End ‘amazing’ Washington futility with campaign reform and a VAT

Sen. John Cornyn, R-Texas, takes a photo of the huge volume of tax-code pages during a hearing on the Internal Revenue Service. (AP Photo/Susan Walsh)

I was a page in 1940 for the Joe Tolbert faction of the Republican Party.

We were committed to Robert Taft and challenged by the Tom Dewey faction. Dewey controlled the Credentials Committee. Our Taft group got unseated, but somehow we obtained the badges to get in the convention hall in Philadelphia.

I stood at the side door admitting the Taft delegates to the gallery and we sung,“We want Willkie!”

I worked closely with the Republican senators for 38 years in the U.S. Senate. The Republican party that had been headed by Taft, Dwight Eisenhower and Bob Dole is today headed by Donald Trump. Amazing.

In the 1968 presidential race, Richard Nixon had Maurice Stans as Chairman of the financial effort. Stans operated on a “cash and carry” basis, which was embarrassing to Republicans and Democrats alike.

Our immediate reaction in Congress was a bipartisan effort to limit spending on campaigns in 1971.

A flaw in the ’71 law was reenacted by a bipartisan Congress in 1973, and President Nixon signed it into law.

The Supreme Court, in Buckley vs. Valeo, reversed the limit on spending in campaigns by equating free speech with free spending.

For years Congress has tried to correct the mistake in Buckley with McCain-Feingold, public finance, etc.

With unlimited spending, a fury of fundraising began in Congress. On Washington’s Birthday, Feb. 22, a junior senator would read Washington’s Farewell Address and we’d have votes in the afternoon. No more!

Lincoln’s Birthday, Feb. 12, has been merged with Washington’s for a 10-day break for Congress to go to Hollywood and New York to raise money. Congress now has a break to fundraise — a St. Patrick’s Day break, Easter break, Memorial Day break, a Fourth of July break, a recess for the month of August, a Labor Day break, Columbus Day break, and I even had a fundraiser on the Friday after Thanksgiving.

The Policy Committee lunch every Thursday has been cancelled so that the Republican and Democratic senators can go to their parties’ headquarters to fundraise for two hours. Located amongst 10,000 lobbyists, Congress fundraises morning, noon and night.

This has allowed the lobbyists to control Congress. The lobbyists tell the speaker of the House and the majority leader of the Senate when to call the roll.

People constantly complain about the “do nothing” Congress.

On the contrary, Congress works hard — at fundraising. Members of Congress work hard for themselves — not the country. Amazing.

When we struggled to correct the mistake of Buckley, I introduced a joint resolution to amend the Constitution, empowering Congress to limit spending in campaigns. The resolution received a bipartisan majority but not the two-thirds required for a joint resolution to amend.

Republicans were in control of the Senate my last three years in the Senate — 2002, 2003 and 2004. They wanted a vote on a joint resolution to amend the Constitution to ban flag burning. They asked that I withhold my amendment to limit spending. I refused, and no joint resolution was called for consideration my last three years in the U.S. Senate.

Once spending is limited, fundraising is limited, partisanship diminishes, gridlock is broken and the Supreme Court’s 2010 Citizens United ruling can be corrected.

But none of the 535 members of Congress wants to limit spending. Amazing.

One hundred sixty-four countries compete in globalization with a value added tax. The value added is merely the cost of doing business, like the light bill, the salary of the delivery truck driver, etc.

The VAT countries aggressively use that tax to promote production. For example, BMW manufactures the engine and parts in Germany, delivers them tax-free to Greer, S.C., for assembly, and exports two million BMWs back to Europe.

Volkswagen, Toyota, Nissan all operate on the same basis — helping to put Detroit into bankruptcy.

Ecco, a Danish company, uses its 25 percent VAT to deliver shoes to Nashville for redistribution over the South.

It’s amazing there is no complaint about the competition. In fact, not having a VAT causes manufacturers in the U.S. to go broke. A successful entrepreneur in the U.S. must pay the 35 percent corporate tax on his production, and when his exports reach China a 17 percent VAT.

A U.S. competitor can produce the same product in China, import it tax free into the U.S. and put the entrepreneur out of business.

Imagine a country where you can’t produce for a profit. That’s the United States.


Ernest F. Hollings, a Democrat, served as governor of South Carolina from 1959-63 and in the U.S. Senate from 1966-2005.