As we approach the end of a tumultuous 2017, let me offer my wish that each of you have a joyous holiday season and that 2018 brings you all the best. Happy Hanukkah, Merry Christmas and a fine Festivus!
While I sincerely hope that all of us have a wonderful 2018 in our own ways, I am concerned that as a country we will hit turbulent waters at best or worse, experience a Constitutional crisis. I gave up prognosticating some years ago. However, since it is the end of the year, I will offer up my scenario as to how the coming year will unfold as the investigation led by Special Counsel Robert Mueller plays out. There are certainly other very important events to come in 2018 that the administration will face, such as dealing with a bellicose North Korea, implementing a tax cut by expanding the deficit, undermining the Affordable Care Act, retooling immigration and someday passing a budget. All of these will be overshadowed by the unfolding drama surrounding Mr. Mueller’s investigation and its final results. It will not be pretty.
Lest we forget, as I see it there are four distinct areas of investigation for the Special Counsel. Three have been his focus from the beginning and the fourth I surmise got added as the investigation looked into the activities of Mr. Paul Manafort and others and the resulting relationship to the original three areas of interest. The four are concerns over Russian interference in the election, possible collusion between the campaign and the Russians, whether or not the FBI investigation into these matters was obstructed by the president or his advisers, and my fourth, money laundering and/or tax evasion by the president and/or family. Let’s look at them one by one.
Many of us forget that the original intent of the investigation, starting with the FBI and CIA in 2016, was to determine the extent, methods, and impact of Russian interference in that year’s election. The combined intelligence community in the United States and elsewhere concluded some time ago that the Russians did interfere. End of discussion. The questions of how, why, whether it mattered or not and what to do stop it in the future remain unanswered. Reportedly, the president refuses to discuss it with his top advisers, has yet to hold any cabinet level discussions as to how to protect future elections and continues to deny that it ever happened. This is unconscionable. Regardless of one’s political views, all of us should be upset that there is overwhelming evidence that it occurred and there is no evidence that anyone is doing anything substantive to prevent it in the future. There is still no federal coordinated action to stop it from happening again. As Americans we should be appalled. Michael V. Hayden had a lifetime of experience in the intelligence community and was CIA director under President George W. Bush. His view of the Russian meddling? That it is the political equivalent of the attack on September 11. He further said,
“What the president has to say is, ‘We know the Russians did it, they know they did it, I know they did it, and we will not rest until we learn everything there is to know about how and do everything possible to prevent it from happening again. He has never said anything close to that and will never say anything close to that.”
Perhaps some in Congress will wake up to the fact that action is needed, and soon. I won’t hold my breath for the president to initiate any action. When Mr. Mueller’s findings come forward, we may have an impetus for action by the rest of the government.
The second area of investigation, and the one most focus on including the president, is whether or not the president’s campaign colluded with the Russians to interfere in the election and impede Secretary Hillary Clinton’s chances of victory. This one is more complicated and takes more than a sound bite or Twitter statement to unfold. In short, the theory is that in exchange for “dirt” on Mrs. Clinton and other “aids” during the election, the new administration, if they won, would lift sanctions on Russia imposed for a variety of reasons generated by Russian bad actors, and not just during the election. This one is less clear as to the extent that the campaign organization knew what they were doing. Their best defense, if one can call it that, is that they were incompetent. That line of reasoning is becoming less tenable as more and more instances of meetings between campaign representatives and Russian representatives become known. In addition, both campaigns were briefed in August 2016, following the official nominations, that the Russians were trying to interfere in the election, that other bad actors might also try, and the two campaigns need to notify the FBI if they detect any Russian overtures or other activity. The Trump campaign made no such reports to the FBI. It is hard to claim ignorance under those circumstances.
The second area of investigation involves possible obstruction of justice. This stems in one way from the aforementioned meetings with Russian operatives during the campaign. Various campaign officials initially denied any such meetings. It grew bigger after the president fired then FBI Director Jim Comey and bragged in a Lester Holt interview on NBC and later in a private conversation with the Russian (!) Foreign Minister and Ambassador that it was over the “Russia thing.” Director Comey testified under oath that the president asked him to drop the investigation into former NSC Director Michael Flynn’s interactions with the Russians. (The same Michael Flynn that pleaded guilty to lying to the FBI about those very interactions.) As if that is not enough, the investigation also includes the president himself pushing prevarications on Air Force One concerning his son Donald Trump Jr. and his interactions with the Russians. They made a very weak attempt to cover it up, allegedly at the president’s direct involvement in the cover up story.
You can’t tell the players without a program.
Not on the “official” list but the area that will cause the biggest consternation, and at the same time pull everything together, is my notion that the Special Counsel and his office are looking into the Trump Organization’s and family’s financial dealings. I think that they will find instances of money laundering and tax evasion. Very much like what they come up with concerning Mr. Manafort and Mr. Gates — only with Russians rather than corrupt Ukrainians.
Many focus on Mr. Trump’s visit to Moscow for the Miss Universe Pageant and his subsequent attempts at creating new business opportunities in Russia. Lost to some is the knowledge that he started visiting Russia in 1987 and has made trips off and on since then. If his son is to be believed, lots of their investment money came from Russian sources. U.S. banks would not underwrite his endeavors after four bankruptcies and he was desperate. Think of it as a “Godfather” scenario. “Donnie, don’t worry. We’ll take care of the problem. Relax. But at some time in the future we may come and ask you for a favor.” Or as Don Corleone says it much better in the original, “Someday, and that day may never come, I will call upon you to do a service for me. But until that day, accept this justice as a gift on my daughter’s wedding day.”
My opinion as to the results?
- The Russians interfered in many, many ways in the election but the number of votes that changed because of those actions (none of which were by actual vote tampering) is unknown.
- Aides to Mr. Trump did collude with the Russians but the president will benefit from plausible deniability as there will be no way to tie it directly to him.
- The investigation will conclude that Mr. Trump and some of his aides did try to obstruct justice by interfering in the attempt to investigate his family and campaign ties to the Russians.
- The Special Counsel will conclude that prior to becoming president, Mr. Trump knowingly engaged in unethical and illegal financial transactions. These transactions helped Russian oligarchs launder money in Trump investments and real estate purchases. His hundreds of LLCs and shell corporations were used to hide these transactions and to limit the taxes he was by law responsible for paying.
That’s when the “fun” starts.
First, prior to the Special Counsel’s findings, the House committees investigating these matters will rush out findings — possibly in early January — that will find that there is no evidence of collusion, they did not look at obstruction of justice because it is a criminal matter, and did not investigate his finances. They will say that the Russians interfered in the election but it is unclear to what extent and in any case, the interference did not change the election.
The president will seize on this report, claim that it proves his innocence and that there was “no collusion!”
The president will try to fire Special Counsel Mueller because, he will reason, the House committees already proved that there was “no collusion!” and so there is no need for the investigation to continue. To do so would make it a “witch hunt” based on the Democrats efforts to push a “hoax” and an attempt to disenfranchise millions of Trump voters because of a deep hatred of Mr. Trump. Fox News and some House Republicans will cry long and loud that this is an attempted FBI “coup” to overthrow the duly elected President of the United States. (By the way, this has already happened in the last 48 hours. The attacks on the FBI and Department of Justice from certain Republican Members of Congress are despicable. Please note that they are not attacking the facts, the results so far or any other substantive issue. They only attack the people and the institution with the goal to sow doubt in advance of just this scenario.)
The Senate will try to protect the Special Counsel but at the same time expand their investigation to include the other nominees — Jill Stein and Hillary Clinton — to show that it wasn’t just Mr. Trump. When the Special Counsel’s findings start to leak out, the Senate, caught in a bind as to how to act as the president continues to undermine, ignore and invalidate the non-partisan results, delays action.
The Special Counsel will name Mr. Trump as an un-indicted co-conspirator.
Mr. Trump will not step down from the presidency and tries to pardon those indicted as well as himself. This will lead to a Constitutional crisis.
The “#metoo” movement continues to build pressure against Mr. Trump as more allegations of harassment by multiple women come out and he calls them all “liars.”
To make sure that justice prevails, state prosecutors step in to bring state charges — especially on money and tax issues. Mr. Trump cannot pardon violations of state law, only federal.
The issue of pardons for whom and for what gets challenged in court and follows an expedited path to the Supreme Court.
Pressure will build for the Congress to act. However, the House and Senate will not act to impeach the president and will cite the upcoming 2018 elections as the reason. “Let the American people decide.”
Democrats win big in the elections. While campaigning they will not use the word “impeach” but will insist that Mr. Trump needs to be held accountable for his actions with Congressional oversight.
Mr. Trump, Fox News, and some House Republicans continue to cry that the system was rigged and that an attempted “coup” is underway. Mr. Trump embarks on a series of campaign rallies to build support among the minority of voters that still support him. Angry demonstrations ensue.
Most Americans are appalled at the complete story and the fact that Mr. Trump will not step down plus the fact that he is trying to pardon the wrong doers — especially close family members. The Democratic landslide is a result of voters being fed up because Congress will not act.
Very bitter disputes break out in violence on both sides of the issue as Mr. Trump continues purposely to stir up animosity and anger.
There is very little energy left to try to tackle the big issues facing our nation. American influence in the world continues to wane and other nations take advantage of our inward rage and lack of attention to international affairs. The Russians continue to meddle in western European elections and to support Syria and Iran. China consolidates its economic power and pulls other Asian nations closer to its orbit as they become the de facto leader of the region under the Trans-Pacific Partnership (TPP).
2018 ends without resolution of the Constitutional issues surrounding Mr. Trump and his associates’ actions. Trials begin for Mr. Manafort, Mr. Gates, and Mr. Kushner and others close to the president.
Merry Christmas to all and to all a good night!
I trust that you all had an enjoyable Thanksgiving weekend. In many ways we have so much to be thankful for so it is always nice to take time out and to reflect on our good fortune — whatever form that may take.
In our nationally induced tryptophan haze, one may have noticed, or more hopefully ignored, a bevy of tweets and other distractions that obscure the many important legislative challenges coming up in the next four weeks. Or more accurately, in the few days that the House and Senate are actually in session before Christmas. Nearly all of the following impact Americans in some form or another and are important to the smooth functioning of our nation. These are important issues that deserve serious consideration and discussion. I will let you decide whether or not that will happen.
To name a few:
- Tax cuts. The president promised a “great big beautiful Christmas present” with completion of the Republican tax cut. Both the House — which passed its version before Thanksgiving — and the Senate — which hopes to pass its version this week — have significantly different bills designed to permanently cut corporate taxes and to cut some lower and middle class taxes for a while. The Republican leadership is touting both bills as a boon to the middle class. Sorry, but I don’t see it. Besides adding at least 1.5 trillion dollars to the national debt over the next ten years, it makes some puzzling changes. For example, nearly all deductions (mortgage, student loan, state and local taxes, medical expenses, moving expenses and about 40 some more) are removed from the individual taxpayers’ ability to use them but keeps them in place for corporations. The argument is that the individual standard deduction will greatly increase (roughly doubled) and therefore there will be no need to itemize. At the same time, corporate taxes drop roughly 40 percent (from 35% to 20%) but they still keep all itemized deductions, including those listed above that go away for the rest of us. The real kicker is that corporate tax rates and rules are permanent and the rules for the rest of us are temporary. The non-partisan Tax Policy Center (TPC) estimates that for many of us, our taxes will actually go up over the next ten years as compared to current law. This happens primarily because of the “sunset” provisions impacting everyday Americans. Many Republicans are arguing that some time “in the future” Congress will make them permanent and so in the end, we all benefit. Except. Except. There is no guarantee that they will become permanent. If they don’t, we are victims of a big lie. And if they do, then it all has been a sham and a trick. In order to meet the rules of the Senate, they cannot exceed the 1.5 trillion dollar addition to the national debt. (To do so, they need 60 votes in the Senate, which means getting Democrats onboard, who, so far, have been shut out of any input to the bill.) Thus, the permanent cuts for corporations are paid for by the average tax payer. But not to worry, according to the Director of the Office of Management and Budget (OMB) Dick Mulvaney, it is all a trick. A “gimmick.” As he said on Meet the Press, in order to meet the Senate rules, “certain proposals can only have certain economic impact. One of the ways to game the system is to make things expire.” Or as he went on to say, “a lot of this is a gimmick… to get through these rules in the Senate.” This from the president’s point man on the cuts and in charge of explaining them to the public. There is a whole lot more to this issue, but it deserves a separate piece as the issues are complex with wide impacts on each of our futures. Keep an eye on this.
(Please note that there is no need to place a time limit on getting this legislation right. It is an arbitrary political goal to “deliver” a tax cut by Christmas. Remember that as it crowds out the following issues, many of which do have — or have already reached — a drop dead date to accomplish.)
- Government Shutdown. Funding to operate the federal government expires on 8 December. Here we go again. Both Republicans and Democrats are using the imminent expiration of the spending authorization to promote their political agendas. As in the past, it is unlikely that the Republicans can pass a spending bill without at least some Democrats voting for it as well (there is always a hard-core Republican group opposed to the amount of spending and the impact on the deficit — although they mysteriously voted for the increased deficit from the tax cuts). There is a “summit” planned tomorrow involving the leaders of both parties from both houses and the president to try to come to accommodation on this and other issues. Probably there will be a short-term extension to keep the government operating — a continuing resolution or CR. CRs wreak havoc on all government agencies from defense to agriculture as they limit immediate spending and give no clear guidance for the future, thus severely inhibiting planning for the future. Predictions are not optimistic as to a quick resolution because the Republican leadership remains laser focused on getting the tax cuts finished first.
- Defense Spending. As part of the overall objective of setting spending levels for 2018 many want to see defense spending increased from about $549 billion to about $600 billion. In order to do that, Congress must rescind a bipartisan 2011 budget deal that set spending caps on all areas of government. Democrats are insisting that any increases in defense spending must be matched by increases in non-defense spending or they will not vote to lift the 2011 caps. Under Senate rules, 60 votes are required to change the bipartisan agreement providing the limits so Democrats have a say in how this is resolved. Very little progress in resolving the issue is apparent and this impacts the funding for the government as a whole (see above).
- Health Care. Politicians on both sides of the aisle want to see the market stabilized for health care. Not surprisingly, there are differences on how to do it. The Alexander-Murray health care bill is a bipartisan effort to bring some continuity and stabilization to health care under the Affordable Care Act (ACA). The administration opposes this bill and the Senate version of the tax cut plan eliminates the penalty for not having insurance — thus creating the possibility of increased premiums for those with insurance and eventually driving a predicted 13 million from the roles. (See my previous posts about the “three-legged stool” needed to keep the system stable.) Democrats say the Alexander-Murray bill is off the table if the repeal of a key provision of the ACA is enacted. Republicans are still making noise about “repeal and replace in 2018.” Compromise seems unlikely and the public suffers.
- The Children’s Health Insurance Program. The generally popular CHIP provides health coverage for about 9 million poor children and others. The current legislation expired on 30 September and it is unknown when this usually bipartisan issue will be addressed. To date, the states have picked up the slack to keep the program going in the short-term but many say that funds will run out at the end of the year. This is also caught up in the “need” to address tax cuts before other legislation.
- Immigration. The president announced the expiration of the Deferred Action for Childhood Arrivals (DACA) (the Dreamers) program last September and gave Congress until March to come up with a system for dealing with the children brought here illegally by their parents. Many Democrats say that they will not vote for any spending bills unless this issue is addressed by the end of the year. Some Republicans say that they will not address immigration unless “The Wall” is part of the bill. There are also Republicans that agree that the Dreamers issue needs to be addressed and that may actually favor their remaining in the country. But, again, they argue this cannot be part of any spending bill and can only be addressed after the tax cuts pass.
- Intelligence Gathering. On 31 December of this year Section 702 of the Foreign Intelligence Surveillance Act will expire. This section of the law, approved by Congress in 2008 as a part of the response to the terrorist attacks on 11 September 2001, is intended as a tool to track and thus foil foreign terrorists. It is meant for use in conjunction with foreign citizens outside of the United States and has specific provisions to protect American citizens. Unfortunately, critics of the provision claim that vast amounts of information is collected on U.S. citizens as they communicate with foreigners — any foreign national, not just those suspected of being terrorists. Known as “incidental surveillance” it raises many questions of privacy and government intrusion into the lives of innocent, ordinary U.S. citizens. The NSA considers this provision to be among their most important collection capabilities and fear that if they lose the ability to continue the surveillance that it will severely inhibit their counter-terrorism capability. There is general bipartisan support to extend the statute, but with some restrictions to further try to protect Americans’ privacy. Currently, there are no plans to address the expiring statute by the end of the year.
- Disaster Relief. The Administration asked Congress for $44 billion in disaster relief for help in mitigating the impact of the hurricanes and wildfires that affected many areas of the country this year. To pay for it, they have asked for reductions in other expenditures, such as benefit programs. By all accounts, 44 billion — a lot — is inadequate to meet the need. Puerto Rico alone estimates that it will cost $99 billion to get the island back on its feet. Congress has promised to provide the aid, but does not plan to address the issue with concrete action (money duly appropriated) until the tax cut plan is finished.
- Iran Sanctions. By declaring in October that Iran was not in compliance with the international deal to limit Iran’s ability to develop nuclear weapons, the president activated a 60 day period which expires in December for Congress to act to impose new sanctions or not. The general sense is that there is mostly bipartisan agreement not to extend new sanctions on Iran and thus to keep the deal in place. However, at the end of the 60 day period the ball is back in the president’s court and it may be that inaction on the part of Congress will lead to action by the president and thus put the deal in jeopardy.
And there’s more! But you get the idea. Not much of anything will get done until the tax cuts are passed, which is not a sure thing in the Senate. Even if it does get through the Senate this week, or soon after, they still need to reconcile the two versions of the bill — no easy task as they are significantly different in several important areas. All deadlines discussed for the tax cuts are purely political and self-imposed, unlike many other items in need of Congressional attention.
It is sure to be a busy political December. Enjoy! And don’t let the tweeting distract you from the real action going on.
A single failed 2001 shoe bombing attempt on an airliner bound for Detroit.
— We all now take our shoes off before boarding any airliner.
A single failed 2009 underwear bombing attempt on an airliner bound for Detroit.
— We all now have to go through full body scanners before boarding any airliner.
A plot to turn a lap top into a bomb was foiled.
— Laptops were banned on many airline flights.
A legal immigrant kills 8 and injures 12 in New York City.
— Close the borders to immigrants. “Extreme vetting.”
A single terrorist shooter kills 59 and wounds 241 people in Las Vegas.
A single terrorist shooter kills 26 and wounds 20 in Sutherland Springs Texas.
— “It’s not a gun situation.”
378 mass shooting incidents (defined as four or more people shot) in 2017 alone.
“Guns don’t kill people, people kill people.”
In February 2017 the president signed a decree scrapping the regulation aimed at keeping guns out of the hands of severely mentally ill individuals.
Gun homicide rates in the U.S. are 25 times higher than any other high income nation.
Guns kill approximately 1300 children in the U.S. each year.
The Congress refused to pass legislation preventing individuals on the terrorist no fly list from buying guns.
It is not anti-gun to be for gun safety. As the greatest nation on earth we should be able to figure out how to keep our Second Amendment right without giving up our right not to be randomly shot by a disgruntled idiot. It is a national disgrace. It most definitely is not “the cost of freedom.”
I don’t want to hear anymore “thoughtsandprayers.”
The Republican Congress is moving ahead with passage of a bill to enact tax “reform.” Actually, if one takes a close look, it really is not tax reform, but rather a tax cut. Some of us may be for it, some of us may be critical of it, some of us may think that there is no need for a tax cut at this point. Whichever approach you favor, there are elements to the proposal that all of us need to understand as we will all hear different spins on the bill as more and more of it becomes clear.
The one thing we do not need or want — whether or not one favors the current tax cut proposal — is what I increasingly hear from Republican members of Congress. That refrain is something along the lines of what’s important isn’t so much the details of the legislation but that this Congress must pass something. Anything. They could not deliver on Repeal and Replace and have so far not enacted any significant legislative at all. Something has to pass or voters will think that they are ineffective and unable to govern. As a result, the argument goes, they will be decisively punished at the polls in 2018 and therefore something is better than nothing.
Wrong. I could not think of a worse reason to pass a bill, especially one that will impact every single American tax payer and business. The last major attempt at tax reform took place under President Reagan in the early 1980’s. Thus we hear that this is a once in a generation legislative achievement. True or not, it is clearly significant and will have a lasting impact on our economy.
So, whether or not one supports the current bill, there are some things of which we all need to be aware as we decide if this is a good idea or not. As usual, a few caveats apply.
The final version of the bill is unknown. Even as I write, negotiations are taking place that will cause certain provisions to change or get modified as the wheeling and dealing takes place. This deal making can substantively change the bill and not necessarily for the better. Even as the version in the House is getting all of the attention, the Senate is working on its own bill, the provisions of which are being kept under wraps. We can assume that it will probably be similar to the House version, but there is no guarantee. The competing bills then go to conference where negotiators hash out the differences. The question will be whether or not the “deals” see the light of day before voting takes place. Finally, recall that the Republican leadership in the House and the Senate have decided to lock out the Democrats and pass the bills on a straight party-line vote. Regardless of whether or not this is a good idea, certain Senate rules kick in as a result which means the House and Senate may not be able to do all that they want. If they break certain rules — outlined in the just passed budget bill which got little attention because of other events — then the Senate will require 60 votes to pass the legislation, which is unlikely if the Democrats are locked out of any input to the bill.
I know, a lot of inside baseball type maneuvering, but it matters because the rest of us have to live with the results.
There are two major economic reasons for fooling around with taxes (either raising or lowering them). One is to stimulate the economy to get it growing again. The other is to bring about a balanced budget to stop or bring down the growth of our national debt. The two are not necessarily mutually exclusive, but they tend to act in competition in a modern economy.
Some argue that the economy cannot be stimulated further because current unemployment rates are very low. According to the Labor Department, unemployment in October was 4.1% and there were 6.2 million open jobs on the market. Demand for workers is exceeding those available. During the presidential campaign, the Republican candidate claimed that the government’s statistics were “false” and that the unemployment rate was really much higher. He now argues that the numbers are correct. Regardless, an argument can be made that although the unemployment rate is the lowest in decades, there are many people that have stopped looking for jobs even though there are 6.2 million available. Why the disparity? Probably because the skill levels needed for the empty jobs is greater than, or a poor match with, the skills of those that stopped looking for jobs. Couple this information with the fact that worker productivity is the highest ever — thanks to automation and other technology advances — and one can rightly ask how this tax cut is going to further stimulate growth in the economy.
The usual reply is that corporations will create more jobs by using dollars that would have gone to taxes to instead expand production. This assumes that there is more demand for their products, an assumption that may or may not be true but is an unknown and should not be assumed.
The use of “dynamic scoring” helps the case for the tax cuts. This is the theory that more money not spent on taxes will enter the economy as people have more cash to spend and this in turn causes the economy to grow and will actually bring in more tax dollars in the long run than are lost with the cuts. Historically, this has rarely if ever happened.
The proposed tax cuts now before Congress will not balance the budget and will in fact increase the national debt by at least 1.5 trillion dollars over ten years. (By the way, this is one of those intricate rules that the Senate must follow under the just passed budget. They cannot go over that number or 60 votes will be required for passage.) One might ask what happened to the Republican “deficit hawks” that argued for the past decade that the debt was growing too fast and even argued for a balanced budget amendment to the Constitution. Beware of the need to pass something. One can also argue that it is not good governance or good policy to finance a tax cut through increasing the deficit. It narrows the options going forward when it may be necessary to finance a major catastrophe or war through deficit spending.
In fact, the current proposal cuts government revenue by roughly 4 trillion dollars. For those that argue for smaller government and less spending, that may be attractive. Remember that many in Congress are also arguing for increased defense spending, major infrastructure spending, no cuts to Medicare or Social Security in an aging population, and other measures that will increase spending. The money has to come from somewhere.
To get the 4 trillion in cuts down to 1.5 trillion in actual lost revenue, the bill makes up the difference by eliminating many current deductions. This is where it starts to get interesting to you and me.
There are always winners and losers in these types of bills. Depending on where you sit, you may or may not like what you see. To me, we need to understand who wins and loses and decide for ourselves whether or not our elected representatives should vote for or against the bill. There are philosophical reasons to support or oppose it and there are also practical reasons to do so or not. Sometimes those line up, sometimes they do not.
As an aside, it is impossible to know if the president makes out well or not through the provisions of this bill because we do not have his tax returns. Every analyst that I have seen opines that if his stated worth and holdings are true, the man and his family makes out “bigly” if the bill passes. Call it a tycoon real estate developers dream.
Those that authored the tax cuts tout it as a huge win for the middle class and not so much for the wealthy. Please investigate it for your self and do not take as gospel the talking points of anyone in the House or Senate, Republican or Democrat.
Here are some of the more eye-opening provisions. These are only a sample. Read the 429 page proposal for yourselves and see if it meets your needs.
According to the talking points, the attempt at tax reform is to simplify the tax code. If you dig through the details, it really does not do that. There will be no “post card” sized tax form unless you already use the “1040 EZ” form and use photo shop to make it fit on a post card.
According to the talking points the cuts will put about $1,182 into the “typical family of four.” First, I’m not sure what a “typical” family might be (more on that in a minute), but more broadly, of the $1.5 trillion cut about $1 trillion goes primarily to corporations, about $300 billion to tax payers, and about $200 billion to the most wealthy Americans via the elimination of the estate tax.
Back to the typical family. Some will receive a tax cut, although how much is in dispute by some economists, but they generally agree that some will get a cut and that some middle class folks will actually have their taxes go up. The main argument from the bill’s authors is that increasing the standard deduction ($12,000 for individuals and $24,000 for married couples) will eliminate the need to itemize deductions as most people will be better off not doing so. Perhaps. Individual circumstances vary so widely that it is hard to generalize. But middle class tax payers should know that among other deductions that are to be eliminated include:
- Federal deductions for state and local taxes (known as SALT) are eliminated. Property taxes will be deductible up to $10,000. The argument against “double taxation” — used in eliminating the estate tax — doesn’t seem to matter here. For states with state and local taxes (including sales taxes) one will pay twice on the same income. Arguments that high state taxes that are deductible means those with no or low state taxes subsidize them do not hold up. There are many ways to analyze the return on investment, but in general, states with low or no state taxes get back more from the federal government than they send to Washington in taxes and just the opposite for the supposed free loaders. For example, New York (high state tax) gets back about 75 cents for every dollar it pays in federal taxes and Florida (no state income tax) gets back about $4.50 for every tax dollar.
- The Alternative Minimum Tax (AMT) is repealed. This is the methodology that hits many middle class tax payers (although it was originally designed to keep wealthy people from paying no taxes through shelters and other tax dodges) requiring that when certain marks are reached, the owed tax is calculated in two different ways and the higher rate prevails. Estimates are that the president will save tens of millions of dollars every year with the elimination of the AMT.
- Elimination of the deduction for medical expenses. Currently, one can deduct all expenses over 10% of adjusted gross income. No deductions will be allowed under the new proposal. This obviously impacts people with major medical bills, often the elderly, as it includes long-term care and other services needed for the aged or infirm.
- Deductions for student loan interest is eliminated.
- Estate Tax limits rise from the current $5.9 million to $11 million and then is eliminated in 2024. This is a hot button issue. Most of us will never be impacted by it, but Republicans claim it is “double taxation” (see above) and harms small businesses. Its elimination adds about $200 billion to the deficit over ten years. Estimates are that about 80 businesses were impacted by it last year. The president’s family is expected to increase their inheritance by approximately $500 million through its elimination. Keep an eye on this. One proposal to pay for this change would provide for estates passed to heirs to be valued at their original prices (such as stock you bought 20 years ago and want to pass on) rather than the current rule where the origination value is that that it held at the time of passing. This would impact far more people than currently affected by the estate tax.
- A lower rate for “pass through” business income also sometimes called the “Trump loophole.” This applies to businesses such as partnerships, “S” corporations, sole proprietorships, and the like. It allows the owners to “pass through” profits from their businesses to be taxed as their personal income. Thus pass through income is taxed at no more than 25 percent — far below the 39.6 percent top individual income tax rate that now applies to pass-through income, or the 35 percent top rate that would apply to individual income under the Republican plan. Many very wealthy people such as the president use these types of arrangements for their businesses. It is expected that many will restructure their business arrangements to take advantage of this new loophole.
- There are proposals over the weekend to include repeal of the Affordable Care Act, or portions there of in the tax bill. Mixed signals from law makers make it unclear whether or not they will try to sneak that into the bill after failing to pass it into law over the last seven years.
- And a whole lot more, but you get the idea.
Clearly a “typical family” with a mortgage (deductions are limited under the bill) who are suddenly hit with catastrophic medical bills while paying off the student loans they took out to meet the needs of the new work place will fare totally differently than those families used in the talking points. Very little is “typical” of any family.
Primarily we all need to keep an eye on the negotiations that will keep specifics of the bill in flux until the day it is voted up or down. Whether for or against these provisions, we should insist on a fair and transparent process where our representatives know what they are voting on and what the implications for the new laws will be. All of us will be impacted in some way.
Tax reform is a good thing. There are many complicated elements to the current law and other elements that are unfair to some or too generous to others. It’s complicated. It’s messy. Not everyone will be happy. What we don’t need is a closed door, rushed job, unclear bill that gets passed only because they had to do something.
In the last ten to twelve days we have seen a remarkable display of something — although I am not really sure what we are seeing. But from where I sit, it isn’t good.
In succession we have Senator John McCain (R-Ariz) (a former nominee for president), former Republican President George W. Bush, Senator Bob Corker (R-Tenn) and Senator Jeff Flake (R-Ariz) all directly or unmistakably reference, the leadership philosophy, character and fitness for office of our current president. All found him seriously wanting in every imaginable category. On top of that, former Democrat President Barack Obama and former Democrat Vice President Joe Biden made similar remarks. But of course their remarks don’t count because of the fact that the Democrats are all “losers” and “whiners.” So let’s just focus on the president’s own party and their criticism.
Some Republicans and some reporters and analysts use words like “feud” and “tit for tat” and “Junior High disputes” to describe the events of the last week. Wrong. Likewise is it wrong to think that their words have no real meaning because, in at least two cases, they have chosen not to run for re-election. Perhaps it gave them more leeway to speak up, but it does not change the import of their words.
To brush it off as some kind of personality clash is to lose sight of what serious men of conscience are actually saying. It is also not really a matter of policy or ideological differences either. For goodness sake, Senators Corker and Flake vote with about a 96% consistency rate with the stated goals of the rest of their party and presumably of the president. (Although it is difficult to know about the latter as his grasp of policy details is suspect and he can change his mind about an issue several times in the same day. For example, with the bipartisan Alexander-Murray bill for a temporary fix of the health care system, where he was for it before he was against it — in the same afternoon.)
These proven Republicans, all of whom I respect even if I don’t agree with their every approach to solving the nation’s problems, make a compelling case that the president is manifestly unfit for office and that his tumbling tumbleweed approach to governing diminishes our place in the world and is dangerous. It is a question of character and the current president is found to be profoundly lacking, if not completely devoid, of it. More precisely Senator McCain said, among other things:
To fear the world we have organized and led for three-quarters of a century, to abandon the ideals we have advanced around the globe, to refuse the obligations of international leadership and our duty to remain ‘the last best hope of earth’ for the sake of some half-baked, spurious nationalism cooked up by people who would rather find scapegoats than solve problems, is as unpatriotic as an attachment to any other tired dogma of the past that Americans consigned to the ash heap of history.
We live in a land made of ideals, not blood and soil. We have a moral obligation to continue in our just cause, and we would bring more than shame on ourselves if we don’t. We will not thrive in a world where our leadership and ideals are absent. We wouldn’t deserve to.
Not to put too fine of a point on it, but the phrase “blood and soil” is the phrase used by American white supremacists, is associated with some supporters of this administration, and comes from a philosophy from Nazi Germany. “Blut und Boden.” Look it up.
Likewise Senator Flake characterizes the president’s character as a danger to our nation and to peace in the world. The speech is worth reading as many think that in historical terms, we will look back upon it as a clarion call to action to stop the reckless behavior of the current administration. He warns of creating a “new normal” where the most crass and personal petty attacks and lies are taken as the course of events in politics. His condemnation of the current administration is lengthy, but the heart of the matter can be summed up in these passages:
If we simply become inured to this condition, thinking that it is just politics as usual, then heaven help us. Without fear of the consequences and without consideration of the rules of what is politically safe or palatable, we must stop pretending that the degradation of our politics and the conduct of some in our executive branch are normal. They are not normal. Reckless, outrageous and undignified behavior has become excused and countenanced as telling it like it is when it is actually just reckless, outrageous and undignified.
And when such behavior emanates from the top of our government, it is something else. It is dangerous to a democracy. Such behavior does not project strength because our strength comes from our values. It instead projects a corruption of the spirit and weakness. It is often said that children are watching. Well, they are. And what are we going to do about that? When the next generation asks us, ‘Why didn’t you do something? Why didn’t you speak up?’ What are we going to say?
Mr. President, I rise today to say: enough. We must dedicate ourselves to making sure that the anomalous never becomes the normal.
This is not a “tit for tat” or a personality conflict. These comments, and similar ones by President Bush and even more blunt comments by Senator Corker are alarming. Or they should be.
Politics in the United States has changed in the past year or so from differences in ideas to one where we argue over the populist slogans of the sloganeer-in-chief. I heard it described the other day as “emotional sustenance.” Substance from the chief executive is no longer required, all that is asked of him is that he entertain us. Sadly, that entertainment is not even positive but geared to salve the emotional feelings surrounding perceived slights of those that just want to be mad at the establishment and he indulges them. Substance may not be dead in the Congress, but it is on life support because the man at the top cares nothing about it. Watch the interview from last weekend with Maria Bartiromo of Fox Business News and the president. She served up the most soft ball type questions imaginable and tried to lead him through his own policies, but with little success. Asked about Russia he talked about Bob Kraft (owner of the NFL New England Patriots) and the Super Bowl ring he gave (?) to Vladimir Putin. Having already mentioned the Alexander-Murray bipartisan health care bill, here was his description of it:
Well, I’ve — I have looked at it very, very strongly. And pretty much, we can do almost what they’re getting. I — I think he is a tremendous person. I don’t know Sen. Murray. I hear very, very good things.
I know that Lamar Alexander’s a fine man, and he is really in there to do good for the people. We can do pretty much what we have to do without, you know, the secretary has tremendous leeway in the — under the Obama plans. One of the things that they did, because they were so messed up, they had no choice but to give the secretary leeway because they knew he’d have to be — he or she would have to be changing all the time.
And we can pretty much do whatever we have to do just the way it is. So this was going to be temporary, prior to repeal and replace. We’re going to repeal and replace Obamacare.
A grasp of the issue? You be the judge.
Here is what we now have in the United States of America. We have a chief executive who created a cult of personality, and continues to expand that cult, with no grasp of the issues, no desire to learn the issues and who thinks that bullying (“Liddle’ Bob Corker”, “Little Rocket Man”, Jeff “The Flake” Flake, and countless others) is the way to govern and accomplish something meaningful.
And it gets worse.
As late as yesterday, the Commander-in-Chief continued to argue with a Gold Star widow. Not Congresswoman Frederica Wilson (D-Fla) who is a close family friend (you may know her better as the president does as “Wacky Congressman (sic) Wilson “). The widow.
Most disappointing was the press conference given by Chief-of-Staff John Kelly last week. After giving a heart wrenching, and something the country as a whole needed to understand, explanation as to how our fallen military members are returned home to grieving families, he went too far. He too attacked Congresswoman Wilson with what was proven to be false accusations. And he went on to show that in this White House, he is really just an admin guy and mouthpiece for the president. Clearly, he does the president’s bidding without question and thereby refutes the idea that he is any kind of filter or brake for the president’s divisive views.
Many people, including military veterans, I’ve spoken with are profoundly disappointed in the president and John Kelly. Many consider this the low point for this administration.
Sadly, I think that demonstrates a lack of imagination. I don’t think we have yet realized just how low the president and many of his advisers are willing to go. How many times in the last two years have people said “that’s it” — surely it cannot get any worse. And then it does.
I think that is why Senators McCain, Corker, and Flake spoke out in recent days. That is why Presidents Bush and Obama spoke out in recent days. They realize the serious threat to our republic embodied by this administration and they cannot sit by and watch it be destroyed.
Unfortunately, too many others in Congress are willing to trade their souls for a tax cut.
All of us have a role to play. We cannot sit idly by and watch our country careen towards ruin.
Yesterday the Trump Administration put a six month limit on the continued use of the Deferred Action for Childhood Arrivals (DACA) policy that was in effect for roughly the last five years. This is the order that allowed undocumented immigrants brought here as children, with no say in the matter, to stay in the United States as long as they met certain criteria. You may know the recipients of this policy as Dreamers, which came from the Congressional DREAM Act (Development, Relief, and Education for Alien Minors Act) which is legislation proposed in Congress in various forms since 2001 with chances of passage in either the House or the Senate, but never both at the same time. After the last failure, President Obama in 2012 put the DACA into practice. The criteria for being designated as a Dreamer are as follows, although under the policy, meeting these criteria does not automatically qualify the applicant as a Dreamer. They had to:
- Come to the United States before their 16th birthday
- Live continuously in the United States since June 15, 2007
- Be under age 31 on June 15, 2012 (i.e., born on June 16, 1981 or after)
- Be physically present in the United States on June 15, 2012, and at the time of making their request for consideration of deferred action with US Custom and Immigration Service
- Have no lawful status on June 15, 2012
- Have completed high school or have a certified GED or have an honorable discharge from the Armed Forces or be enrolled in school
- Have no convictions of a felony or serious misdemeanors, or three or more other misdemeanors, and not otherwise pose a threat to national security or public safety.
It is estimated that there are approximately 800,000 registered Dreamers in the United States.
“Registered” could be a problem because they were promised no retribution if they came in out of the shadows and became useful members of society. How many are now waiting for the knock on the door that they thought would not be of concern to them? The talking points distributed by the Administration includes this advice to the Dreamers.
The Department of Homeland Security urges DACA recipients to use the time remaining on their work authorizations to prepare for and arrange their departure from the United States — including proactively seeking travel documentation — or to apply for other immigration benefits for which they may be eligible.
No worries. They will just go back to a country where they probably know no one and do not even speak the language. Sure.
There is much ado about how “conflicted” Mr. Trump is about this decision because he wants to follow the rule of law and yet he has “great heart” and “loves” the Dreamers. Just ask him. His administration portrayed the decision as a moral dilemma. Hogwash. Mr. Trump has about as good of a moral compass as a tumbleweed. Over time, Mr. Trump has had as many moral and political positions on the widest variety of issues as anyone known to have achieved elected office. You name a position, and he has had it at one time or another, including on Dreamers.
Mr. Trump is not conflicted over moral decisions. He is only conflicted in terms of what gives him the best political outcome. In this case, he got himself into a dilemma because there is no good political outcome. All he cares about is “winning” and not what the impact of the policy might be. Follow his argument in the ensuing paragraphs and see how circuitous and illogical it actually turns out to be.
His primary purpose for announcing this change in policy now, under less than optimal circumstances given the need before the end of September to raise the debt limit, pass a budget, provide aid to the victims of Hurricane Harvey, deal with the crisis in North Korea, and prepare for what looks to be another major crisis from Hurricane Irma, to name just a few things hanging over our heads, is to satisfy the hard-liners in his base — which continues to shrink. Arguably, on this issue he is not even following his base. Most polls show that about 75% of Americans approve of DACA and only about 15% say the Dreamers should be deported. Of Trump supporters only 25% say the Dreamers should be deported and about 70% think that DACA should stay in place.
Mr. Trump’s motivation is only and purely political. Yesterday, he showed that he does not have the fortitude to stand by the tough calls. We all know his penchant for the big show and, as he calls them “ratings.” So here is a big “tell” — he was nowhere to be found when the announcement that DACA would end was made by Attorney General Jeff Sessions. The Attorney General took no questions from the press after the announcement. Mr. Trump demonstrated no sense of responsibility for his decision, even as his press secretary constantly turned all questions to Congress and away from Mr. Trump.
There was no moral dilemma for Mr. Trump. I would say there never is one that impacts his thinking, but I digress. Instead of addressing the issue, he passed it to Congress in a very Pontius Pilate kind of way. He washes his hands of it. If in six months there is no new DREAM Act or something like it, then it is not his fault. Oh by the way, Mr. Trump gave absolutely no guidance to Congress as to what kind of bill it should be, what he wants to see (or not see) in it, and what problems it should solve. No guidance whatsoever. Like many issues, he provided no leadership on the issue. I suppose as with health care legislation, “I am sitting with pen in hand” to sign a bill. Any bill. We are winning. If nothing passes it is not his fault. If it does pass he will be the first to proclaim that he solved the problem. A huge problem.
Mr. Trump cannot take the lead on solving the Dreamer problem because if he does, it will undermine the entire basis of his campaign and post-election rhetoric. His demagoguery is based on the argument that immigrants are stealing jobs. But he suspected, and now knows, that there will be a big backlash to heartlessly tossing out young people that are Americans in every way except on paper. Mr. Trump needs to prop up his campaign lies (fact checkers now have him at 1,114 false or misleading statements in the first 227 days of his administration) that deportation helps US jobs.
He rose to prominence as an anti-immigrant fear monger, starting with the despicable “Birther Movement” claiming President Obama was not an American. Since then has built his coalition around being anti-immigrant. Simply compare the record of the average Dreamer and what they have done for America (and perhaps more importantly what they will do in the future) to all of the accomplishments of Mr. Trump’s hero, Sheriff Joe Arpaio.
Even with that, he cannot be consistent. Mr. Trump makes an economic argument as to why we should deport all undocumented immigrants because they are taking all the jobs. But then he turns around and pushes Congress to pass a law to keep them. Great logic, great morality, great demagoguery.
Houston, we have a problem. Who is going to rebuild following Hurricane Harvey? Who does Mr. Trump think is going to do the construction and hard-core clean up following the destruction experienced across many, many square miles of Houston, east Texas and Louisiana? Sure, let’s get rid of all those hard-working $10 an hour folks and bring in, who exactly? Get real.
Most people may understand what Mr. Trump’s decision means on personal terms to those impacted. Most, however, probably do not understand the economic impact. Every major CEO and most small business owners opposed the termination of DACA based on economic factors. Studies indicate that about 91% of all Dreamers are employed. As their work permits expire, about 30,000 will lose their jobs each month. That translates to lots of lost productivity and expertise for the their employers and adds up to reducing the national gross domestic product by $433 billion (yes, with a B) over ten years. It also means the loss of nearly $25 billion (another B!) dollars in taxes to programs such as Medicare and Social Security. (Yes, Dreamers pay taxes.)
None of that takes into account the Dreamers currently serving on the front lines in Iraq and Afghanistan and elsewhere. What happens to them? What happens to the veterans that honorably served this nation? Just throw them out?
There clearly are some Constitutional issues. These are worthy of consideration and debate. Clearly Congress should shoulder the burden and do their job, as they should do in so many areas where they seem unable to govern. Usually, however, Constitutional issues get settled in the courts, not by a unilateral decision on the part of Mr. Trump or Attorney General Sessions. As I write, many state Attorneys General have spoken up and plan to take Mr. Trump’s decision to court. We shall see how that unfolds.
But let me ask this rhetorical question. Early in his administration, Mr. Trump’s Muslim Ban was touted as being totally within the Constitutional bounds of his office. They argued that he had “extraordinary powers” in cases of immigration and was totally within the power of the office to keep people out. Does it not seem logical that if Mr. Trump can keep people out, he can also use that power to keep them in?
In all, I find this one more example of a tumbling tumbleweed administration. Mr. Trump is just blowing in the wind, merely reacting day-to-day with no particular vision (and according to reported sources inside the White House, no understanding of the issues or their implications) other than keeping the dedicated base cheering at his campaign rallies. And oh, spending time watching “the shows” on television and tweeting.
The last few days have been deeply troubling. I fear that I will be saying that over and over and over for the next three and a half years. Every time it seems that our president cannot do anything more outrageous, he does it. There is no low bar. Every time I think he’s gone about as far as he can go, he goes further. Yesterday takes the cake. So far. I can never say he won’t go lower.
I do not need to go into detail about President Trump’s impromptu press conference from the gilded lobby of Trump Tower. You have undoubtedly heard all about it already. And if you haven’t, all you need to know about his support of Nazis and Klansmen, not to mention how he butchered our history by putting Robert E. Lee and Thomas “Stonewall” Jackson on an equal basis with George Washington and Thomas Jefferson, is the following Tweet at 4:45PM, immediately following the president’s remarks yesterday, from former KKK leader David Duke:
Thank you President Trump for your honesty & courage to tell the truth about Charlottesville & condemn the leftist terrorists in BLM/Antifa.
So now what? Well, lots of politicians and business executives separated themselves from President Trump’s moral equivalency of putting the KKK, Nazis, Anti-Semites and other white supremacy groups on the same level as those that oppose them. Unfortunately most did not separate themselves from the president himself — just his remarks. Look carefully and you will see that very few actually condemned the president. A real failure of moral courage.
As Civil Rights leader Fannie Lou Hamer said in a speech to the 1964 Democratic National Convention in Atlantic City, “I’m sick and tired of being sick and tired.” For two years we have listened to Mr. Trump disparage group after group after group, from women to Mexican Americans. The events of the last few days are just one more data point in a long list of unacceptable statements and actions of the same vein. He is the same guy, we shouldn’t be surprised. So, when is he going to be held accountable by an equal branch of government — the Congress? When are Cabinet members and White House Staffers going to leave? Any ideas that Mr. Trump will change are pure fantasy. In a piece published this afternoon, conservative columnist Jennifer Rubin wrote out five concrete steps that Republicans must take to regain the moral high ground, restore the good name of the Republican Party and put Mr. Trump in a box to limit any future damage to our country. It is worth a look.
Unfortunately, it is extremely unlikely that the Republican leaders in Congress will do anything substantive to rein in Mr. Trump. They are focused on achieving their “agenda” which apparently does not include taking action to counter the rise of the vilest elements of our society. Thus the rats know that they can come out into the light now because no one is trying to push them back into their holes.
Looking at this from another angle, I am deeply disturbed not only by the president’s defense of racists bent on destruction (“both sides” did not commit a terrorist act, which I am not afraid to say even though Mr. Trump said it was “legal semantics”). I am ever more disturbed by his actions, of which yesterday’s impromptu press conference was just one more in a long line of troubling actions by the president.
This is what I mean. Yesterday’s press event was supposed to be an announcement concerning infrastructure plans. The president was to sign an Executive Order and turn the event over to Transportation Secretary Elaine Chao (spouse of Senator Mitch McConnell by the way) and depart — no questions from the press. It was planned. The Chief of Staff John Kelly, the Secretary and other cabinet level individuals were in place, briefed and all knew the plan. The president knew the plan and said he would stick to the “script.” He lied to all of them. The evidence? He had a copy of his speech from Saturday in his pocket which he pulled out. It wasn’t left over from Saturday — he purposefully pulled it from his pocket to start his tirade about the events in Charlottesville. He knew before he came down that would happen but did not bother to tell any of the other participants. One look at the photos and videos of the Chief of Staff show his dismay and dare I say horror at what was happening.
And that is my point.
Mr. Trump just had to prove — had to — that no one can control him and that he can do whatever the heck he wants to do. Period. He gave an inappropriate speech on Saturday following the disturbing events in Charlottesville. He doubled down through a nameless staffer on Sunday. On Monday cooler heads got to him and he read a prepared speech, without any emotion or sense that he believed what he was saying, but he did it and it helped. And then, and then, he could not control himself and the real Donald J. Trump came through. A petulant, whiny individual who always, always, always has to have the last word. He will not be controlled, he cannot be controlled.
You need further evidence? Look at his remarks on North Korea and Venezuela. Yes, Venezuela. He threatened military action against Venezuela because he could. And thereby undermined ongoing diplomatic efforts with our Latin American neighbors trying to bring pressure on that regime. And undermined Vice President Mike Pence who was on a diplomatic mission in Latin America.
He does things just to show that he can. Because he wants to. It is always, always, always only about him. That is even more frightening than what appears to be in his heart. Whether or not Donald J. Trump is a racist is something I can never know. But his words and actions indicate that if he is not, he is at least clueless about the mission and intent of the white supremacists who see him as “their man” and see him as helping their cause.
Where are our moral leaders at the national level? Thank goodness many mayors and governors around the country and of both political parties stood up and took action. Shoot, even the members of the service leaders on the Joint Chiefs of Staff put out statements today condemning the events in Charlottesville and the racist nature of those acts. They were clear and unambiguous. They did not mention Mr. Trump directly, but it is very clear when you read them that they are reacting to the president’s remarks from yesterday.
When will Congress find its moral footing?