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Hooks on Politics

Dennis Bonnen
State Rep. Dennis Bonnen (R-Angleton)

Who would have thought the biggest fight of the 84th Legislature would be over cutting taxes, an act normally beloved in the halls of the Capitol? Most of the headlines we’ve seen this session have been over guns, gay rights, the border and vouchers, but as the session comes to a close over the next month and a half, it seems likely that the headlining bout will be over two competing tax cut plans. It’s a showdown that is hugely consequential for the future of the state. And the plans offered by the two chambers seem, for now, irreconcilable.

There was some strangeness around the matter of tax cuts early on, as Lt. Gov. Dan Patrick and Gov. Greg Abbott seemed to compete over who would call for the biggest, boldest proposal. Dan Patrick asked for $4 billion initially, so Abbott called for $4.4 billion. The Senate answered with a proposal for $4.6 billion in cuts. All the while, the House budget writers kept mum, leaving room in their early budget proposals for tax cuts, but not producing a detailed plan at first.

The Senate proposal is strangely nonsensical. It chops the franchise tax, which is acceptable to almost all parties at the Lege, even Democrats. But the rest of Patrick’s proposal seems less than ideal. He aims to cut Texans’ property taxes. But the state doesn’t administer property taxes; local jurisdictions do. Patrick’s proposals would reimburse local jurisdictions to some degree, but other Senate proposals would greatly restrict the ability of cities and counties to take in revenue.

So Patrick would get to take credit for cutting taxes now, even though local governments around Texas, which are already swimming in debt and face uncertain fiscal futures, would pay the price. There’s also the fact that to make the math work on his proposal, Patrick wants to allow legislators to circumvent the constitutionally enshrined spending cap to pay for tax cuts, now and in the future…. while also tightening the spending cap to ensure that the state has less money to spend. If that doesn’t make sense to you, that’s because it doesn’t make sense.

The House took its time to respond. But last Wednesday, a top lieutenant of House Speaker Joe Straus, state Rep. Dennis Bonnen (R-Angleton), released the House tax plan. The lower chamber would cut franchise taxes too, but property tax relief is nowhere to be found. Instead, the House would lower the state sales tax rate from 6.25 percent to 5.95 percent.

Sales taxes are paid by everyone, not just property owners. And cutting the state sales tax doesn’t hurt local jurisdictions in the same way. What’s more, Bonnen and the House gave themselves a trump card—their tax plan totals $4.87 billion, allowing them to cutely claim that Patrick wants “smaller tax cuts.” Bonnen’s plan will have public testimony on Tuesday morning at the House Committee on Ways and Means meeting.

Neither tax cut package will mean much to the average Texan—certainly not compared to the size of the hole it blows in the state budget. The property tax cuts might mean about $200 a year for the average homeowner. But if you don’t pay property taxes—if you live in an apartment, for example—you get nothing.

Bonnen, meanwhile, boasts that the sales tax cut could mean $172 a year for “a family of four.” If that savings comes only from the reduced sales tax the family pays at stores, it assumes that the family of four is spending $57,000 on taxed goods every year, which is just a little bit less than the median total income of a four-person family in Texas.

To be fair, Bonnen’s analysis probably also assumes the family will save money from cheaper goods and services as a result of the business-side implications of the tax. Big businesses are the main beneficiaries of a sales tax cut, though its advocates would say the savings will get passed on to you.

To put it a different way, under the House plan, you’ll save 30 cents with each purchase of $100 of taxable goods. For every $1,000 of stuff you buy, then, you’ll be able to afford three hours of parking in downtown Austin. Oh happy day!

But the efficacy of these plans is beside the point—the fight has become a measuring contest of the virility of each chamber. Patrick slammed Bonnen’s plan, which he said in an unusually cutting statement was “out of step with Texans, my office, the Senate and the Governor.” He noted that Abbott had called for property tax relief in his State of the State speech and implied Abbott was on his side in this dispute, continuing his habit of putting words in the governor’s mouth, which is surely appreciated by Abbott’s team. (On Thursday, Abbott spoke briefly about tax cuts in Houston but said nothing specific on the issue of property vs. sales tax cuts.)

During a TV interview, Bonnen punched back. “It’s not my role to say what the governor thinks about tax cuts. Respectfully, it’s not the lieutenant governor’s either,” he said. Why was Patrick so focused on property taxes? “I think he’s just concerned about campaign promises he’s made,” said Bonnen.

How does this get resolved? Big business is steadfastly behind the House plan, while Patrick’s base loathes property taxes. Patrick and state Sen. Jane Nelson (R-Flower Mound), who runs the Senate Finance Committee, show no sign of backing down. “I have never had a constituent tell me they want a cut in sales tax—ever,” Nelson told reporters. “I’ve had lots of constituents come and complain about property taxes.”

Patrick can’t retreat completely from his property tax plan—he’s too far in. And, moreover, he needs a big and flashy signature accomplishment for his first session. He came in with too much bluster, and with too many promises made to the people who elected him, to leave the session with a few smaller education bills, and some money for border security wrestled from the House. This was a man who, in his inaugural address, promised to “secure the border in this session” and invoked the memory of Martin Luther King, Jr. to sell the changes he wants to make to state government. One imagines him staring intently at a full bathtub, attempting to part the waters with his mind.

Whatever his future plans are, he needs a trophy come June. And at this point, the best candidate for that trophy is a tax plan that doesn’t do much for most Texans, blows a giant hole in the budget of state and local governments, and requires trick budget math to pull off. Go figure, right? And the House is doubling down in its efforts to keep it from him with bad policy of its own.

Greg Abbott and Dan Patrick
Kelsey Jukam
Gov. Greg Abbott and Lt. Gov. Dan Patrick at the State of the State Address.

There are only 52 days until the 84th legislative session, in all its 140-day glory, bids us farewell. That’s less time than it sounds. In a little over a month, the final set of bill deadlines will begin to set in, choking any bills that haven’t already gathered momentum.

So how have the two chambers of the Legislature been performing so far? According to an analysis of the Lege through the 83rd day of session conducted by the Professional Advocacy Association of Texas, an association of lobbyists, the Senate has been unusually unproductive these last few months.

PAAT tallied up the bills that have made it past certain benchmarks in the legislative process—voted out of committee, for example—and compared the results to the same point in the last legislative session. It turns out that the House is working at about the same pace as it always has. In 2013, 364 House bills had been voted out of their committees by the 83rd day. This year, 362 had.

But Dan Patrick’s Senate, meanwhile, is moving as slow as molasses. In 2013, the upper chamber had moved 432 bills from committees to the floor. This year, only 229 bills have made the jump, a 47 percent decrease.

The House only passed eight bills by the 83rd day this session, as opposed to 10 in 2013. But the Senate had passed 276 by that point last session—whereas only 98 passed this year, a whopping 64 percent decrease.

Both chambers have plenty of time to advance their agendas over the next month, so why is this significant? It quantifies something notable about the Senate, which is that its performance hasn’t lived up to the expectations Patrick set for it. He barreled into office with a tremendous amount of energy. He’d bring next-generation super-duper conservatism to the masses in short order. During his inauguration, he patted his predecessors on the back for the many fine things they’d done “over the last 12 years since taking the majority. But it’s time to take it to the next level.” He told reporters and the public that the slow pace set by David Dewhurst was a thing of the past.

He trumpeted his rapid appointment of committee chairs as evidence he was getting the ball rolling quickly. Here’s what the Texas Tribune’s Ross Ramsey wrote about Patrick’s attempt to quicken the chamber’s pace at the time:

Naming committees quickly would give the Senate a head start on the House, perhaps setting up a flow of Senate bills to the lower chamber before the House is ready to send anything back.

It’s inside baseball, but it’s important: Legislators actually care whether a law resulted from a Senate bill or a House bill, even if hardly anyone else notices. More importantly, in the back-and-forth interplay of the two legislative chambers, an early start on the Senate side could pressure the House to get going on the upper chamber’s legislation — a subtle way of positioning the Senate’s agenda in front of the House’s own plans.

This was doubtless what Patrick intended, but roughly the opposite has happened. Patrick’s demolition of the two-thirds rule means that Democrats have no incentive to play along, so they’ve been dragging their feet and using delaying tactics. The Senate Republican caucus has been unsteady, with divisions between fire-starting freshmen and the few remaining senior statesmen. The House, by and large, has set the agenda. Patrick is making David Dewhurst look like Bob Bullock.

One easy rejoinder to this would be that the number of bills passed doesn’t reflect how much Patrick has actually advanced his agenda, but he doesn’t have much to show on that front either. The items he set out during his election campaign as his top priorities—he used to say eliminating in-state college tuition for undocumented Texans would be the first thing he’d do, for example—have mostly fallen by the wayside. (Yes, the bid to repeal in-state tuition got a hearing, but faced with strong opposition and little time left in the session, it’s almost certainly dead.)

Speaker Joe Straus’ House is a particularly unreceptive place for the policies Patrick most favors, and there’s not much he can do about it. To take another example: He’s put a great deal of emphasis on school choice in his years of public service, but vouchers are probably dead this session, too, and furthermore he seems to know it.

Instead, Patrick has spent a lot of energy on an incomprehensible tax cut plan, which faces an uncertain future and derision from both Democrats and Republicans. He’s been forced to push for bills, like open and campus carry, that he doesn’t seem to care much about personally.

There’s also the budget, the most important product of any legislative session. Last session, the Senate budget, skillfully shepherded by former state Sen. Tommy Williams (R-The Woodlands), passed out of the Senate Finance Committee by March 13 and was passed by the full Senate on March 20. This session’s Senate budget is… Well, where is it?

State Sen. Jane Nelson, the finance chair, last aired the Senate’s budget proposal (Senate Bill 2) on March 26. On Wednesday, she sent a budget proposal to the Senate floor by altering the House budget proposal (House Bill 1), which arrived in her committee after the lower chamber passed it last week. Next week, probably on Tuesday, April 14, the full Senate will consider the budget for the first time, almost a month behind last session’s pace.

All this is hardly fatal, and the Senate’s say in the budget process isn’t really affected by whether the House or the Senate’s budget bill is used. But it’s a sign that Patrick is letting happen exactly the thing he swore he’d prevent—he said he never understood why the Legislature let the calendar get so heavy on the back end. Now, presumably, he does.

There’s another possible consequence of the slow pace: the dreaded special session. The 83rd Legislature had three special sessions, at a time when everything was working pretty smoothly. Granted, the special sessions were in part caused by Gov. Perry’s desire to fight about social issues; Gov. Abbott doesn’t seem similarly inclined. It’s entirely possible Patrick and Straus tie up their differences with a neat bow by June 1. But what might the Legislature not get done by sine die?

Ken Paxton, after being sworn in, stands among Texas GOP VIP's: From left to right, Governor-elect Greg Abbott, Senator Ted Cruz, Lt. Gov. David Dewhurst, Justice Don Willett, and Governor Rick Perry.
Christopher Hooks
Ken Paxton, after being sworn in, stands among Texas GOP VIPs: From left to right, Gov.-elect Greg Abbott, Sen. Ted Cruz, Lt. Gov. David Dewhurst, Justice Don Willett, and Gov. Rick Perry.

On Wednesday night, news broke that a Collin County grand jury is exploring anew Attorney General Ken Paxton’s potential legal improprieties—another milestone in his declining fortunes. For the last few months, Paxton had seemed to have gotten away with it.

First, he had managed the spectacular task of getting elected to the top law enforcement job just months after admitting to violating securities law by shunting his legal clients into shady financial deals, then getting a kickback, without telling them about it. That was the easy part. (He’s a Republican; it’s Texas.)

But if someone were to simply indict him for the crime that he had apparently admitted to committing, he would likely be charged with a felony. No sweat, right? Paxton is not even a ham sandwich—he’s the lowest of low-hanging fruit. A prosecutor would just have to reach out and pluck him. But in late January, Paxton got an even bigger break. The Travis County District Attorney’s Public Integrity Unit—the ethics watchdog that Republicans are convinced is out to get them at all costs—politely declined the case.

The PIU prosecutor said that only the district attorneys in Collin and Dallas counties, where Paxton was active at the time he allegedly violated the law, had the jurisdiction to charge him. Both Republicans, the DAs seem exceptionally unlikely to go after Paxton. Dallas DA Susan Hawk’s office has been barely functional amid a series of weird personal dramas, and Collin DA Greg Willis is a long-time best friend of Paxton’s—they’re former business partners, and supported each other’s election bids. If you go to Willis’ website, Paxton is still listed as heading up the host committee to one of Willis’ last big fundraisers.

So like the ill-fated villain of a noir, Paxton had arrived at the moment of false confidence that bad guys always reach right before the hammer comes down. After an election season in which his spokespeople were literally manhandling reporters to keep them from asking questions—any questions at all—of the big man, Paxton had something of a coming-out party. He was feted by GOP royalty, without reservations, at his inauguration. In February, he appeared with Gov. Greg Abbott, Lt. Gov. Dan Patrick, and U.S. Senator Ted Cruz at a high-profile Obama bashfest. He even wrote a column for Bill Buckley’s old rag.

If everyone on the GOP team just kept quiet, Paxton would be fine, and in four to eight years he’d move on to higher office. And it seemed initially like that’s how it would play out. When Craig McDonald, the head of the left-leaning accountability group Texans for Public Justice, tried to follow up with Willis’ office on the information on Paxton sent by the PIU, he says he “got the clear sense from Willis’ spokesman that our stuff was going straight into the paper shredder.” (Willis’ office didn’t respond to a request for comment.)

Which is why three events in the last week have come as such a surprise. The first came last Thursday, when the editorial board of the Dallas Morning News called for Willis to seek the appointment of a special prosecutor to look into Paxton’s history. “The state’s top law enforcer, Attorney General Ken Paxton, also happens to be an admitted law breaker,” the editorial began. It continued:

These are not nitpicky issues. State securities law imposes registration requirements to protect the public from victimization by investment frauds and scams.

The fact that Paxton violated the law repeatedly over several years suggests a troubling pattern unbecoming of the esteemed office he now holds. That’s why an independent prosecutor needs to assume control of this case.

Then, on Friday, state Sen. Kel Seliger (R-Amarillo) told the Houston Chronicle that he thought the case warranted more attention:

“How is going back to your home county and having a friend and business associate handling your prosecution better?” Sen. Kel Seliger, R-Amarillo, said. “I think it’s a clear case for a special prosecutor.”

Republicans are generally very good at tribal loyalty, but many serious GOPers can’t be happy with the fact that one of their most important statewide elected officials is so ethically challenged. (Though amid the ensuing firestorm, Seliger told one Lubbock radio station he’d been talking in hypotheticals.)

Seliger was also talking about Senate Bill 10, an attempt by state Sen. Joan Huffman (R-Houston) to gut the PIU by routing ethics investigations through the Texas Rangers—run by an appointee of the governor—and ultimately to the hometown prosecutors of elected officials. It would be a grotesque way to do business, because many legislators have friendly relationships with their county DAs, just like Paxton does. SB 10 would take the most bizarre and screwed-up part of the Paxton saga so far and replicate it all over the state.

Seliger and state Sen. Kevin Eltife (R-Tyler) held up the bill over a proposal that the AG’s office play a role in ethics investigations—letting Paxton guard the henhouse. But once that was stripped, the two dropped their objections. On Wednesday, SB 10 passed the Senate along party lines, 21 to 10.

During the debate, state Sen. Kirk Watson (D-Austin) outlined a hypothetical scenario that mirrored the case of Paxton and Willis. Would Huffman, who used to work in the office of the Harris County DA, think it appropriate for the Willis-like figure to step aside and urge the appointment of a special prosecutor? Huffman answered that if she were the DA, “I would recuse myself.” But her bill would force more and more local DAs into that position, where not all might have Huffman’s sense of ethical responsibility.

But just a few hours after the Senate debate concluded, the Houston Chronicle broke word that Willis might not have to ask for a special prosecutor after all. A Collin County grand jury had gone rogue, in part, perhaps, because of the public attention conjured by the Dallas Morning News and others. The grand jury appeared to be circumventing Willis. They requested the information forwarded to his office by the PIU—the information Willis seemed intent to ignore.

“Collin County appears to be the venue where this evidence needs to be heard,” says the letter from the grand jury vice foreman. “Therefore, we are requesting the documents be sent to us as soon as possible.”

Once the grand jury hears the evidence in Paxton’s case, an indictment seems more likely than not.

“This case is absurd because Paxton has already admitted to a crime with Texas regulators,” says McDonald. His admission of guilt, passed off by his consultants during the election as the end of the matter, “in no way adjudicates his potential felony criminal behavior.” As a reminder of the surreal nature of the fact that he may not be prosecuted for a crime which he has apparently admitted to committing, McDonald says, he keeps Paxton’s “signed confession” on his desk.

Editor’s note: This story has been edited to remove a questionable historical reference in the original version. 

Joe-Straus-house-floor
House Speaker Joe Straus

There would be blood, promised state Rep. Jonathan Stickland (R-Bedford). Lawmakers were fed up. They weren’t gonna take it anymore. But in the end, as if the Texas House was a kindly-treated Carrie, there was none. Just five of 150 reps voted against the $209.8 billion budget—a relatively pitiful showing.

From noon on Tuesday to just short of 6 a.m. on Wednesday, the House worked through hundreds of amendments to its budget, House Bill 1. Although delirium—and perhaps, some more potent intoxicants—brought out the worst in a number of legislators, House leadership was able to avoid most of the pressing fights that might have come before it. Democrats and Republicans voluntarily withdrew many of their most divisive bills over abortion and immigration. Even Stickland played along.

The night’s headlining bout, state Rep. Abel Herrero’s (D-Robstown) attempt to preemptively ban vouchers for the second year in a row, likewise was canceled, though word had it that his amendment came down primarily to save Republicans a tough vote—vouchers being, perhaps, dead in the House anyway.

What to make of it? In previous years—especially in tough budget years, like 2011—the House budgeting process was a carnival. People scrapped over money, and both Democrats and far right Republicans fought the middle, even if just for show. This year, though, the fire is gone from the belly of the tea party to some degree, and there’s a sense among most of the House that the enemy is the Senate.

That didn’t stop a few unusual amendments from getting passed, and a few legislators from saying things they shouldn’t have. At the top of the list in both categories might be state Rep. Stuart Spitzer (R-Kaufman), who authored an amendment to take $1.5 million per year from the state’s HIV/STD prevention program and use it to juice abstinence education.

In the course of the debate, Spitzer—who said the state’s goal should be to ensure no one has sex before marriage—told the crowd he’d only ever had sex with one woman, his wife, when he got married at age 29. He recommended it. For this, he was subject to a mildly ungentlemanly remark from state Rep. Harold Dutton (D-Houston). But Spitzer’s story shows how state government is getting more tolerant—not too long ago, admitting to your colleagues you’d only had sex with one woman would be a serious political liability at the Lege.

Less funny is that Spitzer’s amendment passed easily, though it’s an open question whether his amendment is going to stay in the budget. He did not give any sign of being especially well-liked by those in control last night. When he offered a measure to move money from arts programs to courthouse preservation efforts, another Republican successfully amended his amendment so that the money would instead come from a community college in his own district, forcing him to voluntarily withdraw his bid.

Things got sloppier through the night. When state Rep. Scott Sanford (R-McKinney) offered a bill to put a dent in the Texas Lottery Commission, citing the need to protect the poor, state Rep. Borris Miles (D-Houston), passionate but slurring his words a bit, told Sanford at 2:42 a.m. he was “full of shit.” Hours later, reps called points of order on six consecutive bills, as if just for the fun of it (one killed an ill-conceived attempt to prohibit TxDOT from funding rail projects.)

An attempt by Rep. Tony Dale (R-Cedar Park) to hack more than $50 million out of the Health & Human Services budget to pay for sweet new airplanes for DPS border operations was defeated, though by one of the closer votes of the night. At 3:53 a.m., an angry Rep. Debbie Riddle (R-Tomball) slammed state Rep. Matt Krause (R-Fort Worth) over his bid to kill the Racing Commission with a sentence that started with “If you had any respect for horses…”

Democrats spent much of the evening trying to add data reporting to the budget. Most of them were defeated. One amendment by state Rep. Mary Gonzalez (D-Clint) aimed to expose gender pay discrepancies in state agencies. It was torched, too. Earlier in the night, state Rep. Trey Martinez Fischer (D- San Antonio) offered a series of symbolic amendments, trumpeted by the Texas Democratic Party, to increase school funding and attempt to force the attorney general to settle the state’s school funding lawsuit. These, too, were easily defeated.

A final note—there’s a word for the idea behind debating a budget for 16 hours straight, until the birds on the Capitol lawn are greeting the morning. It’s “stupid.” The 140-day calendar the Lege works with—and stuff is only really happening for 90 days of that or so—imposes a lot of constraints. Even well-informed people can’t really know what’s going on half the time in the Capitol’s dark recesses, thanks to the quickening pace as we head toward June.

But the House easily could have broken this budget debate into a couple of days, so that reps were more sober and less tired and could focus on what’s on the page in front of them. But, you know, maybe that’s the idea. It’s like having toddlers—get them tuckered out.

Ted Cruz, Manchurian Candidate

How the junior senator from Texas helped precipitate a milestone in the growth of the Chinese state.
Texas Sen. Ted Cruz speaks to a rapturous crowd on the second day of an Americans For Prosperity summit in Dallas.
Christopher Hooks
Ted Cruz receives rapturous applause at a conference put on by Americans For Prosperity in Dallas, August 2014.

Yes, Ted Cruz hails from a foreign land, as late-night comedians and the nation’s hackiest political commentators have been happy to inform you. But the headline is about something else. Something that you wouldn’t normally read about in the Observer: The games great powers play in Asia. In March, we’ve seen some important milestones in the gradual expansion of Chinese state power—events that our state’s junior senator had a small but significant role in bringing about.

If that sounds like a stretch, let’s go back a bit. Over the last few weeks, we’ve witnessed the growth of the Asian Infrastructure Investment Bank, an international financial institution first proposed by the Chinese government in late 2013 that really got going in the second half of last year. The AIIB is intended to be China’s answer to other financial institutions such as the World Bank, the International Monetary Fund and the Asian Development Bank, banks in which the United States, Europe and Japan have outsized influence.

The AIIB’s stated goal is to raise and distribute capital for the development of major infrastructure projects in Asia, for countries that can’t afford them on their own. Whatever you think of financial institutions like the IMF and ADB—they have plenty of detractors—the creation of a rival institution through which China can build influence in Asia is clearly suboptimal from the perspective of American power.

The primary reason China wanted the AIIB in the first place is that it has been getting cut out of the decision-making process at the international banks—it was growing wary of the ADB, in which its rival Japan is the biggest stakeholder. And despite putting more and more money into the World Bank and IMF, it didn’t have voting power in the organizations commensurate with its new financial power. This seriously irked China, and there’s good reason to believe that talk of the AIIB might have begun as nothing more than a threat intended to force change.

The thing is, almost everybody was willing to give China more votes. There was a plan worked out years ago to increase the voting power that emerging economies get in the banks—one which barely altered America’s power in the organizations. The IMF leadership endorsed it heartily. It was backed by all of its members, including the U.S. The Obama administration happily backed the deal, but it fell to Congress to confirm the new plan.

Congress being Congress, it went for years without doing so. But then, last spring, it finally looked as if it might act. Senate leadership attached the badly overdue IMF reforms to an aid package to the faltering Ukrainian government, which would be getting assistance through the bank. Cruz played a critical role in killing it. Here’s what the Observer wrote in April about how things went down:

Cruz released an open letter to Senate Majority Leader Harry Reid announcing his intention “to object to any floor consideration of Ukraine aid legislation that contains these IMF provisions.” It’s been reported that Cruz asked all Senate Republicans to co-sign the letter. In the end, only five did (stalwart Cruz ally Mike Lee and the idiosyncratic Rand Paul among them.) The letter is full of blank lines for signatures that were not provided. Nevertheless, the bill started to have problems.

House Republicans began announcing their intent to oppose the Senate language. A growing number of GOP Senators began to express disquiet. That left longtime Cruz nemesis John McCain sputtering with fury. Those who were hoping to slow or strip the bill were “on a fool’s errand,” just like the government shutdown. They had left him “embarrassed” by his party.

But the opposition to the bill grew. The aid bill slipped into the next week—then the next. What had begun as an uncontroversial provision had become a poison pill. Marco Rubio joined the crusade, though he didn’t go as far as Cruz. (He’d previously characterized the reforms as “Russian-backed.”) It became apparent that many were willing to kill the Ukraine aid bill rather than accept the IMF reforms. Early last week, Reid conceded defeat—he’d strip the bill.

It was the closest Congress had come to ratifying the IMF reform package, and its failure left congressional Republicans more unified in opposition to the reform measures. The fiasco seemed, to many observers, evidence that Congress would never let China and other emerging economies have more voting power.

And so the Chinese search for an alternative accelerated. A few months later, it unveiled grand plans for its new bank, and observers told the Financial Times the proposal was directly tied to the death of IMF reform:

“China feels it can’t get anything done in the World Bank or the IMF so it wants to set up its own World Bank that it can control itself,” said one person directly involved in discussions to establish the AIIB.

Now, Cruz’s quixotic killing of IMF reform wasn’t the only time Uncle Sam shot itself in the foot over the AIIB: As Dan Drezner writes in the Washington Post, the Obama administration’s hopeless bungling of the issue now means U.S. allies are becoming founding members of the bank against American wishes, while the U.S. is out in the cold—where the smart thing to do might just have been to join the bank, too.

But Congress—and Cruz specifically—bears a significant amount of blame. Plenty of Republicans were happy to vote for IMF reform until it was made a litmus-test issue. Some Republicans now acknowledge stalling on the IMF package was a mistake: Alabama Senator Jeff Sessions, no hippie squish, told a policy forum in Brussels recently that the policy fumble was “an unfortunate event and it might be bigger than we understand today.”

Would the Chinese have launched the bank anyway if IMF reforms had been passed? Maybe so—but that’s a question historians might debate someday as they chart the rise of Chinese influence in Asia.

It’s a crummy way to manage a superpower whose influence is in relative, though not absolute, decline. It’s one of the few things Cruz has done in Congress that has had real consequences. Now, of course, he’s asking for control of American foreign policy.

In all things, Cruz and his friends don’t want the branches of American power to bend. They use words like “muscular” to define their approach to the world: They see compromise as a sin. Branches that don’t bend break, of course. But there’s a danger, too, that our friends will just go find another tree.

How Senate Republicans Saved the Franchise Tax

Freshman hazing is a tradition in the Legislature, but Troy Fraser took it a little further on Wednesday.
Don-Huffines
State Sen. Don Huffines (R-Dallas)

In the end, the result of the debate over the package of tax cut bills considered by the Senate on Wednesday was pre-ordained—they’d pass. The three bills, beloved by Lt. Gov. Dan Patrick, would cut property taxes and franchise taxes to the tune of $4.6 billion. Even if they face an uncertain future in the House, they’d sail through this Senate, right?

But in the latest installment of this Senate’s continuing difficulties—Senate Republicans’ magical ability to make life harder for themselves than it needs to bethe tax debate on Wednesday produced one of the most revealing dust-ups of the session so far between the tea party caucus and its foes.

Right-wing Senate freshmen, led by state Sen. Don Huffines (R-Dallas), threatened to derail the whole thing by demanding that the Senate pass steeper tax cuts. And in response, state Sen. Troy Fraser (R-Horseshoe Bay) gave Huffines what amounted to a public dressing-down that threatens comity in the already uneasy Senate GOP caucus.

Huffines offered an amendment to Senate Bill 7, a franchise tax cut bill shepherded by Nelson and state Sen. Paul Bettencourt (R-Houston), that would phase out the franchise tax entirely over several years. Doing so would blow a giant hole in the state budget. Senate Republicans often talk about killing the franchise tax, and Huffines called their bluff.

Huffines’ amendment put Senate Republicans in the dangerous position of having to vote for the franchise tax—in other words, to keep it alive—or take a politically popular vote that would ruin the state’s finances in a couple of years. In effect, it poked senior Senate Republicans and Lt. Gov. Dan Patrick in the eye. His colleagues pleaded with him to drop it, but he steadfastly refused.

It took quite a while for SB 7 to come to the floor, the first hint of trouble. Senators spent hours on small, uncontroversial bills—like killing a tax on “combative sports events”—or doing nothing at all. Patrick, for his part, stayed away from the freshmen for most of the day. It should have been a proud day for him, but he seemed agitated and unhappy.

SB 7 came to the floor more than three hours after the Senate first came to order. Huffines’ amendment was first in line. But before he could introduce his amendment, Patrick directed the chamber’s attention to Fraser, who had a modest change to Huffines’ proposal. Fraser’s amendment would strike the lines about abolishing the franchise tax, and instead direct the comptroller’s office to study the issue. Fraser, in effect, put his boot down Huffines’ throat, with Patrick’s permission.

Fraser said he hated the franchise tax too, and this study would help them do away with it. State Sen. Royce West (D-Dallas) rose to have a little fun. “This guts the Huffines amendment, right?” he asked Fraser. Huffines, ready to speak, lowered his mic and looked away in frustration. “No, this helps Huffines’ amendment,” Fraser said. “So you would say this perfects his amendment?” asked West.

Eventually Huffines was recognized to speak, and he started to talk about his proposal. But Fraser immediately jumped on him, with the tone of a father straightening out a young child. Right now, he said, they could only talk about Fraser’s amendment, not Huffines’ amendment. And didn’t Huffines know about Fraser’s hearing problems? Fraser would be much obliged, he said, if Huffines would turn to face him when he spoke.

Huffines turned and spoke slowly. “Senator,” he said. “I move that we table your amendment.”

The motion to table Fraser’s amendment failed 7 to 24, and his amendment passed 20 to 11. In the end, only three Republicans, all freshmen, stood with Huffines and against the Senate leadership: Konni Burton, Bob Hall and Van Taylor. Seven Democrats, hoping to cause trouble, joined them.

With Huffines defeated, the bill passed easily. So why is this important? It says something significant about how this Senate works—or doesn’t.

The freshmen, who are pretty far to the right, have not been getting along with the Senate’s senior figures for quite some time. Behind the scenes, the two groups have been sharply, bitingly critical of each other. They’ve clashed publicly over issues like Abbott’s nominations to the University of Texas System Board of Regents, but this is the first time the division has played out so prominently on the floor. And the humiliation of a freshman senator by a senior one will be remembered.

The dust-up makes it even less likely that the freshmen will play along with their senior counterparts. The only reason Fraser was able to head off Huffines so quickly was because Huffines played by the rules and let his colleagues know his intentions—in the future, he and his friends may be more reluctant to do so.

The disappearance of the two-thirds rule as a factor in Senate negotiations makes these kinds of intra-party rifts more dangerous. Last session, the Republicans could put some blame on Democrats for watering down or killing legislation. Now the Dems are no longer a factor. But to get legislation out of the Senate on a party-line vote, Patrick needs the Republicans who sided with Huffines.

If Patrick were still a senator himself, the freshman would be his ideological allies. But now that he’s lieutenant governor, he needs them to fall in line. Here’s his limp spin on his efforts to preserve the franchise tax:

Is this a terminal condition? Hardly. But it’s something to watch. Deteriorating relations within their caucus could push Senate Republicans in strange directions.

It’s also notable that the House leadership announced a plan to make fixes to the state’s dismal school finance system Wednesday morning, just an hour before the Senate went into session. Is the plan any good? That’s a subject for debate. But as the House and Senate begin to butt heads more seriously over the budget in the last two months of the session, the House is assiduously playing the role of the grown-up in the room. And the Senate is only too happy to help them with that.

Ted Cruz at a wildly popular event in the convention's exhibition hall.
Timothy Faust
Ted Cruz experiences a moment of self-satisfaction at the 2014 Texas Republican convention.

Now he belongs to the ages. Today Ted Cruz, one of the foremost representatives of the state’s persecuted Texan-Canadian community and the junior Senator from the North Texas tea parties, ascended from this state’s low mortal plane and affixed himself to the celestial realm of presidential politics, where he’s always thought he truly belonged. The announcement wasn’t a surprise, but when it happened (earlier than his competitors) and where it happened (at the evangelical Liberty University) was.

What to make of it? Is this the beginning of a long, slow grassroots groundswell of the kind that Cruz harnessed to trample David Dewhurst in 2012? Could 2015 be the year of national #Cruzmentum?

No and no.

Some conservatives—and the Democratic Party fundraising apparatus—would have you believe otherwise, but a bet against Cruz winning the Republican nomination for president would be among the safest possible uses of your money. Cruz isn’t in the same category as the Ben Carsons and Carly Fiorinas of the world—people who are running only to up their future speaking fees and maybe land a Fox News gig—but he has a roughly similar chance of winning the GOP nomination, much less the presidency.

There are political reasons and policy reasons this is the case, as well as personal ones—are Americans really going to cheer for an Ivy League snob with an affinity for paisley bathrobes and Jesse Helms who hung a giant oil painting of himself arguing in front of the Supreme Court in his office?

But there’s a simpler reason to doubt Cruz: In almost every presidential election since FDR’s last re-election, Republicans have nominated the more moderate, business-minded candidate over an ideologue, with 1964 being the only real exception. (There’s 1980, too, but that’s something of a special case.) The conservatives who love Cruz are right: The donor class—the people who care a lot about estate taxes and not all that much about the gays—run the national party, more or less. Cruz is a Barry Goldwater in an era that’s not looking for one.

In his address this morning at Liberty, he posited the existence of what we might start calling the “Silent Plurality”—evangelical and other voters who would come out to support the party if it had real leadership. He has, certainly, an almost fanatic appeal to a part of the Republican base, and especially so in Texas.

But winning a Republican primary in this state provides a very particular kind of political experience, one that is not easily translatable elsewhere. For years, he’s been deploying the same one-liners at rallies—his speeches to friendly crowds, who’ve surely heard his zingers many times before, sometimes have the feel of a stand-up comedian’s routine.

But when he puts himself in front of crowds that won’t give him the easy laughs, he often looks lost. He’s more comfortable provoking people than finding commonalities with them. And despite his lauded oratorical skills, he’s never really proved adept at using the politician’s most basic tool: Tailoring his speech to different audiences as the need arises. His base loves him for that, of course.

Cruz’s most significant contribution to the race—apart from the inherent entertainment value—might be his ability to scramble the GOP primary here in Texas, thanks in part to a set of weird new rules adopted for the contest.

Next year, Texas’ primary will be on March 1, much earlier on the calendar than previous years. After the early states, like Iowa and New Hampshire, it will have been the biggest state to vote, and it’ll be rich with delegates. Because the GOP field could easily still be crowded at that early date, the state might play an important role in determining the winner.

Why does that matter for Cruz? The event next year is going to be a bit more complicated than it used to be. The state’s many delegates will be allocated three ways: There will be a pool of delegates that represent the statewide vote, a pool of delegates that represent the vote of each congressional district, and a pool of delegates whose allegiance will be determined at a later date.

If one candidate takes a majority of the vote in Texas next year, or a majority of the vote in one of the state’s congressional districts, they’ll take all of those delegates. But if no one takes a clear majority statewide or in certain congressional districts, the candidates who win more than 20 percent of the vote split those delegates proportionally. Then, a quarter of the pot will be awarded to one candidate at the state Republican convention later in the summer.

This is Cruz country, and if he’s still in the race by the Texas primary—you can bet he’ll stay in till at least then—he’s likely to take a big share of the vote, if not win it outright. If he does, it’ll have the effect of hurting other candidates who might do well here—candidates with Texas connections such as Rick Perry, Jeb Bush and Rand Paul.

With Cruz in the race, some might struggle to pass the 20 percent barrier. And if Cruz can lay a credible claim to having “won” the messy Texas primary, you can bet his supporters will be pushing hard to award those floating delegates to Cruz at a convention if there’s still a contest to be had.

Still, don’t worry too much about President Cruz. But don’t get too eager if you think a failed presidential campaign will knock him out of the spotlight. He’s up for reelection in 2018. Democrats used to fantasize about running a credible challenger against him—particularly, they talked about convincing one of the Castro brothers—but after the Democrats’ 2014 electoral disaster, that possibility seems remote. So despite the hundreds of thousands of words that will be written today, in most of earth’s languages, about Mr. Cruz’s chances, expect everything to stay the same, more or less.

Ken Paxton, after being sworn in, stands among Texas GOP VIP's: From left to right, Governor-elect Greg Abbott, Senator Ted Cruz, Lt. Gov. David Dewhurst, Justice Don Willett, and Governor Rick Perry.
Christopher Hooks
Ken Paxton is applauded by GOP bigwigs at his inauguration in January.

A bill that would give Attorney General Ken Paxton’s office sweeping power to allow or disallow local initiatives and referenda had its first hearing in the House Committee on State Affairs today. The bill is among several in the Legislature squashing local control—and while it got a cautious reception from the committee, it’s supported by some of the state’s most influential business interests.

In recent years, referenda and ballot initiatives have grown in importance as ways for Texans to enact change and hold local governments accountable. The most notable recent example is a ban on hydraulic fracturing in Denton, which passed a fairly conservative electorate by a wide margin. The Denton ban was the subject of much of today’s debate.

House Bill 540, sponsored by Phil King (R-Weatherford), would require any referendum or ballot initiative in one of Texas’ home-rule charter cities to be reviewed by the attorney general’s office. The attorney general would rule on whether the proposed ballot initiative or referendum would violate “the Texas or federal constitution, a state statute, or a rule adopted as authorized by state statute,” or if it would constitute a “government taking of private property.”

That may sound clear-cut, but it’s not. The normal method for deciding whether a law is constitutional involves months or years of careful scrutiny by the courts. Instead, King would give that power to bureaucrats in the AG’s office. If an initiative is detrimental to a powerful and GOP-allied interest group, would the AG’s office really let it slide?

In laying out the bill, King told the committee that Texas was a republic, run by the Legislature, and not a democracy, run by the people. “Democracy is two wolves and a lamb voting on what to have for lunch,” he said, misattributing the quote—which might have originated with a 1990 Los Angeles Times op-ed—to Benjamin Franklin. In places like Denton, powerful and monied outside environmental groups had agitated for change, he said, and the rule of law had to be imposed—by Ken Paxton.

He ran through the list of possible ballot initiatives that could come to Texas cities: bans on genetically modified foods, marijuana legalization, property restrictions—and, most frightening of all—increases to the minimum wage and new labor laws.

But it was fracking bans that motivated him to bring the bill. There are “almost 14,000 gas wells” in municipal areas, King said, and if what happened in Denton set off a wave of similar ordinances (it hasn’t, yet) all those wells, and the money they generate for their owners, would be under threat.

The fight over “local control” issues at the Legislature—it was once a concept that Republicans loved, but they seem to be turning against it, from Gov. Abbott on down—is in part due to the fragmented nature of Texas state government these days. State government is dominated by the right, but the state’s cities and urban counties are significantly to the left of state government.

Business interests would prefer a regulatory climate designed and maintained by the Legislature, since it’s a lot friendlier to them. City ordinances are a threat to that regulatory framework. Cities have taken action in a number of areas where they feel the state has failed to act—like ongoing attempts to regulate payday lenders—but their legal right to do so is such cases in constantly under scrutiny.

Today’s hearing heard testimony in favor of the bill from the Texas Oil & Gas Association (TxOGA), represented by former Agriculture Commissioner Todd Staples, as well as representatives from the powerful Texas Association of Business, the Texas Association of Builders and the Texas Restaurant Association. TxOGA fears restrictions on drilling. The restaurant and construction guys fear minimum wage hikes, among other items, and the Texas Association of Business fears all of the above, plus other local regulations such as the plastic bag bans that have passed in big Texas cities.

“You can’t have economic development if state law doesn’t mean anything,” said a Texas Association of Business representative.

A representative from the Texas Municipal League, which represents local governments, spoke against the bill but he was cautious in his condemnation—referenda and initiatives, he pointed out, are usually trying to override the will of the city council.

Among those who spoke against the bill was Mark Miller, the 2014 Libertarian candidate for a spot on the Railroad Commission. He said he thought the Denton ban was “unwise,” but that the referenda and initiative process should remain sacrosanct. “The good people of Denton were let down by government. So they organized for change,” he said. “What could be more American or more Texan?”

“Interference by the state government over local matters is no more wise or more welcome than interference by the state government in local matters,” Miller continued. “A well-functioning judicial system should never be replaced by the heavy hand of the executive branch.”

Curiously, on the same day this bill came before the committee, an op-ed that carried Ken Paxton’s name appeared in National Review. He blasted Obama’s use of his executive power, his expanding interpretation of his own powers and his arrogant overruling of the desires of other branches of government.

In the United States, no individual may or should have that much unchecked power. It flies in the face of the rule of law, which in any government is all that stands between freedom and tyranny.

Will the Legislature grant Paxton power to approve or disapprove prospective city ordinances? The committee seemed a bit skeptical: Chair Byron Cook asked King whether it was possible to “get a fair ruling” by putting the review process in the office of a statewide elected official. King replied that there was no other real option.

But the business groups that endorsed the measure frequently get what they want at the Lege. A representative of Paxton’s office happily told the committee no additional staff was required to fulfill the bill’s responsibilities. Even if King’s bill doesn’t succeed this session, the winds are changing when it comes to the balance between state and local power.

Dan Patrick’s Inexplicable & Contradictory Budget Proposals

Dan Patrick from last week, meet Dan Patrick from this week.
Sen. Jane Nelson and Lt. Governor Dan Patrick
Kelsey Jukam
State Sen. Jane Nelson (R-Flower Mound) and Lt. Gov. Dan Patrick talk about the Senate budget at a press conference in January

Last week Lt. Gov. Dan Patrick did something pretty surprising: He held a press conference with a Democrat and the most moderate Republican left in the Senate, Kevin Eltife of Tyler, to put his stamp of approval on a proposal that would allow the Legislature to use revenue beyond the “spending cap” for tax cuts and debt repayment. The spending cap, a constitutionally enshrined limit on the amount the state budget can grow from biennium to biennium, has been a sacred cow for conservatives for many years. Here was Patrick, elected as a budget hawk, threatening to can the cap while pretending to do the opposite.

This session, budget-writers think there’s about $6 billion in revenue above the spending cap, but unless they take a majority vote to lift the cap, they can’t use it. Patrick wanted to bust the cap so he could get his hands on that $6 billion to pay for his beloved tax cuts, and this was a way of squaring the circle. Senate conservatives were mostly silent on the move, but it was loudly panned by commentators like Texas Monthly’s Erica Grieder, who pointed out that Patrick made a name for himself in the Senate in part as a loud opponent of an imaginary legislative spending spree in 2013, but now was looking for a way to bust the spending cap for the sake of political convenience.

But that was last week: Each week of the 84th Legislature brings to us a New Dan, and a New Day for Texas. Today, Patrick took to the same podium with some of the Senate’s most conservative members with a proposal to greatly tighten the spending cap, restricting even further the amount of revenue future legislators will have access to.

What the hell?

In short, the new proposal, consisting of two bills authored by state Sen. Kelly Hancock (R-North Richland Hills), is a version of an idea long championed by the conservative Texas Public Policy Foundation and briefly, if only dutifully, mentioned in Gov. Greg Abbott’s State of the State address. Hancock’s Senate Joint Resolution 2 and Senate Bill 9 would ask voters later this year to redefine the spending cap and tie it to state population growth, plus inflation, instead of growth in Texans’ personal income, which rises faster. It would broaden the spending cap to apply to all of the state’s spending, instead of just certain kinds.

That would bind the hands of future legislatures even tighter, while ensuring that more and more revenue would be untouchable beyond the cap. Legislators could still vote to bust the cap—though few seem to have the political courage to do that now—but Hancock would make that harder, too. Right now, the cap can be lifted by a simple majority of both houses. Hancock would make it a three-fifths vote.

If passed, Patrick’s two budget proposals don’t technically contradict—actually, they’d be weirdly toxic (or synergistic, depending on your perspective) in combination, since more and more money would end up on the wrong side of the spending cap, and that money could only be used for tax cuts and debt—but it’s still a weirdly incomprehensible mess from a policy perspective, and put together seemingly on the fly. It’s the art of government as outlined on the back of a Gadsden Flag cocktail napkin.

What’s worse—it’s straight out of Sacramento. You know how the recent recession calcified a Texas meme about the Golden State being the worst place on earth? California is doing pretty well lately, though you won’t hear about it in Austin. But one of the ways California got itself into a mess over the last few decades was by tying the hands of future legislatures and restricting the state’s ability to raise revenue, all the while kicking tough (and easy) decisions to voters. All three are becoming more and prominent parts of the Texas model—paradoxically, done in the name of targeting “California-style” spending.

The Texas Public Policy Foundation-style budget plan has been around a long time, as was discussed at the press conference this morning. “As I found out today as we were moving to get coauthors and joint sponsors for this legislation, about half the Republicans on the Senate floor have filed a similar bill at some point in time since they’ve been in office,” Hancock said. But it’s long been the kind of thing that legislators and statewide officials pay lip service to but never do much about. Is that changing? Has Patrick’s support for the measure been heightened by the flak he caught for his proposal last week? If so, that’s not a great way to run the Senate.

It’s one of the more mystifying turnarounds in what’s proven to be a fairly sloppy first few months for Patrick. He entered the Session full of energy—he promised to pick his committee chairs early and get to work on legislation quickly, so as to put the House at a disadvantage. He’s put on near-daily press conferences to highlight myriad proposals, some of which have no chance of becoming enacted.

But as other commentators have pointed out, his predicted rush of productivity has not materialized—perhaps in part because of Patrick’s poor treatment of the Democratic minority early on. The 60th day of the Legislature is on Friday, after which things will begin to flow normally (there’s limits to what can be done until then). But Patrick doesn’t have all that much to show yet. And senators—even in the conservative wing of the GOP caucus—can’t be too happy with the slightly bizarre way things have unfurled so far.

How is the House doing, then?

Well, today, members of the House put on their own presser. State Rep. Dan Flynn (R-Canton), a conservative Republican, state Rep. John Otto (R-Dayton), a moderate Republican, and state Rep. Sylvester Turner (D-Houston), a Democrat, held a press conference to announce a plan to make whole the Texas Employees Retirement System, the pension fund for state workers that’s been a mess for years.

Their plan is to raise the state contribution to the fund, and have employees pony up more too—but the state would compensate the employees with a matching pay raise. The pension fund has been underfunded for 19 of the last 20 years, Flynn said. Turner applauded the bill: It was an “important and significant step forward for this state of Texas.” Just two weeks ago, Otto had released a plan to fix the health care plan for retired state teachers, TRS-Care, in a similar way.

So as we slide towards the busier part of the legislative session, the House is emphasizing its work on the bread-and-butter problems of state government, while the Senate has been consumed with weird fumbles, from the leadership on down. (Patrick’s Border Security Subcommittee’s wholly avoidable trip-up among them.) After Friday, the leadership of the two chambers will have only 80 days to learn to work with each other, put together a budget, and advance their agendas—that’s a lot less time than it sounds.

Kory Watkins open carry
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Kory Watkins

When the NRA shifted its focus from supporting hobbyists to political action in the late 1970s, the gun-rights cause fit neatly within a new Republican ethos. The gun came to symbolize something greater than itself; it became the nucleus of a complete worldview. NRA members styled themselves as self-sufficient, tough on crime, pro-police, hawkish on foreign policy, and the keepers of family traditions. By closely associating themselves with the Republican Party, they’ve found great success.

The same cannot be said for the marauding gun activists that have besieged the Texas Capitol in recent weeks. Seeking the right to carry guns openly in public, without a license, they’ve taken a Legislature that’s pretty sympathetic to their cause and pushed it to the breaking point. Before the session started, it seemed certain that open-carry legislation would pass in some form, but as time goes on, the chances seem increasingly slight.

One reason for that is the tactics employed by the gun-rights crew. C.J. Grisham, who leads Open Carry Texas, has sought to win support the right way: building public pressure, then establishing relationships with legislators. But Kory Watkins, the head of the splinter group Open Carry Tarrant County, has soiled Grisham’s nest. State Rep. Poncho Nevárez (D-Eagle Pass) had to accept a Department of Public Safety security detail after Watkins and friends refused to leave his office following a verbal confrontation on the first day of the session. Lately, Watkins has been keen to warn lawmakers that they’re disregarding the Constitution, and to remind them that the “punishment for treason is death.” But the reason open carry isn’t gaining as much traction as it should goes beyond Watkins’ well-publicized screw-ups. The open-carry guys speak a slightly different language than the last generation of gun nuts, and it’s a language that sounds pretty foreign in the halls of the Capitol. Watkins and many of the open-carry activists are fed not by talk radio but by the conspiracy-libertarian wing typified by Alex Jones, who’s spoken at open-carry rallies in the past. Most of them are young, white and male, and you’d be more likely to see them on Reddit than at a hunting lease.

Some have criminal backgrounds, but many of them just seem like frustrated young men who see the ownership and display of firearms as a kind of empowerment they’re not getting elsewhere. Watkins, who’s almost never seen without a men’s rights-style fedora, is anti-war and anti-police; he got arrested in Fort Worth last year for hassling cops. None of that plays well at the Capitol. Politics is tribal, and many of the open-carry guys are members of the wrong tribe. So it seems increasingly unlikely they’ll get what they most want: unlicensed open carry. Even some of the most conservative new legislators are admitting it’s DOA, as is Joan Huffman, who leads the Senate committee considering the bills. Will the alienated libertarians learn to play with others in time to get a juicy consolation prize?

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