pictured here, is running in Montana asking Senate Finance Committee Chair Max Baucus why he is putting up with this. That’s turning up the heat a little.

Another rum producer told the Billings Gazette that the subsidy “is so large it’s twice the cost of production.”  That is, if Diageo spends $100 making rum in the Virgin Islands, they get $200 from the federal government. Then Diageo gets to sell the rum too! Diageo’s 2008 operating profit was £2.2 billion and 2009 sales were $20 billion.

Now, I understand — disagree but understand — US taxpayers giving struggling American farmers a subsidy to make ethanol. (rum is also ethanol) I don’t understand why US taxpayers are giving billions to an already highly profitable, publicly traded British booze company.

You would think at a time with record deficits, historic unemployment, etc. Congress could find better things to do with $3b than boost profits of a foreign company. Or they could even end the excise tax on rum that funds this boondoggle. But I guess not. As the ad says, the Congressional Democrat are letting the “pirate lobbyists” win.

Red states gaining, but beware of resting on laurels

I highly recommend the book How Congress Evolves by the late Nelson Polsby to any student or practitioner of politics. Polsby documents the interplay between Congressional rules, demographic shift, and partisan realignment. The essential fact was that Southern congressional districts fell to the Republicans as a result of southern migration from the traditionally Republican Northeast and Midwest. (Polsby points to the rise of residential air-conditioning and military-industrial complex) The first seat to go reliably Republican was in St. Petersburg, FL. Gradually, the loss of conservative Southern Democrats shifted the Congressional Democratic Party to the left. Gradually, a more liberal Democratic Caucus changed House and Caucus rules to force conservatives to concede, retire (usually handing seats to Republicans), or switch parties.

Winners Losers
Texas +4 Ohio -2
Florida +2 New York -2
Arizona +2 California -1
North Carolina +1 Massachusetts -1
South Carolina +1 New Jersey -1
Georgia +1 Pennsylvania -1
Utah +1 Michigan -1
Nevada +1 Illinois -1
Oregon +1 Minnesota -1

It is with that context that I look at a post by Brian Faughn over at the Weekly Standard. His thesis is simple:

The New York Times reports that while the subprime mortgage crisis has slowed the population shift away from states such as California, New York, New Jersey, and Massachusetts, the trend for the decade is clear: the red states are gaining people and electoral votes while the blue states are losing them

With the conclusion:

This would represent a shift of eight seats from Kerry states to Bush states. A Democratic candidate who held all of Kerry’s states would also need to win Florida, or a similar combination of smaller states, to gain the presidency.

I quibble with his language here. He says "a shift of eight seats" when it is really a shift of eight electoral votes. And that’s the rub. I have two points that I significantly differ with him. The first is that I wonder who actually fills those seats. The second is captured by his caveat, "states change character and become more or less competitive for parties over time."

First, who fills the seats. Let’s take the states one at a time. Based on Polidata projections, Brian lists the states that win and lose. While I only have specific knowledge about some of these states, we can do some rough estimates. It seems that a large source of migration into Texas is Hispanic which is still significantly Democratic. It seems that the Texas seats would go GOP/Dem 1/3 or 2/2. The growth in Florida is in South Florida, which went substantially blue in the last election. Perhaps a split, although gerrymandering could result in a 0/2 GOP pickup. Arizona is unclear to me. Most of the Southern states are likely to be GOP pickups.

Out West, it is probably a different story. My gut is that Nevada’s seat goes blue or we lose Rep. Jon Porter (R)’s suburban Clark County seat, resulting in a wash. It is hard to imagine that Oregon’s growth is somewhere other than the Portland area, which we lose. Utah is, of course, the exception.

Looking to the states that lose seats, it is actually kind of grim for Republicans. Clearly we lose the California seat because of redistricting. There is no seat to lose in Mass. We will lose the Illinois seat because the partisan gerrymander will combine two GOP suburban districts. Michigan is also a highly gerrymandered state that over-performs GOP at the congressional level, not to mention the strong possibility that we lose MI-07 this cycle. New York lossage is almost certainly from upstate, and there is a strong chance that we lose the state senate by 2010, which could create the circumstances to lose more than 2 seats. Pennsylvania is another state with a strong partisan gerrymander that will likely be broken by a Dem governor and state House.

The upshot is that who fills the seats is, at least, mixed.

Second, the issue that "states change character." The swing states are different than they were several years ago. The argument for Colorado and Virginia being purple is now transparent, something that might not have been true in 2004. Selling a Southern evangelical in 2000 and 2004 to West Virginia and Arkansas seemed easy, but a zillionaire Massachusetts Mormon? Bush suprisingly pulled off New Mexico, but it seems unlikely to be a repeat performance for the GOP. The upshot is that the sentence, "[a] Democratic candidate who held all of Kerry’s states would also need to win Florida, or a similar combination of smaller states, to gain the presidency," seems remarkably un-farfetched.

Indeed, the challenge for the GOP is going to be fighting back against the intra-state trends. In Virginia, southeastern Pennsylvania, and New Jersey, the GOP needs an agenda that is more relevant to the suburbs. In the West and Florida — and nationwide — we need better Hispanic numbers. And in the rust-belt, we need a response to irresponsible Democratic anti-globalization demagoguing.

Interestingly, the 2008 GOP presidential field features three different kinds of heterodox candidates who try to address these failings. Rudy Giuliani might well offer an answer in the inner-suburbs. John McCain provides a path to greater penetration in the Hispanic vote and a personality that appeals in the upper-Midwest. And Mike Huckabee offers a populism that could help consolidate the weak Southern states and the rust-belt. The fourth option is, of course, the status quo. National Review, in an article about how broken the GOP coalition is, characterized it like this:

Romney and Thompson, meanwhile, are fighting over who is the most conventional, paint-by-numbers conservative circa 1987.

In conclusion, I think that Brian is right in some sort of static analysis. But the world isn’t static. The Reagan and even Bush coalitions are basically gone. It is very, very dangerous for the GOP to look at 2012 with anything but great apprehension. That’s why we need a candidate at the top of the ticket in 2008 who has something different to offer. And that’s why we need a Congressional party that is willing to substantially address some of our flaws. And I am not seeing it.

Darren White announces for NM-1

Candidate — Congress Party Total Percentage
Candidate — Sheriff Party Total Percentage
Candidate — Governor Party Total Percentage

Great news. New Mexico sources say that Darren White, the Bernalillo County Sheriff is announcing for Congress in NM-1.

Darren is a very strong candidate. In 2006, he was re-elected with 63% of the vote. Check out the numbers. They are the Bernalillo County numbers. (Torrance County is also in the district and provided the margin for Wilson’s victory)

This is a recruiting coup. Go NRCC! Go Tom Cole!

Republican Communicators Association

One of the things that Republicans have done better than Democrats is staff organizations on the Hill. One of my favorite from being on the Hill is the Republican Communicators Association. Every blogger in Washington should come. And, furthermore, the bloggers can share ideas with staffers, and, perhaps we can become more effective.

Here’s the next event. I encourage all righty bloggers in DC to go. However if you do go, please remember to RSVP. Also, the guys that run RCA asked me to point out that these are off the record.

RCA Luncheon with the Wall Street Journal

Friday, October 12, 2007

12:00 P.M.-1:00 P.M.

Location: H-137, The Capitol

Lunch will be served (Chick-fil-A).


This event is free for RCA members
and $5 for non-members

Costs of the GOP immigration position

Richard Nadler wrote an important piece in the Journal a couple of days ago. First, Nadler’s conclusion is simple:

Immigration policies that induce mass fear among illegal residents will induce mass anger among the legal residents who share their heritage.

In other words, we are alienating Hispanics who are voters.  Why? Because they hear the restrictionist position as a veneer for racism and nativism:

The illegals themselves–the group most directly affected–understand "enforcement first" for what it really is: a step toward mass deportation. That is why thousands of undocumented Brazilians exited Riverside, N.J., when the town council sanctioned their landlords and employers.

To these two groups that reject "enforcement first" as a rhetorical euphemism, we may now add a third: Hispanic citizens who vote.

Nadler drills down on this point. His point is simple. "Enforcement first" alienates Hispanic voters. The legal ones who are here:

The congressional election of 2006 provided a unique opportunity to gauge Hispanic voter behavior. In three congressional districts of the Southwest, two of them on the border, Republican candidates ran on an "enforcement-only" platform. In each case, this constituted a departure from previous congressional representation. And in each case, Hispanic support for the Republican candidate collapsed from 2004 levels.

How much? 22%. Twice as much as the national average of loss of Hispanic support:

In these three races, Republicans’ vote share in heavily Latino precincts dropped 22 percentage points. …

That changed in 2006, when the GOP’s Hispanic vote share declined by 10%. And, as we have seen, the drop was twice as precipitous where Republicans disavowed comprehensive immigration reform. With the huge wedge in vote share that "enforcement-only" opened, the cost-effectiveness of voter-registration efforts improved dramatically–for Democrats.

So Nadler is making an argument that our (to my mind immoral) position on immigration is not working. Who is this guy though? Some liberal shill? Nope. A right-wing conservative. He is the President of America’s Majority Project, whose board contains conservative icons like Herman Cain:

Americas Majority was founded to increase the constituency for conservative causes:  free market economics, international anti-totalitarianism, and morals based on Jewish and Christian scriptures.

Let’s be clear. This policy doesn’t work morally. It doesn’t work politically. It is time to recognize that and move forward. According to Univision and NDN, 10% of Hispanics watched the Spanish-language debate. Only one Republican, John McCain, offered to participate.

House RSC blogger call

Reps. Jeb Hensarling and Marsha Blackburn had a very brief conference call with bloggers.

They noted that S-CHIP was vetoed by the President. They pointed out all the details about this being more than a children’s healthcare program. 17 states are adding  adults with this. Dropping the citizenship requirement. Clearly this call (and further calls) are about rallying support for that. They also talked about earmarks.

Then there were questions.

Ed Morrissey from Captains Quarters. He asked whether or not the veto could be sustained. Hensarling points out that they already have the Republicans votes to win this fight. Then they talked about talking points. "If people realize what they have done with the S-CHIP program. With the Hillary Clinton memo from yesterday. … A walk towards a nationalized healthcare system. … More people will have opposition when they see the details …"

I asked about stripping Rep. John Doolittle of his position as founder of the RSC. Hensarling said that he would not support stripping any RSC member because they are the target of an investigation. That’s very disappointing.

Dave Weigel of
.  Asks about John Murtha’s comments about earmarks and transparency. "Transparency is John Murtha’s worst nightmare. He will do everything he can to combat transparency to the earmark system. … What the Democrats say and what they have done are completely at odds with one another. … They have huge loopholes in their system. .. This is a soft underbelly of the Democratic Party. … If [earmarks] are so good, why do they try to hide them?"

NZ Bear asked about the future legislative fights over the war. Hensarling says that he was surprised that the Democrats have not brought more resolutions to the floor. "We know that they are being hypocritical about the war. … As Jim Clyburn stated so eloquently, Good news about the war is bad news for the Democratic Party. …"

Terry Everett retires

Rep. Terry Everett (R-AL) just announced his retirement. I just got off the phone with a party leader in Alabama. It is looking like a two-way primary, at least.

One option is George Wallace Jr. The other is State Senator Harri Ann Smith. She is an up-and-comer, while he is very, very good at pulling Democrats. I suspect that there is an argument Wallace will make that argument in a bad environment.

Other people may show up.

Sen. Bob Kerrey (D-NENYNE)

With Chuck Hagel’s announcement that he is retiring, an open seat has emerged. Nebraska is a red state. I have one of the 2004 Roll Call election maps. Every county in Nebraska was won by George Bush. Only a single county was under 55%. That’s dark red.

It appears, according to Chris Cilliza that there could be a messy GOP primary and a likely former Senator Bob Kerrey entry into the race. It also appears that the state GOP is interested in pushing the narrative that Bob Kerrey is at least a little bit of a New Yorker now:

Even Republicans acknowledge that Kerrey would be Democrats’ strongest candidate but argue that he hasn’t been on the ballot in the state since 1994, and his time in New York will allow GOPers to paint him as an outsider to Cornhusker voters.

I was curious about this. So I did some digging. It turns out that Bob Kerrey (D-NE) had turned himself into Bob Kerrey (D-NY). A lot of details come from a 2005 blog post. Here are some of the choice tidbits.

First, he considered running for mayor of New York City against Mike Bloomberg in 2005:

Former United States Senator Bob Kerrey, the president of the New School University and a Democratic candidate for president in 1992, said yesterday that he was considering a run for mayor of New York City, declaring that Michael R. Bloomberg had failed to fight Washington Republican policies that Mr. Kerrey said endangered the city’s finances and security.

Furthermore, there is a theme. This guy just can’t sit still. Ran for governor. Retired. Ran for Senate. Retired. Ran for President. Considered running for mayor. Against a guy he had already promised to support:

Aides to Mr. Bloomberg said they were surprised by Mr. Kerrey’s comments. They said that just last week Mr. Bloomberg called Mr. Kerrey and asked him to head "Democrats for Bloomberg" – and Mr. Kerrey accepted.

Mr. Kerrey confirmed that conversation. "That is exactly right," he said last night. But he said that he began having second thoughts almost as soon as he had accepted.

Sounds like a guy with commitment problems. But he knew that he was committed to New York City. He said it was in his "gene code." Now, he said this in the context of 9-11, but he had switched his voter registration to NYC before 9-11. More like July 30, 2001, over seven months after leaving office.

Cilizza points out that "Kerrey’s name ID is lower than you might expect by the way." It strikes me that there’s an important opportunity to define Kerrey early. On one level he is an outsider. An another level he is mercurial. He didn’t like the Governor’s office. So he went to Washington. He didn’t like the Senate, so he ran for President. He didn’t like Washington, so he went to New York. Now he doesn’t like New York, so he wants to go back to Washington. Only catch is that he’s going to have to domicile back in Nebraska for it little bit.

Do the people of Nebraska really want to support this guy’s wanderlust?