Hillary Clinton needs the GOP to keep control of the House of Representatives. Why? Because that is the only way she can avoid being crushed by the colliding demands of the progressives who have taken over her party and the bigwigs who have funneled tens of millions of dollars to her campaign. If elected president, she can spend the next four years blaming obstructionist House Republicans for everything she fails to do. In other words, look for Hillary to deliver on the central promise of her campaign: four more years of Obama.
There are three important issues where Hillary’s divided supporters are at odds: raising taxes on the wealthy, doubling down on Wall Street regulations and putting U.S. oil and gas reserves off limits. While Progressive Hillary has matched Bernie Sanders in demanding a revolutionary approach to these issues, Centrist Hillary will balk.
Hillary has vowed to raise taxes significantly on upper-income Americans and on corporations, to make them “pay their fair share,” as she so eloquently puts it. Among other measures, she has promised to close the “carried interest” loophole enjoyed by private equity and hedge fund managers. This tax item allows some investment managers to pay tax at the long-term capital gains rate of only 20 percent rather than the normal income tax rate of 39 percent. Eliminating this tax rule would presumably cost Clinton supporters like Haim and Cheryl Saban a pretty penny. Their success in private equity has allowed them to contribute over $11 million to left-leaning groups in this election cycle.
People across the political spectrum have been talking about closing the carried interest loophole for the past ten years. Jeb Bush and Donald Trump agreed early in the primary season that the tax gimmick should be eliminated, with Trump claiming that hedge fund managers have been “getting away with murder.” Obama campaigned on this issue in 2008. With both Democrats and Republicans in agreement, why hasn’t it gone the way of the Dodo?
Because some of the wealthiest people in our country have piled up billions taking full advantage of the rule to maximize their take-home pay, and they will make sure nothing changes. Politico reports that as a senator, when Hillary “had a chance to support a 2007 bill that aimed to curb a tax break she publicly decried for hedge fund and private equity executives [carried interest], she failed to sign on.”
Four years from now, chances are candidates will still be promising to eliminate this giveaway to fund managers.
Meanwhile, nothing excites the Sanders/Warren Left more than Hillary’s promise to get tough on Wall Street. During the campaign, she promised to double down on the Dodd-Frank regulations enacted in the wake of the financial crisis, strengthen the Volcker Rule, ensure that individuals and not just companies are held accountable for infractions, and increase oversight of the “shadow banking sector.”
Clinton needed to propose such measures to assuage concerns that she and husband Bill are much too cozy with Wall Street. Liberals blame Bill Clinton for undoing Glass-Steagall in 1999, which they say paved the way for the financial crisis, and they are uneasy that the Clintons have taken in more than $100 million in speaking fees, gifts to their foundation and campaign contributions since Bill left office in 2001.
Hillary has dismissed such ties, claiming that in 2007 she gave a speech in which she told Wall Street firms to “cut it out.” In reality, during that speech at NASDAQ headquarters, she gave a shout-out to her “wonderful donors” in the industry, praised bankers for contributing to the wealth of the nation and stated that Wall Street was not solely responsible for the financial crisis – “not by a long shot.”
Hillary also claims that as a senator she actively tried to curb bank excesses. In fact, she sponsored few bills related to the financial meltdown, and according to Politico, “No Senate committee took action on any of the bills, and they died without further discussion.”
In a speech to a Goldman Sachs audience, revealed by WikiLeaks, Hillary said that Dodd-Frank was enacted for “political reasons” and that “the jury is still out” on the bill’s effectiveness. Clinton also said, “Banks are not doing what they need to do because they’re scared of regulation.” She is correct, but that certainly is not the (Democratic) party line or the full-throated defense of the legislation that Hillary promised in an op-ed.
Hillary knows where her bread is buttered. Where Wall Street is concerned, status quo is king.
One of Hillary’s greatest leaps Left came early this year at a debate against Bernie Sanders in New Hampshire. Clinton, asked by an environmental activist if she would ban the extraction of fossil fuels on federal lands, answered, “Yeah, that’s a done deal.” Challenged to refuse further donations from energy companies, Clinton answered, “I’m going to pledge to stop fossil fuels, that’s a lot better.”
She knew better and told a Goldman audience that fracking is a “gift” that would help the U.S. achieve energy independence. “We can have a North American energy system that will be unbelievably powerful. If we have enough of it, we can be exporting and supporting a lot of our friends and allies.” Hillary is right. Exxon-Mobil, which has contributed millions to the Clinton Foundation, would back her up. Continuing to exploit our vast and cheap energy resources is critical to growing our economy, and would be vital to Hillary’s success in the Oval Office. She will not want to block that progress.
As president, Hillary Clinton would protect the status quo. A GOP majority in the House would allow her to keep the support of discouraged progressives at reelection time. Just like Obama.