South Carolina House Panel to Hear Ethics Complaints Against Governor

Thursday, she faces a State House ethics hearing over whether she blurred the lines between her work as a legislator and her work as a hospital fund-raiser and a business development consultant with an engineering firm.

From the Republican governor’s perspective, the hearing is just more of the same: attacks by Democrats and the Republican Party old guard who resent her Tea Party-style efforts to change government and the fact that she is a woman and a minority in a state that has had relatively few of either in positions of power.

For those who pushed for the hearing — most notably John Rainey, one of the most powerful Republican fund-raisers in South Carolina — it is a step in a long-fought battle to prove that the governor has been less than transparent and improperly mixed her governing duties and her business enterprises.

For many voters in South Carolina, however, the hearing is not much more than another twist in the state’s bare-knuckled brand of politics based on personal grudges and its history of conflict between governors and legislators.

“Unfortunately, it is being perceived as politics as usual,” said Robert W. Oldendick, a professor at the University of South Carolina who is director of the Institute for Public Service and Policy Research. “Unless there’s a smoking gun that hasn’t been revealed, a week from now we’ll say there was a little damage done to the governor.”

The Republican-heavy House Ethics Committee will not call Ms. Haley to testify during the two days it examines the issues, but her lawyer will present her case.

On the committee’s witness list are business executives and lobbyists for companies including the Lexington Medical Center and BlueCross BlueShield of South Carolina, as well as governmental affairs experts.

They are expected to describe Ms. Haley’s role in two business deals when she was a state representative from Lexington County from 2005 until she became governor.

South Carolina lawmakers serve part-time, and most hold other jobs. One of Ms. Haley’s was to raise money for the medical center’s foundation, at a salary of $110,000 a year. The hospital wanted to open a new heart center and needed governmental approval as part of the process.

Ms. Haley maintains that her legislative efforts to support the heart center were because the hospital, which was in her district, was part of her constituency. Her other efforts to raise money for the foundation did not fall under lobbying rules, her lawyer, Butch Bowers, said.

The other issue centers on part-time consulting Ms. Haley did for Wilbur Smith Associates, an engineering firm in Columbia that paid her a total of $42,000 to help develop business. The firm had worked on a project to create a state farmers’ market.

Ms. Haley would not discuss the hearing directly, but Mr. Bowers and members of her staff have characterized it as a political witch hunt led by a man angry that Ms. Haley did not try to curry his favor to win the governorship.

In her recent memoir, Ms. Haley describes seeking Mr. Rainey’s support when she was planning her campaign. He asked to see her tax records to make sure, she said he told her, that she did not have any connections to terrorists in her background — a comment he said in later interviews that he did not recall, but dismissed as most likely a joke.

Ms. Haley, who is of Indian descent, went on to win without the support of Mr. Rainey, long an important figure in helping to bankroll political candidates in South Carolina.

“This a complaint brought by an old Republican crank who called her a terrorist and the chairman of the Democratic State Party, so it’s pretty clear,” said Tim Pearson, her chief of staff.

That Democratic chairman is Richard A. Harpootlian. He said Ms. Haley was using that explanation to present herself as the victim of political scoundrels who do not want things to change.

The political alliance might seem unlikely, but Mr. Harpootlian said he and Mr. Rainey were united in trying to hold accountable a governor they see as secretive and ethically compromised.

“Both of us have a sense that justice, no matter what the political affiliation, should prevail,” he said. “What’s clear is this governor has avoided answering the questions and has deflected every allegation as politics.”

The men filed a lawsuit last year over the same assertions. In March, a Circuit Court judge dismissed it, saying the court was not the proper venue to examine legislative ethical issues.

If the committee decides the governor did violate ethics, it could issue a reprimand or refer the case to the attorney general for criminal investigation. Most likely, Mr. Oldendick said, the hearing will only underscore what is becoming obvious to many in the state.

“For as good of a job as she did campaigning and getting elected,” he said, “her inability to relate to members of her own party in the General Assembly has been frankly surprising.”

Robbie Brown contributed reporting.

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Deficit-cutting panel looking at benefits, taxes (AP)

By DAVID ESPO and ANDREW TAYLOR, Associated Press David Espo And Andrew Taylor, Associated Press – Thu Oct 27, 5:55 pm ET

WASHINGTON – Rival deficit-cutting plans advanced by Republicans and Democrats on Congress' secretive supercommittee would both mean smaller-than-expected cost of living benefit increases for veterans and federal retirees as well as Social Security recipients and bump up taxes for some individuals and families, according to officials familiar with the recommendations.

In all, the changes would reduce deficits by an estimated $200 billion over a decade, a fraction of the committee's minimum goal of $1.2 trillion in savings.

A final decision by the panel on legislation to reduce deficits is still a few weeks off, and given the political difficulties involved, there is no certainty that the six Republicans and six Democrats will be able to agree.

The two sides exchanged initial offers earlier this week, and each side swiftly found fault with the others' proposal in the privacy of the committee's rooms as well as in public.

House Speaker John Boehner, R-Ohio, noting published reports that Democrats are seeking $3 trillion in higher taxes, said, "This is the same number that was in the president's budget, the same number that — that they — I don't know that they found any Democrats in the House and Senate to vote for."

"I don't think it's a reasonable number," he said. Boehner also chided Democrats for recommending $50 billion in savings from Medicaid over the next decade, well below what Republicans are seeking.

"Let's understand over the next 10 years, we're going to spend $10 trillion on Medicaid. I just think there's a lot more room there to help find common ground," he said.

At the same time, Boehner emphasized, "I am committed to getting to an outcome" that clears the committee and Congress. The speaker negotiated privately with President Barack Obama over the summer in deficit-reduction talks that failed to produce an agreement.

At a news conference of her own, House Democratic leader Nancy Pelosi of California said she wanted a compromise that was "big, bold and balanced," a phrase that Democrats use to convey an insistence on higher tax revenue.

She pointedly declined to embrace what Democrats had presented to the supercommittee. She called it "Sen. Baucus' package," a reference to the Montana Democrat and chairman of the Senate Finance Committee. That ran directly counter to his aides' statements earlier in the week that he was speaking for a majority of Democrats on the panel — and tacit confirmation that at least two of the party's members had not signed on as supporters.

Ironically, while the Republican and Democratic panel members remain far apart, one of the relatively few items in common was a potentially controversial recommendation to change the calculation for annual cost-of-living increases in federal programs as well as the yearly adjustments in income tax brackets.

According to the nonpartisan Congressional Budget Office, the recommended change "produces lower estimates of inflation than the traditional" measurement of the Consumer Price Index. Since December 2000 the difference on average has amounted to 0.3 percentage points, according to the agency.

A decision to base annual cost of living increases on the new calculation would lower Social Security costs by $108 billion over a decade, and the impact on benefits for federal civilian and military pension programs and veterans' benefits would save an additional $23 billion, according to calculations made in February 2010.

Congressional experts said the list of federal programs that would be affected is extensive, and included Medicare, Medicaid, food stamps and more, but the absence of a written description by either side in the deficit negotiations makes a complete listing impossible.

Officials in both parties said their plans would affect income tax brackets, which currently are adjusted annually to make sure that inflation alone does not expose more earnings to taxation.

By slowing the rate of the adjustment, more income would be taxed than is currently forecast, a change that Congress' Joint Tax Committee recently estimated would produce $59.6 billion in revenue to the Treasury over a decade.

Just as changes to Social Security and benefit programs are politically problematic for Democrats, tax increases are difficult for Republicans.

Americans for Tax Reform, an organization led by anti-tax advocate Grover Norquist, earlier this year said slowing the pace at which tax brackets are adjusted for inflation "would most certainly be a tax hike."

There was one caveat, though.

"This idea can of course be part of a discussion of comprehensive and revenue-neutral tax reform, but stand-alone it is a tax hike."

Both Republicans and Democrats included tax reform in their presentations inside the supercommittee, and the issue has great political appeal.

But the two sides differ dramatically on the details. Democrats called for tax reform that would generate an additional $1 trillion in revenue over a decade, while Republicans said they envisioned no increase.

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House panel to take up 3 trade agreements (AP)

WASHINGTON – House Republicans are bucking demands from the Obama White House to include renewal of a U.S. job training assistance program in long-pending legislation providing free-trade agreements with South Korea, Colombia and Panama.

The standoff could jeopardize passage of the trade pacts, which are to be brought before the Ways and Means Committee later this week.

The panel, which oversees trade agreements, has scheduled a Thursday meeting to debate and vote on the drafts of legislation to implement the three new deals signed during the George W. Bush administration but stalled in past congresses controlled by Democrats.

The Obama administration now supports the agreements, after negotiated changes in the accords including greater access for U.S. autos in South Korea and commitments by the Colombian government to end the suppression of worker rights. But it has also demanded that the trade package be linked to renewal of expired sections of the Trade Adjustment Assistance program which provides financial and retraining aid to displaced workers.

Republicans have supported TAA in the past, but have balked both at the cost of the program, about $1 billion a year, and the linkage with the trade agreements. Last Thursday the Finance Committee in the Democratic-led Senate was to have met to consider the trade deals and TAA together, but the hearing was canceled after Republicans on the committee boycotted.

Finance Committee chairman Max Baucus, D-Mont., in a statement Tuesday, said: "right now, our competitors are gaining ground in these vital markets and jobless Americans in need of opportunities are left waiting while these trade agreements languish." He added, "we need to come together to move these three trade agreements and Trade Adjustment Assistance forward as soon as possible because American workers and small businesses simply cannot afford to wait any longer."

GOP allies in the business committee, such as the U.S. Chamber of Commerce, have urged Congress to move quickly on the three trade agreements, saying they could boost U.S. exports by $13 billion and create tens of thousands of jobs. The Chamber said it supported TAA and said it appreciated bipartisan efforts to reach a reasonable compromise on TAA legislation.

Ways and Means aides said the House could still consider a TAA bill separately, but they were waiting for guidance from the GOP leadership.

The ranking Democrat on the committee, Sander Levin of Michigan, and the top Democrat on the trade subcommittee, Jim McDermott of Washington, said there were "two fundamental problems" with the GOP approach — the omission of TAA and the failure to incorporate into the Colombia agreement an "action plan" by which the Bogota government commits to improving labor rights in the country.

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