Jeff Hauser and Eleanor Eagan
The American Prospect, January 15, 2019
There was supposed to be one genuinely easy victory for the new Democratic majority in the House. Medicare for All? No. Green New Deal? No. Critical? Yes—but easy? No. But Trump’s tax returns? Yes, the new majority was supposed to be able to inspect that holy grail of opposition research.
That’s why one of the most discordant notes of the first week of the new Congress was a decision by Representative Richard Neal of Massachusetts, the newly elevated chair of the powerful House Committee on Ways and Means, to retreat on his promises to move quickly to obtain Trump’s tax returns.
Obtaining Trump’s tax returns as fast as possible should be a priority for people interested in transaparent and non-corrupt government. Neal’s decision is also worrisome for what it seemingly portends for the House Ways & Means Committee under his chairmanship. Neal’s chairmanship itself underscores the type of inroads progressives must make in order to reform a changing—but not yet not fundamentally changed—Democratic caucus in the House of Representatives.
The press has obsessively covered the supposed risk of resurrgent progressives moving too far and too fast. It has paid far less attention to the undertow of corporate Democrats resisting urgently needed reforms.
The Ways and Means Committee, along with the House Financial Services Committee, is infamous for the gravitational pull to centrist Democrats who covet these assignments less to do the nation’s business and more to ingratiate themselves with business groups and thereby reap campaign contributions.
Neal is Exhibit A. He is certainly not a corporate centrist because of his district. The Massachsetts first district, in the western part of the commonwealth, takes in some of the most progressive areas of a progressive state including the Berkshires and the Pioneer Valley.
It was reconfigured after the 2010 Census, when Massachsetts lost one seat. Previously, much of the old district was represented either of two great progressives, John Olver, now retired, and Jim McGovern, the new chair of the House Rules committee, who holds an adjoining seat.
Progressive Punch measures voting records since 1993 (most of Neal’s tenure) and shows Neal’s “progressive voting record” at 151st among all current members of Congress (there were 201 Democrats in the last Congress.) Overall, Progressive Punch gave Neal a “C.”
His record has won financial support from the PACs of leading beneficiaries of tax avoidance like General Electric, Caterpillar, and Tyco, and PricewaterhouseCoopers. Neal’s fundraising pattern is similarly worrisome for progressives who have thrilled to the rise of Democrats funded by small dollar donors. Neal’s top common contributor in the 2017-2018 cycle was “Votesane PAC,” whice is headedlargely by veteran Republicans lobbyists and influence peddlers. In the last cycle, Votesane was “the biggest donor for the embattled Republican incumbents.”
Overall, from 2017-18 Neal’s campaign committee received less than $25,000 from small dollar donors while raising more than $850,000 from “Finance/Insurance/Real Estate” (excluding health insurance).
A Neal aide offered two justifications for the Congressman’s puzzling decision to temporize on demanding Trump’s tax returns. First, Representative Neal wants to build a case for getting the President’s tax returns; and second, he does not want to generate animosity that could scuttle future efforts at bipartisan tax reform.
Of course, Trump promised Republican primary voters the returns would be public in spring 2016, congressional Democrats have been building the case for seeking Trump’s tax returns for over two years, and bipartisan tax reform is likely nothing more than a pipe dream (or, for progressives, a nightmare).
For those who have long been fighting to see the President’s returns in order to assess potential foreign entanglements, these shallow arguments are deeply frustrating. Neal’s position is even more troubling, however, for what it reveals about his oversight agenda beyond Trump’s tax returns.
Neal appears to view oversight as secondary to his primary role as a legislator. Here he differs with former President Woodrow Wilson who, in his capacity as a scholar of political science wrote that, “quite as important as lawmaking is vigilant oversight of administration,” for the US Congress. More recently, the profoundly neutral Congressional Research Servicewrote in 2014 that oversight is one of Congress’s principal responsibilities and a key piece of the system of checks and balances that undergirds our democracy.
Far from being a distraction, oversight helps hold both government and corporations accountable. Investigations let policymakers know what laws and what agencies are working well and which are failing, generating a blueprint for better laws moving forward.
Instead, oversight should be seen as a way to better understand, and eventually combat, the ways some of the most powerful corporations and richest individuals have used politics to become ever wealthier and more entrenched. While the Trump administration represents an extreme example, it did not invent the revolving door. There’s a reason why progressives were furious with President Obama appointing Wall Street lawyers like Mary Jo White and former bankers like Antonio Weiss to key positions.
The outrage at Trump’s excesses, however, offers an opportunity to address the revolving door once and for all. Unless Republicans are set to concede that, for example, it’s okay for a president to be beholden to foreign powers, oversight of Trump’s tax returns is not a “partisan” issue.
Democrats are not demanding to see the President’s returns because he is a Republican but because there is mounting evidence to suggest that he is misusing taxpayer dollars, is currently profiting off of his position, and is beholden to foreign individuals who could pressure him to make decisions that undermine Americans’ economic and bodily security. The American people undoubtedly deserve to know whether or not their President is working in their best interest or selling them out to the highest bidder.
Aside from concerns that are specific to President Trump’s situation, there are also deeper lessons to be learned from the President’s tax returns. The New York Times’s bombshell investigative reporting revealed that Trump and his family engaged in tax avoidance on an enormous scale, and are likely guilty of tax evasion. Policymakers can use this knowledge—and, admittedly, the potential public attention to Trump’s specific tax shenanigans—to write new laws as well as empower the IRS to close loopholes that allow the wealthy to pay comically low effective rates.
Indeed, understanding Trump’s finances is an important window into understanding whether tax law interpretations by Trump’s Treasury Department and IRS are being made to enrich the Trump family. And understanding how Trump is profiting off of his office and the ways in which he may be compromised will help spur lawmakers to write laws that eliminate the possibility of such conflicts of interest in the future.
If these reasons are not compelling enough for Neal, he should take note of the fact that, according to a November Quinnipiac poll, by a margin of 59-to-32 percent of registered voters think the president should release his tax returns and a majority support a Democratic investigation if he does not. Neal has no good excuse for his hesitation.
Putting in the simple request for the tax returns will also allow Neal to move on to the more systemic work of untangling the larger web of corruption that goes well beyond the president’s person. The President has appointed officials at all levels of the Executive Branch who, through incompetence, conflicts of interest, or radical ideology, are facilitating corporate abuse and undermining the structures of our democracy.
With jurisdiction over taxation, Medicare, Social Security, and Commerce, the Committee on Ways and Means has the authority and responsibility to pursue a wide-reaching and aggressive oversight agenda. The following are a mere sampling of the many issues that the committee should tackle:
Tremendous journalism is revealing how the richest Americans are evading and avoiding taxes ever more successfully—now it’s time for Congress to figure out how to fix the IRS and tax code to reinstate the norm that tax laws apply to the rich as well as the middle class and working poor.
There is strong evidence that pharmaceutical companies have worked together to increase the prices of generic drugs at great cost to Medicare and regular Americans.
Treasury Secretary Steven Mnuchin will have the power to decide the fate of Sears workers’ pensions, despite having served on the company’s board for over a decade and been friends with its CEO for decades. More should be learned about his potential conflicts of interests.
This is but a small excerpt of a longer list of issues deserving of the committee’s attention. The Treasury Department and the Department of Health Human Services are abetting corporations breaking rules and laws in order to get even richer. The incompetence and selfishness of these Trump appointees is costing the American people money and endangering their financial security. As one of the Democrats most empowered to perform oversight, Neal has a responsibility to demand answers.
New polling suggests that this approach is not only right, but would be immensely popular. Eighty-one percent of people polled said that government in Washington was either somewhat or completely broken. In turn, these people strongly supported holding politicians accountable, stopping political corruption, and reducing the influence of big money in politics. Swing voters, in particular, were in support of “taking power away from special interests.”
In a period when the chances of legislative victories are slim, oversight is the best chance that Democrats have at controlling the conversation and making real contributions that help the American people.
Oversight is an opportunity to draw attention to broad abuses and confirm most Americans’ standing suspicion that President Trump and his administration are actively working against their interests. In a period when the chances of legislative victories are slim, oversight is the best chance that Democrats have at controlling the conversation and making real contributions that help the American people.
And the best way to ensure such oversight appears “nonpartisan” is … to make it so. Allow the Republican minority to call witnesses from the Obama administration—and commit to stringent oversight if a Democrat becomes president in 2021.
But what if Neal’s aversion to stringent oversight of Trump is not because he fails to understand how Trump’s tax returns connect to larger, nonpartisan interest in an oversight crackdown on tax avoidance and evasion by the rich, but because he sees that connection all too clearly? In other words, is Neal potentially not just timid, but an opponent of progressives on larger questions of income inequality? And if so, what does that suggest about the task before progressives within the House Democratic caucus?
Telling anecdotes suggest that the cumulative statistics are representative of a larger truth about Neal’s lack of zeal to combat corporate misbehavior.
Neal’s comfort with the decades old norms of a broken Washington in which Democrats do not rock the boat with corporate oversight suggests that progressives are right to focus on the makeup of the so-called money committees, including Ways & Means, which handle most domestic legislation. The Congressional Progressive Caucus is having mixed success thus to far, with some top level goals being reached (including membership on the Ways & Means Committee), but firebrand progressives like Ro Khanna and Pramila Jayapal failing to secure spots on Ways & Means.
But while new progressive stars like Alexandria Ocasio-Cortes and Katie Porter begin the long slog of building seniority on an important committee like House Financial Services, the broader progressive movement will need to develop a strategy to influence much more senior members like Richard Neal. Some will argue that greater public conversation about Trump’s tax returns and broader inequities in tax collection might be enough to move Neal. Electorally oriented groups will possibly advocate a primary challenge in 2020 in the aftermath of Neal’s underfunded 2018 challenger receiving nearly 30 percent of the vote. Yet others will seek to push Neal from above by pushing Democratic leadership to spur Neal on to greater investigative zeal. In light of growing progressive focus on committee membership, it is likely there will be an attempt to pressure Neal from below in the committee—i.e., pressuring other members of the Ways and Means Committee, including progressives not previously known to be firebrands, to move Neal.
But whatever the path, now is a time for action. Neal’s recent hesitation inspires little confidence that he will use his power to be the champion that regular Americans need. There is still time, however, to reverse course. He should start by requesting Trump’s tax returns and then getting started on the actually difficult work that lies ahead.
Jeff Hauser is the executive director of the Revolving Door Project at the Center for Economic Policy and Research.
Eleanor Eagan is an intern with the Revolving Door Project.