VOLUME No: 61 Issue No:4

Washington, D.C. - May 28, 2004

Republican Leaders Back a 527 Organization,
Setting a New Precedent for Campaigns

One of the largest campaign finance reform loopholes just got larger as Senate Republican Conference Chairman Rick Santorum (R-PA) and House Speaker J. Dennis Hastert (R-IL) recently consented to participate in fundraising events for the Leadership Forum, a GOP-allied 527 organization. “527” is the U.S. Tax Code designation given to political educational organizations that do not support or endorse specific candidates, and are one of the types of groups that were excluded from the campaign finance reform laws.

By agreeing to participate in events for the 527, Santorum and Hastert are effectively sending a message to Republican donors that the group is “ok.” Because of this, some would say that the Leadership Forum has gained an advantage over its competition and that this will affect which GOP group donors send their money to. Trying to clarify what has been called “muddy water,” Susan Hirshcmann, Majority Leader Tom DeLay’s (R-TX) former chief of staff, who is actually heading the group, commented that Hastert and Santorum will simply appear at events and will not raise soft money.

Opponents of this practice say that the distinction between attending an event for a soft-money group, such as the Leadership Forum, and soliciting money for them is basically worthless. The fear is that the FEC created a loophole which allows legislators to attend these fundraising events.

Either way, this issue surrounding the 527 groups will be one to keep an eye on as the election season heats up…

Rising Costs of Healthcare

Health care proposals have been developed by both Kerry and Bush. However, large and small businesses say that neither political party has incorporated proposals that will successfully bring down the rapidly increasing costs. Bush wishes to offer lower and middle income families a tax credit of approximately $1,000 in order to purchase their own health insurance. These costs would be controlled by monitoring medical malpractice lawsuits. Individuals that work for smaller businesses would be allowed to work together in order to bargain for improved private health care insurance. This would cost approximately $120 billion at the conclusion of 10 years.

Kerry’s proposal would cost significantly more money. Kerry is offering a $177 billion tax credit to families and then will allow them the option of obtaining insurance from the same federal employees’ health care plan. This is the same type of medical coverage that members of Congress use. He claims that this would decrease premiums drastically. Kerry also would like to expand Medicaid eligibility to include more children.

Business executives can identify with the enhancement of health insurance costs and agree that it is conceivably the largest risk to their future; in spite of this, businesses are not active enough in this debate and are mostly unwilling to choose a side.

In the 1990’s costs were more stable, but since then, there has been a rapid escalation of health insurance premiums. According to the Henry J. Kaiser Family Foundation, in 2001, the increase was 11 percent followed by 13 percent in 2002 and 14 percent in 2003. The AARP reported that the increase on brand-name prescriptions cost three times as much as the rate of inflation last year. Employers and politicians continue to search for a decent solution, but without the cooperation and input from both sides this solution may be one that is never reached.

Colorado Primary Proving Interesting

Rep. Mark Udall (D-CO) voiced his support for Democrat Ken Salazar for his party’s Senate nomination and officially nominated Salazar at last week’s state assembly. Salazar, Colorado’s Attorney General, is seeking the Senate seat currently occupied by Ben Nighthorse Campbell (R-CO), who announced earlier this year that he would not be seeking a third term in the U.S. Senate. Udall initially declared that he would run for the seat, but pulled out of the race to make room for Salazar.

Salazar, failed to obtain his party’s endorsement last Saturday at the Colorado Democratic assembly. Mike Miles secured a 51 percent majority and will have his name placed first on the ballot, above Salazar’s. Udall’s support may prove crucial in ultimately tipping the balance in Salazar’s favor.

Udall, who has served three terms in Congress, is a strong opponent to the war; Salazar says he would have voted for the Iraq war resolution. While Salazar had been deemed the favorite to secure the party’s nomination for the Senate seat in August, liberals in Colorado have a clear uneasiness about Salazar’s position on Iraq.

Udall’s support of Salazar will go far to gain additional Democratic support for Salazar. Udall is a strong supporter of civil rights and the environment, and as a representative of Boulder County, the most liberal county in the State, his support carries the trust and admiration of many liberals in Colorado

Some have offered that Salazar “played the race card” to convince Udall to step aside. Other sources indicate Udall’s decision to back out of the race is based on a long-standing friendship between the two and an amicable agreement not to run against each other in any race.
Ultimately, the Democratic nominee will likely face Pete Coors of Coors Brewing Company, who must secure the Republican primary from Rep. Bob Schaffer (R-CO).