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29 October 20
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Heather Cox Richardson | The American Obsession With Socialism
Heather Cox Richardson, Heather Cox Richardson's Facebook Page
Richardson writes: "During her interview with the vice-presidential candidate on CBS's 60 Minutes on Sunday, journalist Norah O’Donnell asked Senator Kamala Harris if she would bring a 'socialist or progressive perspective' to the White House. Harris burst out laughing before she said 'no.'"
Harris’s response has been viewed more than a million times on social media. One person responded “she doesn’t even know she’s into Marxism = socialism = communism.”
Trump and his campaign surrogates, as well as Republican lawmakers, continue to refer to Democrats as “socialists.” In Florida on Friday, Trump said: "We're not supposed to have a socialist—look we're not going to be a socialist nation. We're not going to have a socialist president, especially a female socialist president, we're not gonna have it, we're not gonna put up with it."
Today, in Lansing, Michigan, Trump warned about the elevation of Harris to the presidency, saying that “Joe’s shot; Kamala, you ready?... She makes Bernie Sanders look like a serious conservative.” Trump seems to be using the term “shot” as the old slang word for “worn out,” but there is no doubt he understands the dual meaning in that word, and is warning that Harris, should she be required to succeed Biden, will be a left-wing radical.
The American obsession with socialism has virtually nothing to do with actual international socialism, which developed in the early twentieth century. International socialism is based on the ideas of political theorist Karl Marx, who believed that, as the working class was crushed under the wealthy during late stage capitalism, it would rise up to take control of the factories, farms, utilities, and so on, taking over the means of production.
That theory has never been popular in America. While we have had a few socialist mayors, the best a socialist candidate has ever done in an election was when Eugene V. Debs won about 6% of the popular vote in 1912. Even then, while Debs called himself a socialist, it is not clear he was advocating the national takeover of industry so much as calling for the government to work for ordinary Americans, rather than the very wealthy, in a time that looked much like our own.
American “socialism” is a very different thing than what Marx was describing in his theoretical works. Fear of it erupted in the 1870s, long before the rise of international socialism, and it grew out of the peculiar American context of the years after the Civil War. During the war, Republicans had both invented national taxation—including the income tax—and welcomed African American men to the ballot box. This meant that, after the Civil War, for the first time in American history, voting had a direct impact on people’s pocketbooks.
After the war, southern Democrats organized as the Ku Klux Klan to try to stop Black Americans from taking their rightful place in society. They assaulted, raped, and murdered their Black neighbors to keep them from voting. But President Ulysses S. Grant met domestic terrorism with federal authority, established the Department of Justice, and arrested Klan members, driving their movement underground.
So reactionary whites took a different tack. The same people who had bitterly and publicly complained about Black Americans participating in society as equal to whites began to argue that their problem with Black voting was not about race, but rather about class. They said that they objected to poor voters being able to elect leaders who promised to deliver services or public improvements, like schools and roads, that could be paid for only by taxes, levied on property holders.
In the South of the post-Civil War years, almost all property holders were white. They argued that Black voting amounted to a redistribution of wealth from hardworking white men to poor Black people. It was, they insisted, “socialism,” or, after workers in Paris created a Commune in 1871, “communism.”
This is the origin of the American obsession with “socialism,” more than 40 years before Russia’s Bolshevik Revolution.
Since that time, Americans have cried “socialism” whenever ordinary Americans try to use the government to level the economic playing field by calling for business regulation—which will cost tax dollars by requiring bureaucrats—or for schools and roads, or by asking for a basic social safety net. But the public funding of roads and education and health care is not the same thing as government taking over the means of production. Rather, it is an attempt to prevent a small oligarchy from using the government to gather power to themselves, cutting off the access of ordinary Americans to resources, a chance to rise, and, ultimately, to equality before the law.
It is striking that O’Donnell felt it appropriate to ask Harris if she is a socialist—and lots of people apparently think that’s a legitimate question—while no one seems to be asking Trump, who is currently in power, if he’s a fascist.
Fascism is a far-right political ideology born in the early twentieth century. At its heart is the idea of a strong nation, whose people are welded into a unit by militarism abroad and the suppression of opposition at home. While socialism starts from the premise that all members of society are equal, fascists believe that that some people are better than others, and those elites should direct all aspects of society. To promote efficiency, fascists believe, business and government should work together to direct production and labor. To make people loyal to the state, fascists promote the idea of a domestic enemy that threatens the country and which therefore must be vanquished to make the nation great. The idea of a hierarchy of men leads to the defense of a dictatorial leader who comes to embody the nation.
Trump has certainly rallied far-right thugs to his side. At his first debate with Democratic presidential candidate Joe Biden, he told the far-right Proud Boys to “stand by,” and last week a study warned that five U.S. states are at risk for election-related armed violence by right-wing terrorists who have already threatened elected officials.
Today, Trump repeatedly attacked Michigan Governor Gretchen Whitmer at his rally in Lansing. Whitmer was a target of right-wing extremists who plotted to kidnap her and put her on trial for “treason,” and she has asked him repeatedly to stop riling up his followers against her. He has also weaponized government police for his own ends, sending them into the streets to bash peaceful protesters in a campaign he insists, in an echo of fascist leaders, will produce “law and order.”
He has certainly behaved as if some Americans are better than others, telling us that we simply must accept more than 225,000 deaths from coronavirus even as we know that those deaths disproportionately hit the elderly and Black and Brown Americans. Over the past week, the U.S has reported more than 500,000 new cases—a record—while Trump claimed credit today for “ENDING THE COVID-19 PANDEMIC.” He uses images of himself as a strongman, insists he has handled his job perfectly, and increasingly uses our public property as props for dramatic videos and photoshoots.
He is purging the public service of career officials and replacing them with loyalists. Recently, he issued an Executive Order stripping public servants of their civil service protections so he can fire those who are insufficiently loyal and fill their posts with cronies. Last night, his hand-picked head of Voice of America, Michael Pack, scrapped a federal regulation giving editorial freedom to the U.S. media outlets under the VOA umbrella. Pack wants editorial control, to turn the public outlet into a mouthpiece for Trump. Former VOA director Amanda Bennett told NPR she was “stunned” at his actions, which remove “the one thing that makes Voice of America distinct from broadcasters of repressive regimes.”
He has set up Muslims and immigrants as scapegoats, and has increasingly threatened Democrats, saying they should not be allowed to win the upcoming election, an election he has threatened to ignore unless he wins.
It’s a frightening list, no?
But for all that, Trump is an aspiring oligarch, rather than a fascist. He has no driving ideology except money and sees the country as a piggy bank rather than as a juggernaut for national greatness. Still, that his drive for power comes from a different place than fascism makes it no less dangerous to our democracy.
Over the next few years, we are going to have to have hard conversations about the role of government in society. Those conversations will not be possible if any Democratic policy to regulate runaway capitalism is met with howls of "socialism" while Republican policies that increasingly concentrate power in a small group of Americans are not challenged for the dangerous ideologies they mimic.
A ballot drop box outside the Bucks County Courthouse in Doylestown, Pennsylvania. (photo: Mark Makela/The New York Times)
Facing Gap in Pennsylvania, Trump Camp Tries to Make Voting Harder
Nick Corasaniti and Danny Hakim, The New York Times
Excerpt: "President Trump's campaign in the crucial battleground of Pennsylvania is pursuing a three-pronged strategy that would effectively suppress mail-in votes in the state, moving to stop the processing of absentee votes before Election Day, pushing to limit how late mail-in ballots can be accepted and intimidating Pennsylvanians trying to vote early."
Election officials and Democrats in Pennsylvania say that the Trump effort is now in full swing after a monthslong push by the president’s campaign and Republican allies to undermine faith in the electoral process in a state seen as one of the election’s most pivotal, where Mr. Trump trails Joseph R. Biden Jr. by about six percentage points, according to The Upshot’s polling average.
Mail-in votes in Pennsylvania and other swing states are expected to skew heavily toward Democrats. The state is one of a handful in which, by law, mail-in votes cannot be counted until Election Day, and the Trump campaign has leaned on Republican allies who control the Legislature to prevent state election officials from bending those rules to accommodate a pandemic-driven avalanche of absentee ballots, as many other states have already done.
A women inserts her ballot in a ballot drop box, Friday, Oct. 23, 2020, in Salt Lake City. (photo: Rick Bowmer/AP)
ALSO SEE: Your Absentee Ballot Never Showed Up. Now What?
Tim Dickinson | Don't Panic if You Missed the Mail-In Ballot Deadline. Here's How to Make Sure Your Vote Counts
Tim Dickinson, Rolling Stone
Dickinson writes: "The last day to confidently mail in an absentee ballot, in time to have it received by Election Day, November 3rd, has passed. (October 27th was the cutoff set by the Postal Service.) But don't panic."
READ MORE
Cynthia Brown visits Wilmington's Pine Forest Cemetery, where her great-grandmother hid during the 1898 massacre of African Americans during the country's only coup d'etat. (photo: Jahi Chikwendiu/The Washington Post)
A Black Voting Rights Activist Confronts the Ghosts of Racial Terror in North Carolina
Sydney Trent, The Washington Post
Trent writes: "Cynthia Brown woke at 5 a.m., more than an hour earlier than she had planned. She was bleary-eyed from lack of sleep, but her 65-year-old body was coursing with adrenaline."
It was Oct. 15, the first day of early voting in a state considered pivotal in the presidential race, and Brown and her husband, Phil, were determined to show up in person, despite the pandemic. After she downed her coffee and got dressed, Brown slipped on a pair of brown loafers with embossed monarch butterflies — a symbol of the political transformation she so desired.
At 7:30, the couple headed out to join the record number of North Carolinians who have been voting early across the state. Many, like her, are African Americans who have long been the target of voter suppression efforts, from literacy tests during the Jim Crow era to the state’s 2013 passage of a strict voter ID law that was later struck down by a federal appeals court.
But 2020, Brown said, felt different.
“There was something about this election, all the talk of voter suppression, all the paranoia about mail-in ballots, that was driving me to be present,” she explained as she and her husband stood masked in a long line outside Cape Fear Community College’s north campus.
For the retired human resources professional, the election wasn’t just about the future; it was also about the past.
“I thought about my great-grandmother Athalia,” Brown said, “and what happened here.”
On Nov. 10, 1898, two days after a contentious election, Athalia Howe, the 12-year-old granddaughter of prominent Black builder Alfred Augustus Howe, had crouched fearfully in Wilmington’s Pine Forest Cemetery as armed white supremacists stormed the city. The mobs massacred dozens of African Americans — the true number will never be known — dumping their limp bodies in the winding Cape Fear River. They seized prosperous Black people and their White allies and forced them onto trains out of town. After publishing a “White Declaration of Independence,” the marauders took over the county Board of Aldermen — the only coup d’etat in U.S. history.
Wilmington’s African American community, a shining post-Civil War model of Black upward mobility, has never recovered.
Until relatively recently, the devastating events of 1898 were largely lost to history. In 2000, the state General Assembly appointed a special commission to investigate the violence, resulting in a 2006 report with recommendations for restorative justice, some of which have been heeded, others not. A separate push for reparations has not gone anywhere.
Meanwhile, waves of young, White and often liberal newcomers have been arriving in the beachside city, renovating charming period houses, filling trendy restaurants in the gentrified historic district and making New Hanover County harder for President Trump to win a second time.
About three-quarters of Wilmington’s nearly 125,000 residents are now White. Many of them, Brown said, know little or nothing about the racial terror unleashed in 1898.
“I’ve seen so many people come here and think it’s a fun-in-the-sun place, and they operate as though the playing field is level for everyone,” Brown said. “They drive by underprivileged neighborhoods, and it’s like, ‘Ho-hum.' … Not knowing the history can be destructive to a community. When people have no sense of the ground they are standing on, they just keep perpetuating what has already occurred.”
A far more recent act of violence — the killing of George Floyd by a White Minneapolis police officer — prompted Wilmington to confront some of its ghosts.
In July, a park named for 1898 co-conspirator Hugh MacRae was renamed Long Leaf Park. In August, the city voted to erect a Black Lives Matter mural, after weeks of contentious debate. In October, the Cape Fear Garden Club scrapped its Azalea Belles program in which young women paraded about in colorful antebellum hoop skirts reminiscent of White enslavers. And last week, Wilmington Mayor Bill Saffo, a White Democrat, kicked off a Rise Together initiative to address racial inequality.
Amid the change, three White Wilmington police officers were fired after they were inadvertently caught on video claiming that Black Lives Matter protests would spark another Civil War. “Wipe 'em off the f---ing map,” Officer Michael “Kevin” Piner said of African Americans. “That’ll put 'em back about four or five generations.”
All of this was on Brown‘s mind — the push for racial progress and the countervailing winds of White resistance — as she stood in line to vote at Cape Fear Community College.
Brown knew that before the massacre and coup in Wilmington, the White men who ran the Democratic Party — defenders of slavery before the Civil War and resisters of Reconstruction after it — had terrorized African Americans at the polls. The Democrats employed threats and intimidation to keep Black voters at home and stuffed ballot boxes to win elections. In 1897, Black men in North Carolina voted in large numbers, but in 1900, the state stripped most of the right to vote. The political violence in 1898 Wilmington is now considered by historians to have been an opening salvo for the even more viciously racist period known as Jim Crow.
More than 120 years later, Brown wondered whether she was witnessing a revival of that dark time. As the election approached, White extremists were accused of plotting to kidnap Michigan’s governor and of opening fire on Black Lives Matter protesters in Wisconsin. They’d celebrated Trump’s refusal to disavow them.
In late summer, a woman claiming to be from a voting rights group called Brown on her cellphone and offered to bring Brown an absentee ballot. When Brown asked where she was calling from and to state Brown’s address, the woman was tongue-tied. Brown hung up and called the county Board of Elections.
“This doesn’t sound right,” the employee said. Brown reported the incident to the state, then stepped up her election involvement. She distributed voter guides, gave out information about spotting and responding to voter suppression, and volunteered to serve as a county Board of Elections monitor.
Then, a few weeks ago, Brown went to visit the grave of her great-great-great-grandfather Alfred Howe at Pine Forest Cemetery. The base of the stately obelisk bearing Howe’s name had been sprayed with reddish brown paint. Brown stared at it, startled and incredulous, wondering who would do such a thing.
Not long before, Brown had read a story in the Wilmington Star-News that reported a steep rise in pistol purchase permits issued in New Hanover County — in August, more than six times the number granted in the same month last year. She shivered and thought of the run on guns and ammunition in the days before Nov. 10,1898.
Now Brown, a petite, emotive woman with wispy salt-and-pepper hair, was determined to do her part to keep time from rolling back. She adjusted her homemade cloth mask, and she and Phil moved forward slowly toward the door of the polling place.
The Secret Nine
Brown was about 8 years old when her mother took her to visit her great-grandmother Athalia, who was in failing health and living in Pennsylvania. As Brown and her brother stood by Athalia’s bedside, the old woman, drifting in and out of consciousness, suddenly grabbed Brown’s wrist.
“Don’t let it happen to you! Run!” Brown recalled Athalia screaming before her mother hurried the children out of the room.
Years later, when she was a young married woman living in Chicago and raising three children, her father would finally tell her about 1898 and make her promise to return to Wilmington to keep the family’s history from being forgotten.
Athalia’s father, William C. Howe, had left for work on the docks as a barrel maker on that chilly November morning. Athalia was home when she witnessed a Black neighbor on his way to work being shot to death by White men, Brown’s father told her. White men were running through the dirt streets, firing as they went.
Athalia and her mother and sister, along with other women and children, sprinted to the family’s church, St. Stephen AME, to seek refuge. But the White marauders had already positioned themselves in front of the heavy wooden doors.
The women and their children raced behind the massive brick church, east to the wooded Black cemetery. There, the family huddled together with nothing to eat for several days, while others found refuge in nearby swamps.
The massacre, the coup and the stealing of the state elections were part of a highly orchestrated white supremacist campaign led by powerful Democratic politicians and businessmen. A few years earlier in North Carolina, Abraham Lincoln’s integrated Republican Party had formed a coalition with the Populist Party founded by small White farmers who had suffered financial hardship. The partnership, known as “Fusion,” broke the hold of Democrats on the government, resulting in a sweep of statewide offices. Black male voters helped elect Fusion leader Daniel Russell as governor in 1896. In Wilmington, Fusionists took power.
The backlash from White Democrats was immediate. They began plotting to regain control of the government with the aim of removing Black men from public office and disenfranchising Black voters. They trained their sights on Wilmington, then the largest city in North Carolina and a flourishing port.
Wilmington had become a national symbol of Black success in the decades following the Civil War. African Americans, who were in the majority, owned 10 of the city’s 11 dining establishments and 20 of its 22 barbershops, according to Timothy B. Tyson, a Duke University historian and co-author of “Democracy Betrayed: The Wilmington Race Riot of 1898 and Its Legacy.” Black people worked for themselves as architects, lawyers and doctors, jewelers, watchmakers and tailors, often in the prosperous Northside neighborhood called Brooklyn. They worked as builders, like Brown’s great-great-great grandfather Alfred Howe, his elegant homes with their distinctive sloping French-style roofs gracing the streets of the city’s downtown.
Black men occupied three of 10 alderman seats after the Fusionists claimed power. The federal customs collector was Black; so were the county treasurer and the city’s jailer. The literacy rate among Black males in the city was higher than that of Whites.
One of the most educated Black men in town was Alex Manly, editor of the Daily Record, believed to be the only Black-owned newspaper in the United States at the time.
To stir up racist sentiment, North Carolina Democrats exploited White fears that Black men who became successful would sexually violate White women. One of the organizers, Josephus Daniels, then editor and publisher of the state’s dominant daily, the Raleigh News & Observer, eagerly harnessed his presses in the service of the white supremacist campaign.
Meanwhile, in Wilmington, a group known as the Secret Nine began planning an attack, organizing armed white supremacist groups, including the Democrats’ paramilitary arm known as the Red Shirts. They created lists of Black and White Fusionists to be killed or driven from town, according to Tyson.
Then, Manly provided the plotting Democrats with a spark.
In August 1898, White-owned newspapers in North Carolina began reprinting a year-old speech by a White woman from Georgia named Rebecca Felton. The speech implored White men “to lynch a thousand times a week, if necessary, to protect white women from black rapists.”
In Wilmington, Manly published a stinging rebuttal. “You set yourself down as a lot of carping hypocrites in that you cry aloud for the virtue of your women while you seek to destroy the morality of ours,” Manly wrote. “...Don’t think ever that your women will remain pure while you are debauching ours. You sow the seed — the harvest will come in due time.”
Manly a direct descendant of North Carolina’s White governor, Charles Manly, and an enslaved woman, braced for the fury, and it arrived, as Whites issued death threats and called for his lynching.
On Nov. 10, the White mobs set the Daily Record ablaze. By then, Manly and his staff had already fled. On that day and in the following months, more than 1,400 African Americans left the city and Wilmington’s Black middle class was decimated as the vise of Jim Crow tightened.
Brown’s great-grandmother Athalia and her family remained in Wilmington, while other Howes of more means fled. In the early 20th century, Athalia Howe worked as a cook on a grand estate owned by the family of Walter L. Parsley — a member of the Secret Nine.
'A lot of silence’
Geoff Ward, a distant cousin of Cynthia Brown’s, didn’t learn about his connection to 1898 until five years ago.
A history professor at Washington University in St. Louis, he was talking to an aunt about his work, which focuses on historical racial violence, trauma and redress.
“That’s what happened to us in Wilmington,” his aunt said. His mother’s side of the family — also direct descendants of Alfred Howe — had fled the city after 1898, he learned.
Ward, in his early 40s at the time, marveled that he had never heard about this racial trauma. But it also made sense to him.
“There’s a lot of silence around these histories,” Ward said. “For immediate descendants and survivors, there is undoubtedly a lot of pain and frustration. … But the silence of one generation means that the next generation will be silent without knowing it.”
History lives with us, even if we can’t or don’t acknowledge it, Ward said. He reflected on the parallels between 1898 and now: the determination by White people to maintain dominance as the country’s demographics shift, attempts to suppress the Black vote, the threat of armed violence.
He noted that in 1898, the entire state of North Carolina, including Republicans, chose not to intervene, “legitimizing racial terror.”
In the years after the coup, the White organizers acquired wealth and power. One became governor of North Carolina. Another was elected to the U.S. Senate.
Yet now, amid the country’s racial tumult, “there are people who are working against these tides,” Ward said, “to do the truth-telling and the bearing witness and the trust-building.”
One of them is Cynthia Brown, who moved back to Wilmington in 1993 to fulfill her promise to her father. She began researching the Howes’ history and became historian at St. Stephen AME, Athalia’s church. She watched as the streams of mostly White newcomers began changing the rhythms of her native city, without knowing what came before them. But some of the new arrivals gave her hope. They had bothered to learn history.
When White tech entrepreneur Joe Finley moved to the area from Chapel Hill in 2002, the racial inequalities unsettled him. “I could go out about my business in certain spaces and never see a Black person at all,” said Finley, co-founder of Castle Branch, a compliance management company.
The economic gulf is wide. At $27,733, the median Black household income in New Hanover County is less than half that of White households, according to 2018 Census data.
About five years ago, Finley watched “Wilmington on Fire,” a documentary about 1898 and learned of Wilmington’s long-ago history of Black entrepreneurship.
Finley, 51, is now trying to play a part in reviving it. He has invested in a start-up called Genesis Block, a minority-business-development services company founded by two young Black Wilmington-area natives.
He has also been encouraging Cedric Harrison, the 32-year-old founder and executive director of community nonprofit Support the Port, who grew up in a poor neighborhood near Brooklyn. Harrison wants to launch a tour company showcasing Wilmington’s post-Civil War African American community.
In a successful TEDx video pitch for a business development fellowship, Harrison dreamed aloud of reviving the city’s once-flourishing Black entrepreneurial class.
On a warm mid-October day, Harrison pulled up in the parking lot at the 1898 Monument and Memorial Park in Brooklyn and lumbered out of his teal 2008 Infiniti EX35. He was on a trial-run for his tour.
There on the brick path before the memorial‘s towering bronze oars stood “Miss Cynthia,” one of the “elders” whom he credits with helping him get the historic nuances right.
Brown, who gives tours with the Cape Fear Museum historian, set about explaining the memorial to a visitor. She gestured up at the oars, glinting in the bright sunlight across the highway from the Cape Fear River. The memorial‘s important visual link to the river, she pointed out, is now blocked by a new condominium building.
The designer of the memorial, Ayokunle Odeleye, used the paddles symbolically to refer to water, a medium in African spirituality for moving from this life to the next. The memorial, dedicated in 1998, was also meant to symbolize Wilmington’s journey to acknowledging the events of a century before.
While Brown said the memorial was “a first step toward getting the history of Wilmington on the radar,” she worries the city’s commitment is not fully there.
There is no annual event commemorating Nov. 10, no museum, she notes. The oars stay blackened with tarnish too long, she said, before the city thinks to shine them again. And the low gray walls that are part of the memorial are already cracking and crumbling.
Standing before the memorial, she thought aloud about her great-grandmother Athalia Howe, who was living just a few blocks away that Nov. 10 when she saw her neighbor gunned down. Who in Wilmington would remember Athalia’s story and the slaughter and the coup and the stolen dreams, she wondered, once she and the other guardians of that history were gone?
'Don’t worry’
After about an hour in line on Oct. 15, Brown finally entered the auditorium to vote at Cape Fear Community College. She checked in with the poll worker at a table near the wall and signed next to her name, then crossed over to another to pick up her white paper ballot. She walked over to the rows of blue polling stations, stopped at one near the exit door and began to ink in the circles of her choices.
As she marked her ballot, Brown said, she felt a surreal calm descend. She had done her duty. She was able to exercise the right to vote that her great-grandmother had suffered for.
She thought of it all — the push for racial progress and the attempts to roll it back.
“I had this very good feeling,” she said. Enough time had passed, enough had changed, there were more people trying. “Something told me: ‘Don’t worry. This is not 1898.’ ”
Sen. Susan Collins listens during a hearing. (photo: Greg Nash/AP)
Susan Collins Backed Down From a Fight With Private Equity. Now They're Underwriting Her Reelection.
Theodoric Meyer and Justin Elliot, POLITICO and ProPublica
Excerpt: "In late November 2017, Senate Republicans were racing to secure the votes for their sweeping tax overhaul. With no Democrats supporting the bill and even some Republicans wavering, Sen. Susan Collins, the Maine Republican, found herself with enormous leverage."
The Maine Republican senator has become the No. 1 Senate recipient of private equity donations.
The day before the vote, she offered an amendment to make the legislation, which lavished tax cuts on corporations and the wealthy, more equitable. It expanded a tax credit to make child care more affordable. To pay for it, she took aim at a tax break cherished by the private equity industry.
Then Collins backed down. The day after she introduced it, as the Senate voted on the bill, a Republican Senate aide told a Treasury Department official that Collins was “no longer offering her amendment,” according to emails obtained by ProPublica through a Freedom of Information Act lawsuit. Her retreat was a significant victory for Senate Majority Leader Mitch McConnell. Collins put aside her opposition and voted for the bill, which passed 51-49.
Her turnabout has been one of the mysteries surrounding the $1.5 trillion tax bill, which slashed the corporate rate. The new emails and interviews shed light on how quickly Collins climbed down from her amendment proposal and how the industry maneuvered to preserve the break in the new law, which remains President Donald Trump’s most important legislative achievement.
Nearly three years later, Collins is facing a tough reelection battle and the private equity industry has become her most reliable source of donations. She has gotten more than half a million dollars in campaign contributions from the private equity industry this cycle, more than any other senator, according to the Center for Responsive Politics, which tracks political donations.
What’s more, Steve Schwarzman, the billionaire chairman and chief executive of the private equity giant Blackstone, has given $2 million to a super PAC backing her. (Schwarzman, a major Republican donor, has also given $20 million to a super PAC supporting Collins and other Republican Senate candidates.) The failure of Collins’ amendment likely saved Schwarzman alone tens of millions of dollars in taxes, according to tax experts.
Annie Clark, a Collins campaign spokeswoman, said Collins secured other significant changes to the bill. The amendment cutting carried interest stood no chance because it would’ve required 60 votes to pass if the Senate had voted on it, she said.
“Given the opposition to the amendment at the time — not only from Republicans, but from Democrats as well — it would certainly have failed,” Clark said in a statement.
A Schwarzman spokeswoman said in a statement, “Steve has long supported Senator Collins because of her independence, hard work and integrity. He does not closely follow all of her specific policy positions.”
The carried interest loophole, as its critics, including Collins, have called it, has long been the target of reform efforts.
The tax break is especially lucrative for the private equity industry, which invests in non-public businesses. A major way that executives at private equity firms like Blackstone make money is by taking a share of profits when the companies they invest in are sold.
The debate over carried interest centers on how this money should be taxed: as an investment return for private equity executives or a bonus that the firm’s clients pay for good performance. Today, it’s treated like an investment and taxed at a lower capital gains rate. If it were counted as a bonus, it would be taxed like part of the executives’ salaries, at the higher ordinary income tax rate. That discount — currently around 20 percentage points — in what Wall Street executives owe to the government quickly adds up to tens of billions of dollars.
When Trump became president and Republicans started pursuing an overhaul of the tax code, private equity had reason to be worried. The party had a long wish list of tax cuts but a limited number of ways to pay for them without increasing the deficit by more than Senate rules allowed, $1.5 trillion over 10 years. Eliminating carried interest, as Trump had proposed, was one of them.
And the tax break had faced years of opposition. The Obama administration made an ultimately unsuccessful attempt to raise the carried interest tax rate, an effort that Schwarzman famously compared to the Nazis invading Poland. (He later apologized for the analogy.)
Trump himself repeatedly complained about carried interest during his presidential campaign. “These are guys that shift paper around and they get lucky,” he said in 2015. “They are paper-pushers. They make a fortune. They pay no tax. It’s ridiculous, OK?”
To blunt the effort, the American Investment Council, the industry’s Washington trade group, proposed a concession it hoped would mollify lawmakers who might consider killing the loophole. AIC pitched House Republicans on modestly extending the amount of time that hedge funds, private equity firms and others must hold onto investments to qualify for the tax break, according to three people familiar with the matter.
That’s exactly what happened. Rep. Kevin Brady, R-Texas, the chairman of the House Ways and Means Committee, proposed tweaking carried interest rather than eliminating it. The holding period would change from one year to three years — a change that tax experts say does little to close the loophole.
“It’s laughable. Almost nobody will end up paying any additional tax. Tax planners have a million ways to Sunday to try to avoid it, some more legitimate than others, and the IRS is notoriously inept at auditing these types of issues,” said Gregg Polsky, a former corporate tax lawyer who is now a professor at University of Georgia law school.
But the loophole still faced a threat. AIC had identified Collins as a senator who might come after carried interest, according to two people familiar with the matter, and on Nov. 30, Collins spoke on the Senate floor to pitch a handful of amendments to the bill.
One priority, she said, was to alleviate the burden on poor families of the costs of care for children or elderly relatives. And to raise money for this new government subsidy, she would roll back Wall Street’s carried interest tax break.
“These are the lowest income families who need help the most in paying for child care or care for a dependent, elderly parent or grandparent or other relative; yet virtually none of them qualify for the credit,” Collins said. “To pay for making the child and adult dependent care credit refundable, my amendment would close the carried interest loophole, a tax reform that the president has endorsed.”
Collins’ staff had reached out to academics who specialize in the arcane details of carried interest to help them craft the legislative language, according to one Senate tax aide. She settled on upping the holding period from three years, as Brady has proposed, to eight — which, experts say, would have significantly eroded the tax break’s value.
As the Senate was moving toward passing the bill the day after Collins pitched her amendment, Drew Maloney, the Treasury Department’s assistant secretary for legislative affairs, emailed the chief of staff to Sen. Rob Portman, R-Ohio, asking what had “happened with carried interest.”
“Collins no longer offering her amendment,” replied Portman’s chief of staff, Mark Isakowitz.
Collins “[c]ame up with a different pay for to fund her medical expense deduction so she isn’t offering it any more,” Isakowitz continued.
It’s unclear exactly what Isakowitz meant; he appears to have conflated Collins’ amendment to expand the child and dependent tax credit — for which closing the carried interest loophole was a “pay for,” Washington jargon for a revenue-generating measure that offsets a tax cut — with another amendment she proposed retaining a tax deduction for medical expenses and lowering the income threshold necessary to claim it.
Maloney declined to comment. So did Isakowitz, who now runs Google’s Washington office.
It’s not clear exactly why Collins dropped her last-minute, long-shot attempt to kill carried interest. Three other amendments that Collins introduced on the same day made it into the bill, including an expansion of the medical expense tax deduction and preserving taxpayers’ ability to deduct up to $10,000 in state and local income taxes from their federal tax returns.
Clark, Collins’ spokesperson, said the senator continues to support closing the carried interest loophole to pay for an expansion of the child and dependent care tax credit, but the lack of support for it at the time meant the amendment “had absolutely no chance” of making it into the bill.
“Any claim that Senator Collins didn’t pursue this amendment because of any lobbying effort is completely false,” she said. “Anyone who knows her knows that she always does what she thinks is right. Any insinuation to the contrary is false — and an insult to her integrity.”
Maloney, who, internal Treasury emails show, kept close tabs on the carried interest issue throughout 2017, left the administration six months after the tax overhaul passed to take a job running the American Investment Council, the private equity trade group. He later hired Brad Bailey, another top Treasury Department official, to work as one of the trade group’s lobbyists.
Another Treasury Department official, Jared Sawyer, has lobbied for AIC since leaving the administration to take a job at a lobbying firm. And Eli Miller, the chief of staff to Treasury Secretary Steve Mnuchin, who was deeply involved in the tax overhaul, left government last year to become a government relations executive at Blackstone.
While Collins’ Democratic opponent, Sara Gideon, has outraised Collins’ campaign, Wall Street billionaires have stepped up to boost the pro-Collins 1820 PAC, which can accept unlimited donations and has spent heavily on TV and other ads. Schwarzman is the group’s single-largest donor. Behind him is Ken Griffin of Chicago hedge fund giant Citadel, who has chipped in $1.5 million.
Citadel’s lobbying disclosures show the firm lobbied Congress on the carried interest issue in 2017, as well as the broader tax bill. A Citadel spokesman pointed to Griffin’s comments several years ago on carried interest.
“Almost all the income that we generate is short term in nature,” Griffin said in 2013. “So my tax rate is pretty much the highest federal marginal rate. So I don’t have a lot of skin in the game on this issue from my personal vantage point but I have an interest in this as a matter of principle.”
Griffin then said he believed the current favorable tax treatment of carried interest should be maintained.
Gideon has no similar outside group supporting her and her campaign has received $242,000 in donations from people who work in private equity, according to the Center for Responsive Politics. A narrow favorite in the race, Gideon has attacked Collins for her support of the tax overhaul.
In December 2017, when it became clear that, despite the president’s promises, the tax bill would not meaningfully address carried interest, Axios’ Mike Allen asked Gary Cohn, the director of Trump’s National Economic Council, what he would change about the bill if he could change one thing.
“We would’ve cut carried interest,” he replied. “We hit opposition in that big white building with the dome at the other end of Pennsylvania Avenue every time we tried.”
When Allen pressed Cohn to explain what had happened, he alluded to the power that hedge funds, private equity and venture capital wield in Washington. “Look, the reality of this town is that constituency has a very large presence in the House and the Senate, and they have really strong relationships on both sides of the aisle,” he said.
Now the industry is preparing to fight the same battle again. Joe Biden has proposed raising capital gains taxes for those who make at least $1 million a year to equal the income tax rate, effectively eliminating the carried interest loophole for the richest Americans.
Biden’s plan to kill carried interest does not appear to have dented his support from private equity.
Jon Gray, Blackstone’s president, hosted a fundraiser for Biden in July and introduced him at another one earlier this year. Tony James, another top Blackstone executive, hosted one in June. (Gray and James have also given a combined $2.25 million to the Senate Majority PAC, which supports Democratic Senate candidates including Gideon.) And Alex Katz, a former aide to Senate Minority Leader Chuck Schumer who now works in government relations for Blackstone, is raising money for Biden’s transition effort.
The Biden campaign declined to comment.
Outside the Notre-Dame basilica in Nice, France, on Thursday. The attack at the church comes just weeks after the beheading of a teacher near Paris. (photo: Daniel Cole/AP)
3 Dead in Church Attack, as France Experiences Dual Emergency
Lori Hinnant and Daniel Cole, Associated Press
Excerpt: "A man armed with a knife attacked people inside a French church and killed three Thursday, prompting the government to raise its security alert status to the maximum level hours before a nationwide coronavirus lockdown."
The attack in Mediterranean city of Nice was the third in two months in France that authorities have attributed to Muslim extremists, including the beheading of a teacher. It comes during a growing furor over caricatures of the Prophet Muhammad that were republished in recent months by the satirical newspaper Charlie Hebdo — renewing vociferous debate in France and the Muslim world over the depictions that Muslims consider offensive but are protected by French free speech laws.
Other confrontations and attacks were reported Thursday in the southern French city of Avignon and in the Saudi city of Jiddah, but it was not immediately clear if they were linked to the attack in Nice.
French President Emmanuel Macron said he would immediately increase the number of soldiers deployed to protect schools and religious sites from around 3,000 currently to 7,000, and France's anti-terrorism prosecutor opened an investigation. French churches have been ferociously attacked by extremists in recent years, and Thursday's killings come ahead of the Roman Catholic All Saints' holiday.
The assailant was wounded by police and hospitalized after the killings at the Notre Dame Basilica, a half-mile (less than a kilometer) from the site in 2016 where another attacker plowed a truck into a Bastille Day crowd, killing dozens of people. Thursday's attacker was believed to be acting alone, and police are not searching for other assailants, said two police officials, who spoke on condition of anonymity because they were not authorized to be publicly named.
"He cried 'Allah Akbar!' over and over, even after he was injured," said Nice Mayor Christian Estrosi, who confirmed a woman and a man died inside the church, while a second woman fled to a nearby bar but was mortally wounded. "The meaning of his gesture left no doubt."
Shots punctuated the air and witnesses screamed as police stationed at the grandiose doors to the church appeared to fire at the attacker inside, according to videos obtained by The Associated Press. For a time after the attack, explosions could be heard as sappers detonated suspicious objects.
It was the third attack since Charlie Hebdo republished the caricatures in September as the trial opened for the 2015 attacks at the paper's offices and a kosher supermarket. The gunmen in that attack claimed allegiance to the Islamic State group and al-Qaida, which both recently called anew for strikes against France.
A verdict is planned for Nov. 13, the fifth anniversary of another series of deadly Islamic State attacks in Paris.
The series of recent attacks come amid renewed outcry over depictions of Islam's most revered prophet — whose birthday was marked in several countries Thursday — and the French government's fierce defense of the right to publish and show them. Muslims have held protests in several countries and called for a boycott of French goods. Dozens of Pakistani students rallied in the capital Thursday to denounce Macron.
"With the attack against Samual Paty, it was freedom of speech that was targeted," Prime Minister Jean Castex told lawmakers Thursday, referring to the teacher who was beheaded after showing his class caricatures of the prophet during a civics lesson. "With this attack in Nice, it is freedom of religion."
Earlier, the lower house of parliament suspended a debate on France's new virus restrictions and held a moment of silence for the victims. Castex rushed from the hall to a crisis center overseeing the aftermath of the Nice attack and later returned to announce the alert level increase. Macron left for Nice almost immediately.
"Very clearly, it is France which is under attack," Macron said as he stood before the church. He added that all of France offered its support to Catholics "so that their religion can be exercised freely in our country. So that every religion can be practiced. "
In Avignon on Thursday morning, an armed man was shot and killed by police after he refused to drop his weapon and a flash-ball shot failed to stop him, one police official said. And a Saudi state-run news agency said a man stabbed a guard at the French consulate in Jiddah, wounding the guard before he was arrested.
While many groups and nations have been angered or frustrated by France's position on the cartoons, several issued their condolences Thursday, as did France's traditional allies.
The French Council of the Muslim Faith condemned the Nice attack and called on French Muslims to refrain from festivities marking the birth of Muhammad "as a sign of mourning and in solidarity with the families of victims and the Catholics of France."
Turkey's Foreign Ministry strongly condemned the attack. "We stand in solidarity with the people of France against terror and violence," the statement said.
Relations between Turkey and France hit a new low after Turkey's president accused Macron of Islamophobia over the caricatures and questioned his mental health, prompting Paris to recall its ambassador to Turkey for consultations.
The attack in Nice came less than two weeks after Paty, the teacher, was beheaded. In September, a man who had sought asylum in France attacked bystanders outside Charlie Hebdo's former offices with a butcher knife.
French Roman Catholic sites have also frequently been targeted, including the killing of the Rev. Jaqcues Hamel, who had his throat slit while celebrating Mass in his Normandy church by Islamic militants and a plot to bomb Paris' Notre Dame cathedral. Those attacks were claimed by the Islamic State group, which also is believed to have recruited a man now on trial for an unsuccessful plot to attack a church.
Nice's 19th-century basilica Notre Dame de l'Assomption is the largest church in the city, but smaller and newer than the cathedral 1 mile (2 kilometers) away. The basilica's twin neogothic towers are a landmark feature in the heart of the city.
Joe Biden. (photo: Chip Somodevilla/Getty)
Next Week, the US Leaves the Paris Agreement. How Do We Get Back In?
Shannon Osaka, Grist
Osaka writes: "When Americans wake up on November 4, they may not know who the next president of the United States will be - unless Democratic nominee Joe Biden or President Donald Trump wins in a landslide, the country could be in a state of uncertainty for weeks."
But there’s at least one thing Americans can count on to happen next Wednesday: The U.S. will complete the years-long process, started by President Trump in 2017, to drop out of the Paris climate agreement.
There will be no ceremonial exit with the other 189 countries remaining in Paris waving a sorrowful goodbye to the American delegation. Still, that doesn’t mean the departure won’t be momentous. By next week, the United States will be virtually alone on the world stage, the only big country besides Iran and Turkey not signed on to the landmark agreement to limit greenhouse gas emissions.
“It’s been heartbreaking,” said Andrew Light, a former senior climate official in the Obama Administration who helped negotiate U.S. involvement in the agreement.
If President Trump wins the election, he’ll almost certainly keep the U.S. out of the agreement for another four years, leaving approximately 15 percent of the planet’s emissions out of the purview of the climate pact.
If Biden wins, on the other hand, he has vowed to rejoin the agreement on day one of his new administration (it would take approximately 30 days to become official). But even the act of rejoining will conjure up a whole new batch of problems — forcing the U.S. to make up for lost time and move quickly on climate policy.
“You can’t be a party of the Paris Agreement unless you’ve got a commitment in good standing,” said Light. “And that’s required, not optional. We would be in arrears by the time Biden would rejoin Paris.”
The Paris accord requires all member countries to set commitments to lower their greenhouse gas emissions. Even though those goals aren’t legally binding, they are a crucial part of the “name-and-shame” system that countries have been using to police each other’s carbon pollution.
By the time Biden could rejoin, however, the U.S. would already be behind on its previous promise to reduce emissions by 26 to 28 percent below 2005 levels by 2025. (As of last year, U.S. emissions were down about 12 percent.) And it would have to hastily cobble together a new goal, as all parties to the agreement are expected to meet in Glasgow next November to unveil their new, upgraded commitments for 2030.
“2021 is all about signaling that countries are going to ratchet up their ambition” to cut emissions, said Rachel Cleetus, the policy director for climate and energy at the Union of Concerned Scientists.
But countries don’t just have to set goals, they also have to show that they have a plan to hit them. And that’s where the U.S. record looks a little shabby. When President Barack Obama signed the agreement in 2016, Republicans controlled both the House and the Senate, so he didn’t have much hope of getting any climate legislation through Congress.
Instead, Obama promised his fellow world leaders that the U.S. would cut emissions through something called the “Clean Power Plan,” which would have pushed the U.S. electricity grid toward renewables and away from fossil fuels. The Clean Power Plan, however, got held up in the courts, and was never implemented; in 2019, President Trump repealed it entirely.
“There’s no shortage of people in other countries who are skeptical of the United States backing up a commitment only with presidential action,” Light said. “They feel like they kind of got burned.”
According to Light, that skepticism means that Biden would have to show up in Glasgow with more than just promises — he may also have to bring proof that the U.S. has started taking action. That could pressure Biden, who has already placed climate high on his list of priorities, to focus his earliest legislative efforts on passing a stimulus bill that prioritizes clean energy. (Biden has vowed to put $2 trillion towards such efforts, and his plan to address climate change is actually favored by a majority of American voters.)
Of course, there are still many hurdles in the way of passing such a bill. Democrats would have to win back the Senate and also sneak any legislation past the ever-annoying filibuster. But with Glasgow on the horizon, the Paris Agreement might do what it was always supposed to do — pressure sluggish countries, like the United States, to stop dragging their feet.
After all, other countries are surging ahead: On Monday, Prime Minister Yoshihide Suga of Japan vowed that the world’s third biggest economy would go carbon neutral by 2050. China and the European Union have already made similar commitments. If the U.S. wants to catch up, it will have to act fast.
“There needs to be a high bar for what happens next year,” Cleetus said. “It needs to be a race to the top, a high-ambition exercise — not continuing to evade responsibility.”
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