Kevin Drum - June 2013

Revealed! Why the IRS is Targeting Open Source Software Groups

| Tue Jun. 25, 2013 11:06 AM EDT

Yesterday, in a post about the IRS targeting progressive groups for extra scrutiny, I mentioned in passing that they were also targeting open source software groups. What's up with that? A reader emails with the answer:

I noticed your curiosity about open source software organizations being called out for extra IRS scrutiny in the recently released documents. This is a story that's been developing for a few years. In short, the IRS is concerned that some of these organizations exist simply to market companies' software, and perhaps the associated services sold alongside them. The IRS suspects that such organizations would be a better fit for 501(c)6 classification, if anything.

I worked in the field for several years, and while it'd be pretty easy to convince me that some of these organizations deserve closer scrutiny, the IRS' "screening" has been wildly disproportionate. Groups that are unquestionably above board have been in limbo for years, unable to start fundraising in earnest, because the IRS refuses to finally approve or reject their application for 501(c)3 status.

Fundamentally, it's the same story that the Tea Party organizations have faced: the IRS has a reasonable question about the legitimacy of some of these groups, but they lack the resources to actually resolve those questions, so instead they just cast a massive net and catch everyone. The fact that this is hitting something as nonpartisan as software organizations should really drive home the point that this is all driven by structural problems at the IRS, rather than political scare tactics.

So there you go. I just thought some of the open source geeks in the crowd might be interested in this.

UPDATE: Another reader emails in with a bit of history:

A bunch of the case law on various 501(c)s specifically has to do with the old computer user groups of the 70s and 80s. You know, everyone who has an IBM mainframe in Missouri form an association to share ideas and promote tools and software to other people who have an IBM mainframe in Missouri, etc. Does such a group exist specifically to promote IBM and its products? Is it a trade association? Is it a general social organization? etc. I don't know how much institutional memory exists at the IRS, but it would not surprise me if this were a consideration in why these groups are getting (mostly unwarranted) extra scrutiny.

Fascinating! Who knew I had so many readers with expertise in this esoteric field?

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Should Immigration Reform Be Tearing Apart the Democratic Party?

| Tue Jun. 25, 2013 10:58 AM EDT

Jonah Goldberg says he's puzzled: immigration reform is tearing apart the Republican Party, but for some reason it's not doing the same to the Democratic Party. But is he puzzled, or "puzzled"? After noting that Sen. Bernie Sanders registered some discomfort with the bill but was eventually assuaged by a $1.5-billion youth jobs program, Goldberg says this:

Last week, when the Congressional Budget Office issued a report that the immigration bill would increase GNP per capita by 0.2% and slightly reduce the deficit in 20 years, Democrats hailed it as a vindication.

It fell to Republicans to note that the same CBO report assumed the legislation would reduce immigration by a mere 25% and would very modestly reduce average wages in the first decade....Liberal wonks raced to defend the bill on the wage issue by noting that average wages wouldn't necessarily go down for existing workers (if 10 people make $100 a day, and you add an 11th who makes $50 a day, the average goes down even if everyone's wages don't). But arguing about how much wages will or won't go down is a far cry from claiming wages will go up.

Goldberg says that conservatives are suspicious of the bill because it makes big promises about things like border security and tough citizenship requirements, but "the right is just not in a trusting mood." A big 10-4 to that, good buddy. But why does that leave him puzzled about liberals? The left is in about as trusting a mood as ever; the economic effects of the bill on native Americans are either tiny or zero (as Goldberg himself points out); and big chunks of the Democratic base are strongly in favor of passage. So why should immigration be tearing Dems apart?

Supreme Court Hands the GOP a Gift for 2014

| Tue Jun. 25, 2013 9:58 AM EDT

Another day, another Supreme Court decision. Today the Court struck down the part of the Voting Rights Act that requires certain states to get preclearance if they change their voting procedures. Technically, they didn't rule that preclearance was unconstitutional, only that the particular formula used in the VRA is unconstitutional. This is something that's long been a hobbyhorse of Chief Justice John Roberts, who believes it's implausible that the original set of states covered in 1965 should be the exact same set covered today. He wants Congress to revisit the issue and actively decide which states require preclearance and which ones don't.

Four other justices agreed with him this time, so preclearance is dead. And given the current partisan makeup of Congress, it's vanishingly unlikely that they'll agree to a new formula.

Ten years ago I might have had a smidgen of hope that this would turn out OK. There would be abuses, but maybe not horrible, systematic ones. Today I have little of that hope left. The Republican Party has made it crystal clear that suppressing minority voting is now part of its long-term strategy, and I have little doubt that this will now include hundreds of changes to voting laws around the country that just coincidentally happen to disproportionately benefit whites. There will still be challenges to these laws, but I suspect that the number of cases will be overwhelming and progress will be molasses slow. This ruling is plainly a gift to the GOP for 2014.

UPDATE: The dominant reaction on my Twitter feed is that this decision might actually help Democrats in the short run. There might not be enough time to substantially change voting laws in time for 2014, but the fight could galvanize minority voters and produce higher Democratic turnout rates. This is pretty much what happened in 2012 in reaction to all the GOP's voter suppression laws.

This is plausible. But even if it's true, I suspect it just means this ruling is a gift for 2016 instead of 2014.

NSA Claims It Doesn't Track Movements of Cell Phone Users

| Mon Jun. 24, 2013 11:22 PM EDT

Remember Terrance Brown? He's the robbery suspect in Florida who says that cell phone location data could help him prove his innocence. However, his phone company doesn't retain location data for very long, so his attorney asked the NSA to hand it over. Nobody expected the NSA to roll over easily on this, but their actual response has come as a considerable surprise:

The government's response to Lewis' request, filed with the court last Wednesday, says the NSA does not have such a capability: The agency didn't collect location data under the phone surveillance program, so there were no records to turn over, the court filing said.

"The program described in the classified [Foreign Intelligence Surveillance Act court] order cited by the defense did not acquire such data," the filing stated, adding that "the government has no reason to believe" location data were being held by the government that could be turned over for the criminal case.

...."Given that the FISA Court order says that the government can have location data, it's quite odd to hear the government claim that it doesn't 'collect' that data," said Susan Landau, a former Sun Microsystems engineer and an expert on digital surveillance.

Mark Rasch, a former federal cyber-crime prosecutor and the owner of a technology and cyber-law company based in Bethesda, Md., [...] said he was inclined to believe the government's assertion that it wasn't collecting Americans' phone location data on a massive scale. He cited a declarative statement in the government's denial in the robbery case: "The government does not possess the records the defendant seeks."

"That’s pretty unequivocal," Rasch said.

This is very strange. Rasch is right: NSA's statement is pretty unequivocal, and it would be risky for them to flatly lie in response to a subpoena. It would be especially risky given that Edward Snowden might very well know whether they're telling the truth, and Snowden would obviously take some joy in exposing an NSA lie.

And yet, WTF? If this information exists, and they have the legal right to it, why wouldn't NSA collect it? It's obviously not because they think it would be creepy to track the movements of every cell phone user in the country. Right? So what's the deal?

The IRS Also Targeted Groups That Labeled Themselves "Progressive"

| Mon Jun. 24, 2013 6:37 PM EDT

As the search for IRS perfidy continues, Democrats are finally getting into the act. Today, Democrats on the House Ways and Means Committee released a copy of the (now infamous) BOLO spreadsheet used by the IRS screening group in Cincinnati to highlight groups that analysts should "be on the lookout" for. This includes tea party groups, of course, as well as groups focused on open source software (?), medical marijuana, and—ta da!—anything with "progressive" or "blue" in its name:

Needless to say, House Dems are now a little peeved at the IRS inspector general, who released an audit report in May that highlighted all the tea party cases but said nothing about extra scrutiny being given to progressive organizations. In particular, they've asked Ways and Means Chairman Dave Camp to hold a new hearing at which the IG can "explain the glaring omission in his audit report." I wouldn't hold my breath on Camp agreeing to do this, but I guess you never know.

Anyway, that's the latest.

Jumping the Shark on Edward Snowden

| Mon Jun. 24, 2013 4:18 PM EDT

Some random thoughts on the latest Edward Snowden news:

Do I blame the Obama administration for charging him with a crime and seeking his extradition? Of course not. Snowden broke the law in spectacular fashion and then went as public as he possibly could about it. There's no way that any government in any country in the world wouldn't prosecute someone who did that. To leave him alone would be to tacitly give permission for any low-level intelligence worker to release anything they wanted anytime they wanted. No intelligence service can work like that.

Should Snowden have been charged with espionage? Of course not. Maybe unauthorized distribution of government property, or something along those lines. But based on what we know so far, he's plainly not a spy and plainly not working in the service of a foreign power. He's an American citizen who thinks the American surveillance state has gotten out of control.

Do I blame Snowden for leaving the country instead of sticking around to pay the price for his civil disobedience? Of course not. It's one thing to accept jail time as the price of civil disobedience if the jail time in question can be measured in months in a low-security facility. It's quite another when it can probably be measured as a life sentence in a federal Supermax facility. Snowden had every reason to fear the latter.

Should Glenn Greenwald be charged with a crime because he "aided and abetted" Snowden, as NBC's David Gregory suggested on Sunday? Of course not. A friend emailed this morning to ruminate about the "weird goings-on with Gregory," and here's how I answered:

The whole thing is even weirder than it seems at first glance. Greenwald works for the Guardian! If a guy working for the Guardian isn't a "real" reporter, who is? What's more, the Post published some of the same stuff. But no one's asking Bart Gellman if he's a spy.

It's just crazy. Lots of magazines, newspapers, and cable news channels (ahem) have specific points of view, and lots of them do crusading reporting. But no one ever says that this blackballs them from the journalist club. To hear Gregory tell it, I.F. Stone wasn't a journalist either. It's nuts.

I know, I know: Gregory was just "asking the question." Whatever. I can guarantee you that he wouldn't have asked Barton Gellman that question if he'd been a guest on the show.

Anyway, it's not coincidence that my answer to all of these questions is the same. Of course not! I'm not a deep-dyed supporter of everything Snowden has done, and I have lingering questions about his motivations, his timing, his actual knowledge of NSA programs, and his judgment. That said, some of the stuff making the rounds of the chattering classes is just crazy. Settle down, folks.

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Is the Clock Running Down on Immigration Reform?

| Mon Jun. 24, 2013 12:32 PM EDT

Over at National Journal, Fawn Johnson argues that immigration reform is probably dead. We just don't know it yet. The problem, she says, is the legislative calendar. The Senate will probably finish up its work shortly, but:

After senators get the bill done — probably in time to make their weekend barbeques — they have a weeklong July 4 break. And then they get to wait for colleagues on the other side of the Capitol who will have four weeks — four weeks — to deliberate before Congress takes off for an even lengthier recess in August.

....[This is] the month in which legislation dies. The last time the Senate passed a major immigration bill in 2006, House Republicans used the August recess to kill it by staging a series of hearings around the country that did nothing but rile up conservatives against it.

....When lawmakers return to the Capitol in September, they will be facing another financial crisis as they debate raising the country's debt ceiling. The four- to six-week countdown toward extreme limitations on government payments to Social Security or military operations will do two things: It will suck all the life out of any deliberative legislative effort, immigration included, and it will polarize the political parties. It will be far from fertile ground for the biggest immigration overhaul in 30 years.

I still think this depends entirely on the House leadership. If they decide they want to pass immigration reform and get it off the table for good, they can do it in four weeks. If they don't want to, they can pretty easily fritter away the time. So we're back to square one: do Republican leaders desperately want to put this whole thing behind them, regardless of the howling from the tea partiers, or do they care more about the backlash from their conservative white base than they do about picking up Hispanic votes in 2016? That's always been the question, and it still is. The calendar is just another tool they can use to work their will.

Immigration Reform Bill Has Too Many Words (But At Least They're in English)

| Mon Jun. 24, 2013 11:40 AM EDT

Is the Senate's immigration reform bill really a mammoth 1,200 pages long? Paul Waldman tries to tell us it's not: "Bills in Congress are printed with huge margins and double-spaced, with lots of indentations to boot....So you can say 'It's 1,200 pages long!', but that probably equates to about as many words as a book that's 3 or 400 pages long."

That's....just not going to work. I suspect that even Paul agrees it's a hopeless argument. But the real question is why this has become such a favorite gripe from the tea party set. I mean, who cares how long a bill is? If you don't like immigration reform, you don't like immigration reform. You still wouldn't like it if the bill were 20 pages long instead of 1,200. So why the newfound obsession over bill length? Here are a few guesses:

  • They're convinced that the only reason a bill could be so long is to hide stuff in the nooks and crannies. A 1,200-page bill probably has a clause in there giving immigrants free Obamaphones for life, but it's so cleverly disguised that no one will ever notice.
  • It's part of the general tea party longing for a simpler age. Laws didn't used to be so long, after all, and America got along fine. Hell, the entire Constitution fits on one page!
  • Generally speaking, a long bill does more than a short bill. It provides more hooks for government regulation and expansion of federal power, both of which conservatives oppose.
  • It just sounds good.

Of course, it's worth pointing out that conservatives were also pretty unhappy with the original TARP bill, which clocked in at a svelte three pages. It was, they said, a "blank check." (Lots of liberals agreed.) Given this, you can conclude either (a) there's a sweet spot of about 100 pages that tea partiers consider a Platonic ideal for bills, or (b) they don't like certain bills, and length is just a red herring. I'm going with option B for the moment.

Supreme Court Punts on Big Affirmative Action Case

| Mon Jun. 24, 2013 9:54 AM EDT

Well, the Supreme Court has finally handed down a ruling in one of this year's high-profile cases, and.....it punted. In a case challenging affirmative action at the University of Texas, the Supremes ruled that the Fifth Circuit court failed to apply strict scrutiny when it upheld the university's claim that affirmative action was necessary as a way of promoting diversity. Key quote: "The reviewing court must ultimately be satisfied that no workable race-neutral alternatives would produce the educational benefits of diversity."

So now it goes back to the Fifth Court, and then most likely back up to the Supreme Court someday. For now, nothing has changed.

Bernanke Tries to Contain Wall Street Panic

| Mon Jun. 24, 2013 9:43 AM EDT

John Hilsenrath of the Wall Street Journal says that investors overreacted to Ben Bernanke's suggestion last week that the Fed might taper off its QE program in the near future:

One problem the Fed now faces is that in signaling its plans for the so-called quantitative-easing program, Mr. Bernanke might have led investors to believe the central bank is going to rein in all of its easy-money policies sooner or more aggressively than it actually expects.

The Fed isn't just buying bonds; it also has long held short-term interest rates close to zero, and has said since December it will keep its benchmark federal-funds rate there until the jobless rate falls to at least 6.5%. Mr. Bernanke likens the two levers to driving a car: When it reduces its bond purchases, that will be like lightening the pressure on the accelerator; when it starts raising rates, it will be akin to tapping the brake.

Many investors appear to have missed Mr. Bernanke's signals that the Fed might wait longer than expected before raising short-term rates. He said on Wednesday that the 6.5% unemployment rate threshold might be too high and that the Fed might decide to keep rates low for long after the rate drops below that level, especially if inflation remains low.

Hmmm. So QE might end soon, but interest rates might stay at zero longer than expected. So why the panic?

My cynical response would be that markets just like to panic. It's what they do, and they're more panic-prone than ever these days. Partly this is because the economy is genuinely weak. Partly it's because Fed actions are more important right now than they usually are. Partly it's because Wall Street has gotten too accustomed to making money on model-based investing that relies on tiny spreads. Even a hint of a change in those spreads is now enough to send them screaming for the hills.

In any case, I expect the panic to subside soon—though outside events in China and Europe could obviously change that. But if either China or Europe go splat, a few words from Ben Bernanke aren't going to matter anyway.