Is The Sky Falling?

…Don’t it always seem to go, That you don’t know what you’ve got till it’s gone…

—– Joni Mitchell from the song Big Yellow Taxi

From time to time I try to do a self-evaluation as to my perspective on current events under this president’s administration.  In a nod to Chicken Little, I wonder if things are really as bad as they seem or whether I am falling prey to the hype. Am I running around yelling that the sky is falling for no reason?  In my view, there is less hype and more to be genuinely concerned about with this president as time goes by.  I worry that the incremental destruction of our political norms and traditions is passing the notice of many of our fellow citizens and that one day we will wake up and realize that what we all assumed was right in these United States is now gone.

Consider the following:

  • The president gutted the Department of Homeland Security (DHS).  We now have an Acting Secretary of Homeland Security and key department heads are missing or also have “acting” leaders including the Deputy Secretary of Homeland Security, the Undersecretary for Management, the Director of the Secret Service and the Director of Immigration and Customs Enforcement (ICE).  Any day, the Director of Customs and Border Protection (CBP) will be empty as he becomes the Acting Secretary.  Additionally in the DHS the FAA and FEMA are headed by acting directors.  There are other key offices empty.
  • When the president was asked who is in charge at DHS given all the vacancies, he replied, “Frankly there’s only one person that’s running it.  You know who that is?  It’s me.”
  • There are 716 positions in the government that require Senate confirmation.  Of those there are 140 with no nominee.  Only six are awaiting confirmation.  Positions without permanent leadership include the Secretary of Defense, the president’s Chief of Staff, and the Office of Management and Budget (OMB).  The other positions are generally department heads or at the Deputy and Assistant Secretary level across the government, in other words, the people that actually get things done.
  • The president is trying to interfere with the work of the Federal Reserve, an institution previously thought for decades to be above political interference which is critical to its credibility and role in shaping the U.S. and world economy.
  • The Attorney General of the United States is refusing to release the entire Mueller Report to the Congress.  He alone (or will it be with help from the White House?) will determine what will be released.  While it may be reasonable to withhold some of the report’s information from the general public, refusing to release it to Congress, who is authorized to deal with classified information and grand jury proceedings, makes it impossible to know whether the true story of the investigation will be known.  Additionally this week, Attorney General Barr asserted that the government was spying on the Trump campaign.  As he said, “I think spying on a political campaign is a big deal.  I think spying did occur.”  When asked to provide proof, he said he could not.  How convenient.  The man who controls what parts of the impartial investigation may be released can assert whatever he cares to and then not have to provide evidence.
  • The Attorney General got his job by currying favor with Mr. Trump.  His hiring is paying off for the president as Mr. Barr repeats many of the president’s talking points and provides further fodder for his assertions that he was “exonerated” (he wasn’t), that it was all a “hoax” (the entire intelligence community says it was not), and that it was an “attempted coup” (forgetting that the Special Counsel, Attorney General, Deputy Attorney General, FBI Director, etc., etc., etc.) were all this president’s appointees.  The president procured a personal attorney in Mr. Barr, and the United States lost an Attorney General.  (One might ask Mr. Trump and his supporters how a corrupt, phony, political vendetta prone organization could “exonerate” him.  A seemingly direct contradiction.)
  • Additionally, the Attorney General refuses to support the law of the land — the Affordable Care Act twice upheld in the Supreme Court — primarily because that’s the president’s position.  It’s kind of scary if a president can seek to overturn laws he doesn’t agree with by directing the Department of Justice to work to overturn it, even though it was twice deemed Constitutional.
  • Speaking of not following the law, it appears that Secretary of the Treasury Mnuchin will direct the Internal Revenue Service (IRS) not to turn over Mr. Trump’s tax returns.  This in spite of the fact that under the law the Secretary is not to interfere in decisions made by the IRS and the fact that a law is on the books that says the IRS “shall” turn them over to Congress upon request (not “may”, “could”, “might” or any other modifier).  The law is a 1924 statute enacted to uncover fraud within the Executive Branch following the Teapot Dome scandal.
  • After declaring a National Emergency and sending additional troops to the border, there is no Senate confirmed Secretary of Defense and no Secretary of Homeland Security. Not even nominees.  Where is the oversight?  Mr. Trump professes that “I like acting.  It gives me more flexibility.”  In other words, he likes people to be unsure in their jobs because it gives him more control over them.  Additionally, he does not have to worry about too many tough questions coming during Senate confirmation hearings.
  • Frustrated by the asylum laws governing immigrants, the president wants to undo them all and in fact argues that we eliminate judges that adjudicate the laws about asylum.  As he said this week, “And we have to do something about asylum.  And to be honest with you, you have to get rid of the judges.”
  • Among other measures being considered (again!) in the White House is an Executive Order ending birthright citizenship (anyone born on U.S. soil is considered a citizen).  So apparently the president and his advisers think that the president can unilaterally overturn the Constitution.  In this case, the 14th Amendment.

I could go on and on.  I find it very troubling that the assaults on the rule of law continue unabated and indeed, seem to be increasingly frequent and harsh.  On the other hand, the president is a known blowhard who continually speaks outrageously and without knowledge of nearly any subject.  Should we worry about his pronouncements or is it just more sound and fury rather than substance?  If during his presidency he has already told over 9,000 provable lies should we just dismiss most of his statements as more lies?  Or is there something there?

I think that there is something there.  The president does not seem constrained by any law  from taking action, even though many of his most controversial policies have been consistently overruled in the courts.  He and his administration willfully ignore attempts at oversight from the Democrats in the House of Representatives.  Republicans in the Senate are too afraid of being “primaried” (when did that become a word?) to stand up to him.  Where are the limits to his power as he continues to push the boundaries and in many cases break them?  Or are these concerns of mine just a gut level reaction to his abominable personality and persistent bullying and belittling?

In my heart I know that Mr. Trump cares nothing about the people of the United States.  He cares only of himself and arguably his family.  Whatever helps him personally and allows for his family to continue to make money off of the presidency is all that keeps him focused.

My concern is that having rid himself of nearly everyone in his Cabinet and close advisers that stood up to him to point out that his actions were unlawful, immoral or unethical (and in some cases all three) is gone.  Now he is surrounded by enablers.  I fear that as time goes by he will become ever more autocratic in outlook and action.  Reportedly, Mr. Trump models himself after President Andrew Jackson.  Remember what President Jackson is said to have remarked about a decision made by the Supreme Court under Chief Justice John Marshall, “John Marshall has made his decision.  Now let him enforce it!”  (President Jackson ignored the Supreme Court’s decision in Worcester v Georgia.  The case involved the sovereignty of Native American tribal lands.)

Mr. Trump is headed in the same direction as Mr. Jackson.  He sees no limits on his power and believes that he can ignore the law where it suits him.  And why not?  Throughout his entire life he has never been held accountable for his actions in any meaningful way.  With A.G. Barr’s unilateral assertion that the president is exonerated under the Mueller investigation, what is to make him think that anything or anyone will get in his way?

Sometimes I do think that I am Chicken Little.  Maybe I worry about the course of our nation a little too much.  Unfortunately, I am also a student of history and current events.  There are just too many examples throughout time where revolutions and the loss of freedoms did not happen overnight, but rather incrementally and slowly.  Most people’s lives were not immediately or directly impacted and so they didn’t pay close attention or fret over it.  And then one day, it was too late.  They didn’t know what they had until it was gone.

One at a time Mr. Trump’s actions may be more annoying than substantive.  Put them all together and it paints the picture of a man who knows no boundaries. A president who is slowly eliminating his opposition and consolidating power in his own hands.

An old U.S. Navy saying goes “Eternal vigilance is the price of safety.”  We should all remain vigilant to the actions of our president.

 

 

 


That Was The Week That Was

With apologies to the old 1960’s era television show — the precursor to shows on now such as the Daily Show — That Was The Week That Was, or as it was commonly known TWTWTW, or TW3, we just experienced among the craziest weeks in recent history.  Like the Daily Show, TW3 took actual news events and gave them a “can you believe it” comical twist.  Unfortunately, there was nothing comical about this past week.  If you were busy shopping or attending holiday parties, here are the highlights of what you missed over the past seven days.  In some semblance of chronological order, of which very little exists today in this administration, they include:

  • Late last Friday night a federal judge declared the entire Affordable Care Act (ACA) unconstitutional.  The judge said that since Congress lowered the tax for the Individual Mandate to zero, they essentially repealed the tax.  In two Supreme Court decisions the ACA was ruled constitutional because of the tax — which is a right held by Congress.  Since there is now no tax, the whole law was deemed unconstitutional, ignoring the long-standing legal precedent of “severability” which means that just because one part of a contract or law is deemed to be wrong, the whole contract or law is not voided.  More on this in a future post.
  • Interior Secretary Ryan Zinke resigned from the Cabinet to avoid investigation of his actions while in office.  This now means that since the mid-term election in November, Mr. Trump has fired or accepted the “resignations” of the Attorney General, his Chief of Staff, the Ambassador to the U.N., and the Secretary of Defense.  There are still countless White House staff positions, Assistant Secretaries, and Ambassador positions yet to be filled two years into this administration.
  • It was revealed that there are currently at least 17 investigations of Mr. Trump, his organizations, and associates by at least seven different jurisdictions.  (The Special Counsel, the U.S. Attorney for the Southern District of New York, the U.S. Attorney for  the District of Columbia, the U.S. Attorney for the Eastern District of Virginia, Attorneys General from New York City, New York State and other states, and a “mystery” investigation that is under court seal.)
  • Two independent studies reported to the Senate Intelligence Committee that the Russians’ involvement in social media and efforts to help Mr. Trump and to hurt Secretary Clinton were more widespread than previously understood.  It continued well after the election and shifted focus to undermining Special Counsel Robert Mueller and his investigation of Mr. Trump.  In particular, the Russians took actions to suppress the minority vote.  Since Mr. Trump won the Electoral College by a total of approximately 80,000 votes spread across the three states of Pennsylvania, Wisconsin and Michigan it is probable, but not provable, that their actions changed the election.
  • General Michael Flynn arrived for sentencing thinking that he would get probation.  Judge Emmet Sullivan disabused him of that perception and threatened to lock him up.  “I am not hiding my disgust, my disdain, for this criminal offense,” said the judge.  Keep in mind that the judge has seen the redacted parts of the case that detail the full extent of the former National Security Adviser’s role in the campaign, transition and administration.  The sentencing was postponed for 90 days to give General Flynn another chance to cooperate with the investigation.  (Hint. Hint.)
  • In an ongoing civil suit in New York State, the Attorney General of New York attained a court order for the Trump Foundation to shut down.  The Foundation will distribute its remaining funds under court supervision.  The suit continues.  The N.Y Attorney General argued that the Foundation was little more than a slush fund for Mr. Trump, the Trump Organization and the Trump campaign.  All illegal activities.
  • Acting Attorney General Whitaker refuses to recuse himself.  The senior career ethics professional in the Department of Justice told the Acting A.G. that he should recuse himself from the Mueller Investigation.  Mr. Whitaker decided not to do so.  Remember that A.G. Sessions forever will feel the wrath of Mr. Trump for having rightly recused himself last year following the appointment of the Special Counsel.
  • The president unilaterally announced the withdrawal of U.S. forces from Syria within 30 days. On Twitter. He further ordered that plans be drawn up to withdraw most if not all of our forces from Afghanistan.  This decision was met with great joy and celebration in Russia, Iran, and by Syria’s despotic ruler.  It takes the U.S. out of any significant role in the future of the Middle East and sends a message to our friends and allies that we cannot be trusted.  The Syrian Democratic Forces (SDF) are the Kurds.  Through U.S. training, equipping and our Special Forces fighting alongside, they have become the most effective fighting force in Syria and were our partners in driving ISIS out of the cities.  We are now throwing them under the bus.  The Turkish government (along with Iran) does not want the Kurds to be a strong entity in the region and indeed the Turks are planning to attack them as soon as we leave.  Likewise negotiations to end the conflict in Afghanistan are now in jeopardy because the president wants us to leave.  All of our opponents now know to just wait us out.  We have lost all credibility in much of the world, but especially in Asia.  We also undermine Israel with this decision as the Syrians, Iranians, and Hezbollah and others can now consolidate their power, gain new territory and not worry about a U.S. presence in the area.  This is a dream come true for Vladimir Putin.
  • The president agreed to a Continuing Resolution to keep the government open until 8 February, the Senate unanimously voted to approve it and then he changed his mind and refused to go along unless he got at least $5 billion for a border wall.  Ironically the approximately 800,00 federal personnel that will be impacted are significantly represented by TSA agents, Border Patrol agents, Coast Guardsmen (the Coast Guard is not part of the Defense Department but falls under the Department of Home Land Security) and others charged with keeping our borders safe.  They will keep working but not get paid until the budget bill passes. For those that have mortgages, Christmas presents to buy, groceries to feed their family and other obligations, getting paid sometime in the future is not helpful to their current situations.  Mr. Trump promises a “very long shutdown” if he doesn’t get his way.  Remarkably, Representative Mark Meadows (Trump-NC) said that federal employees knew what they were getting into.  “It’s actually part of what you do when you sign up for any public service position.”  (Someone should tell Mr. Meadows that a well-run government does not shut down.  Furthermore, the Republicans have controlled the House, Senate and White House for two years.  Apparently that isn’t enough time to, you know, do your job and pass a budget.)
  • Secretary of Defense James Mattis resigned.  Take a look at his resignation letter here.  Those familiar with the way such things normally work, Secretary Mattis’ letter is a direct rebuke of Mr. Trump and his policies and his leadership.  Through the eloquent and gentlemanly language, the Secretary basically tells Mr. Trump that he is full of it and an anathema to all that the United States stood for, for over seventy years.  This is unprecedented in modern times.
  • The stock market is on track to have the worst December on record since 1931 and the Great Depression.  The reasons are varied but include the uncertainty created by Mr. Trump and his impulsive policy decisions, especially regarding trade and tariffs.

These are only the quick highlights.  And only one week’s worth of news is listed here.  In “normal” times this much activity in a month would be noteworthy.

Much of this will play out over the next few weeks and months.  I am sure we will all have plenty to say about it as events unfold.  Right now I want to emphasize what much of this means to us with respect to national security and foreign affairs.

Mr. Trump campaigned on an “America First” agenda.  Nice slogan.  As has been pointed out by many, this was also the slogan of the fascist leaning, isolationist wing of American politicians in the 1930s that refused to oppose the rise of Hitler and Mussolini.  I am not hinting that Mr. Trump is a fascist sympathizer, I am merely pointing out that there are historical roots to the thoughts, and policies he espouses.

Given Mr. Trump’s use of hyperbole in everything that he does, many thought that “America First” was just a catchy phrase that he liked.  What is becoming increasingly clear is that the words are more than a slogan.  He believes them in the sense that it governs his views on trade, national security, military action and our role in the world.  It is reflected in his decisions (against nearly unanimous caution not to do so) to withdraw from Syria and Afghanistan, his decisions to impose tariffs, and his desire to build a wall on the southern border.  It is an entirely isolationist, transactional way of thinking.  In this way of thinking we do not help or stand by allies unless there is something tangible in it for us — in Mr. Trump’s view, money.

This way of thinking is dangerous — to the interests of the United States and to peace and stability in the world.  It cedes the playing field to Russia and China who are more than happy to fill the void.

Re-read Secretary Mattis’ resignation letter. He resigned because of those “America First” policies.  This is what he is not so subtly saying.  Mr. Trump is a danger to all that we as a country have held dear for over 70 years and a danger to the influence and power for good that the world used to count upon from the good old U.S. of A. Not anymore.

Expect it to get worse as Mr. Trump has systematically removed all of those in his administration that were not afraid to tell him “no” and stood against his misguided plans.  The president acts impulsively and erratically and it seems that with two years of data, we now know that his instincts are either no good, or his knowledge of the world is sorely inadequate.

We are fast approaching a time where the United States government is run like the Trump Organization.  It will be in the hands of Mr. Trump, his daughter and son-in-law.  Period.

Likewise, the world — our friends and allies as well as our enemies — now know that the president is weak and ill-informed.  The decision to leave Syria proves it to them.  The icing on the cake was his decision to cave to the whining from hard-core right-wing pundits on television calling him out on not shutting down the government over his wall.  It makes Mr. Trump look scared of losing his base and gives power to the likes of Ann Coulter, Laura Ingraham and Rush Limbaugh.  Along with Sean Hannity, those apparently are his real cabinet.

On the other hand, this is a season of great joy!  Celebrate with friends and family.  Remember that we are all God’s children and enjoy the gift of life.  For a few days, we can put aside the worries of the secular world and revel in the power of the spiritual world.

Best wishes to all.


The Dark Days to Come

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 third 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!

 

 


While You Were Tweeting

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.


Not Just “Something”

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.

 


It Just Will Not Stop

Just when one thinks that just about everything that could happen under the Trump Administration has already occurred — it can’t possibly get any crazier, but it does.  Last week was chock full of newsworthy items, any one of which would have been worthy of discussion but they just kept coming and coming. Over the last week or so, we’ve seen proof that President Trump still does not understand the dignity and impact of the presidency.

To quickly cover a few of the highlights before getting to the main event — health care bills — let’s do a tour d’ horizon.  Two venerable institutions, the Boy Scouts of America and Police Departments across the country, had to issue apologies and “clarifications” following President Trump’s speeches to the annual Boy Scout Jamboree in West Virginia and to a Long Island New York police department.

In the former he gave a political speech that was short on inspiration to America’s youth and long on past grievances, politics, and a reminder of how personally great everything Trump is and will be. Some parents threatened to pull their kids from the Scouts.  President Trump supporters opined that the “kids loved it” forgetting that they are boys and teens and that when you get 40,000 kids together in one place, especially mostly boys, they will laugh and cheer at just about anything, especially if flatulence is involved. On Long Island the president seemed to say that police brutality when arresting suspects was okay.  As usual, whenever called out on similar pronouncements, it was proposed that it was a “joke.” Police departments around the country could only cringe and issue statements that such statements were no joking matter and that their (fill in the city) police department does not condone such action.

Within days of President Trump announcing the new White House Communications Director Anthony Scaramucci, aka “The Mooch”, aka “Mini-me” Mr. Scaramucci went on a rant to a New Yorker Magazine reporter that disparaged key senior members of the White House staff and included numerous references, in full graphic detail, to acts of biology that to my knowledge are impossible.  No comment from the president at the time.  Others in the Administration opined that he’s just a “New Yorker” and apparently that’s how New Yorkers talk about co-workers.  Having lived for a number of years in New York state I don’t recall anyone talking that way and certainly not in the name of the President of the United States.

In Tweets (Tweets!) the president continues to disparage his own Attorney General and his first and for a very long time, only official supporter for president.  According to some accounts this is a prelude to cleaning out the senior levels of the Department of Justice including the Attorney General, his deputy, the Acting FBI Director, and Special Counsel Robert Mueller.  No problem there.  In another Tweet the president arbitrarily told all active duty transgender military personnel that their services were no longer required “in any capacity” because they are a burden and “disruptive.”  Suddenly somewhere around 7,000 soldiers, Marines, Sailors and airmen are in limbo and told that somehow their patriotism and willingness to defend the nation does not count.

In yet another Tweet, the president fired his chief of staff Reince Priebus.  The Tweet announced that retired Marine general and serving Secretary of Homeland Security John Kelly would be the new chief.

Whew!  A full week.

On the upside for those of us rooting for a successful and appropriate presidency there were several positive developments.  As I write this, reports are that Anthony Scaramucci was removed from his job of ten days as the Communications Director.  I have no inside information but I suspect that the new chief of staff had something to do with that as Mr. Scaramucci bragged last week that he only reported directly to the president and did not have to answer to anyone else on the staff.  My knowledge of General Kelly, although limited, would indicate that he would absolutely not tolerate antics such as those of Mr. Scaramucci.  Perhaps the General can bring order to the White House staff.  We’ll see, but a good first step.

Also positive, the Chairman of the Joint Chiefs of Staff General Joseph Dunford, USMC let it be known that the military does not act on Tweets or any other form of informal communications when a policy decision is to be made, even a Tweet by the president concerning transgender policy.  Hurrah. It remains to be seen what actual policy evolves, but it is good to know that spontaneous utterances by the president will not precipitate military action.

Further good news came out of the Congress that overwhelmingly passed a bipartisan bill strengthening sanctions primarily against Russia, but with some additional provisions against Iran and North Korea. The Congress felt it necessary after listening to, and observing the actions of, President Trump with regards to Russian President Putin and our president’s apparent fascination with him.  The White House staff had worked hard behind the scenes to stop the passage of the bill but both houses of the Congress got up on their hind legs and said “no” to the president on this issue. A positive sign that they may increasingly exercise their role in governing as an equal branch of the government.

Many Republican Senators and Representatives also went on the record along with their Democrat colleagues to oppose President Trump’s Tweet policy on transgender individuals in the military and the treatment of Attorney General Sessions.  Clear signs that the president will not get blanket support from them.  As an aside, the president now taunts Republicans as well as Democrats via Twitter seeming to make it clear that he does not consider himself a Republican.  But to most of us, that is no surprise.

And of course let’s not forget that North Korea tested new Intercontinental Ballistic Missiles (ICBMs) that experts think can reach targets on the U.S. mainland as far as Chicago.

Arguably the biggest news of the week was the failure to repeal or repeal and replace or otherwise get rid of the Affordable Care Act (ACA) lovingly known as Obamacare.  Most of us followed the news and at least heard of the ins and outs of the entire suspense filled week of “will they or won’t they?”  They did not.  One could ask why after seven years of clamoring for (and voting over 50 times for) the repeal of Obamacare the Republicans were not ready to put forward their own coherent health plan. One could also ask why the only argument put forward by most Republicans, and especially by the president, had nothing to do with the merits of the proposed replacement plan(s) but rather the only argument was that Obamacare was “bad” — nothing about why the new plan would be better.  SAD!

But be careful.

I do not think the health care battle is finished, only in a strategic pause.  There will be further efforts to repeal or repeal and replace.  For supporters of Obamacare, or supporters of a bipartisan effort to repair Obamacare and to make it better, do not relax.  The fat lady has yet to sing.

Over the weekend President Trump tweeted out (how else?) that Obamacare was going to implode and implicitly that he would make it happen.  On Sunday the Director of the Office of Management and Budget (OMB) Mick Mulvaney went on television to be explicit about the president’s threats/promises. As I have written in this space before, the president can do grave harm to the current Obamacare system, primarily through non-enforcement of the mandate and by withholding funds to subsidize premiums. He also made news by threatening the Congress and Congressional staffers with actions to increase their premiums.  I am no expert in this area, but this is what I understand is the issue.

Is it possible for the president to make Obamacare “implode” as he promises?  As with most things, the answer is “it depends” on what part of Obamacare one refers to during the discussion.  Since Obamacare remains the law of the land, the president cannot make it go away at once.  He can, however, create enough chaos in the system that it can degrade over time.  Remember that most Americans get their health insurance through their employers or through the government (military, VA, military retirees, Medicare, etc.).  For middle to low-income working adults and for children that do not have employer or government health insurance they mostly get their insurance through Medicaid or in a market place created by the ACA.  Although a major factor in the latest debates, Medicaid is provided by law and cannot be legally changed without a change to the law. What is really under discussion are the ACA market places.  Since the ACA was fully implemented, about 10 million Americans get their coverage via the government market place.  These are the people you most hear about on the news and in political rallies, be it how bad the system is or how wonderful the system is.

The administration has a number of ways to degrade the ACA.  In a slow motion effort, they could stop advertising and marketing the exchanges so that people either don’t know that the markets still exist (a lot of Americans are unsure as to what is available after all the latest hubbub) or miss deadlines to sign up because there was no public advertising as to how or when to get on board.  Additionally, if the administration follows through by not enforcing the mandate (either get insurance or pay a fine) healthy people will get out of the market which causes costs to rise for the insurers which is then passed on to those still in the market — their premiums rise — or the insurer gets out of the market because it isn’t profitable for them if they have to eat the added costs.  (Remember the three legs from my 23 June post. To work, if we want to cover pre-existing conditions, the system needs a mandate to keep the pool costs low by balancing healthy folks with those that we already know have problems, but then to be fair, we subsidize those that have to have insurance but cannot afford it.  Get anything out of whack, and the system starts to wobble — the promised “death spiral.”)

President Trump is threatening/promising to speed up the process by withholding cost sharing payments. As I write, they are only released through the end of July — today. (The next deadline is in late August.)  The ACA requires insurance companies to hold down the deductibles, co-pays and premiums for those in the individual market place. However, the insurance companies are not charitable organizations and they are in business to make money.  To make up the loss of revenue to those companies every month the government makes up the difference on the costs — currently about $600 million a month.  Should the Trump administration stop paying those subsidies, premiums for those on the market place would sky-rocket or the insurers would just pull out of the market.  This is a lot of what you hear about when those that oppose the ACA say it is “collapsing.”  Health care and health insurance is not “collapsing” for most Americans, but it could for those middle to low-income Americans that are on the individual markets should the president follow through and try to cause the ACA to “implode”.

He claims the Democrats will “own it” and he will take no blame.  I think he is fooling himself if he takes deliberate action to make it tough on the citizens he swore to protect.

There is one more esoteric wrinkle in the president’s threats that you may hear more about this week. Mr. Mulvaney explained the issue and says that the president is serious about implementing it.  This involves the health insurance for members of Congress and their staffs.  Despite rumors to the contrary, by law the entire Congress and their staffs are on the ACA — they get their insurance from Obamacare. But with a wrinkle.  President Obama’s administration put out a policy that allowed them to treat each individual office of each Senator and Representative each as a small business.  This means that they are eligible for the subsidies just talked about above, saving them lots of money out of their own pockets. Before setting our hair on fire, take a minute to think about it.  Certainly the individual Senators and Representatives could afford to pay full price in an employer plan, but most staffers, interns, administrative personnel, etc. working in their offices are young folks not making much money.  It would have a huge impact on them should President Trump change the policy to exclude them from the subsidy program.

Today is the start of a new week.  Let’s hope it is a dull one.  We need to take a collective deep breath and take a few minutes to enjoy the summer.  And summers in official Washington D.C. are supposed to be dull.  Nothing going on.  If so, hold on to your hats come September.


That Was The Week That Was

Some of us of a certain age can remember the 60’s political satire show “That Was The Week That Was”, or TWTWTW, or simply TW3.  The show launched the American career of the British television host David Frost who went on to do many serious interviews including the definitive series of interviews with former president Richard Nixon.  But in the beginning, think of TW3 as an early, ensemble cast version of the “Daily Show.”  I can only imagine what fun they would have had with this week’s news out of Washington D.C.  Actually, it is hard to keep up with the news from the last 72 hours, but I will try to hit some of the highlights.

First, on the Russian front.  No, not that news, but rather the news that President Trump decided to withdraw the U.S. from a CIA program to provide training and equipment to Anti-Assad forces in Syria. One could argue whether that secret program — different from the American involvement in Syria fighting ISIS — was effective or not, but it was relatively low-cost and showed U.S. support for freedom fighters in Syria.  By pulling the rug out from under them, it seriously undermines confidence in U.S. commitments in the Middle East. Oh, by the way, the Russians’ number one request from the U.S. was to withdraw support from those forces.  They have been demanding it for years.  And now the U.S. has given in to the demand in exchange for, for, well apparently for nothing.  A significant bargaining chip for the U.S. in its relations with Russia (and a symbol of our desire for Bashar al-Assad to go away) is now off the table.  Not sure how or why because the Trump administration doesn’t want to talk about it.

In an extraordinary (in every sense of the word) interview with the New York Times President Trump talked about everything from the healthcare bill, to the French Bastille Day celebration, to Napoleon, to Hitler to NATO and many more topics (you can’t make this stuff up).  In total, a bit disconcerting when it is all put together.  Reading the transcript is actually frightening as it shows that the president thinks that the entire federal government is his personal staff — that they owe allegiance to him first, foremost and only, rather than to the American people and the Constitution.  It cements in my mind that he has no real understanding of what it actually means to be president of the entire United States. It is particularly disconcerting when he speaks about the Department of Justice (DOJ), the Federal Bureau of Investigation (FBI) and the senior leaders in both.  By name and with apparent malice of forethought he disparaged Attorney General Jeff Sessions, Deputy Attorney General Rod Rosenstein, Acting FBI Director Andrew McCabe, and Special Prosecutor Robert Mueller.  For one example, how would you interpret what he said about Attorney General Sessions?

TRUMP: Well, Sessions should have never recused himself, and if he was going to recuse himself, he should have told me before he took the job, and I would have picked somebody else.

HABERMAN {NY Times}: He gave you no heads up at all, in any sense?

TRUMP: Zero. So Jeff Sessions takes the job, gets into the job, recuses himself. I then have — which, frankly, I think is very unfair to the president. How do you take a job and then recuse yourself? If he would have recused himself before the job, I would have said, “Thanks, Jeff, but I can’t, you know, I’m not going to take you.” It’s extremely unfair, and that’s a mild word, to the president. So he recuses himself. I then end up with a second man, who’s a deputy.

To me two things jump out.  First, in the best case scenario, the president does not understand the role of the DOJ and that those attorneys do not work for him as Mr. Trump.  They work for the American people and need to have a loyalty to the Constitution rather than to an individual in the White House. Mr. Trump always insisted on loyalty from employees and so it appears President Trump insists on loyalty to him from his “employees.”  A second more sinister interpretation would be that President Trump would not have nominated Mr. Sessions if he knew that the Attorney General was not going to keep any investigation into the Russian interference in the election and possible Trump campaign involvement in it from gaining any traction.  Apparently, he expected the Attorney General to keep things under control and away from the president and his family.  Otherwise, why appoint him?  Read it for yourself, but if you look closely, you will see that he is castigating Mr. Sessions for doing the right and honorable thing.  There are now reports from multiple sources revealing that President Trump is reviewing his options on pardoning friends, family, and himself.  Very Nixonian.  Take a look at these three quotes and guess which are which from President Trump and President Nixon.

“When the president does it, that means it is not illegal.”

“When you’re a star, they let you do it.  You can do anything.”

“The law’s totally on my side.  The president can’t have a conflict of interest.”

The first one is from President Nixon, the other two from President Trump.

The biggest issue of the last few days is healthcare.  What the House and the Senate decide, or don’t, in the coming days and weeks will have an impact on millions of people and on billions of dollars in our economy.  It should not be something that is just pushed through for the sake of “getting something done” alone.  I agree that the Congress should get something done — so far not much of substance has gained escape velocity from Capital Hill — but something this big should be carefully considered. Kudos to Senator Susan Collins (R-Maine), Senator Lisa Murkowski (R-Alaska) and other Republican Senators that examined the proposed bill and found it woefully wanting.

Claims that Trumpcare is dead are, however, exceedingly premature.  Likewise reports of the death of Obamacare are premature.  But the president can murder Obamacare if he wants to, and there is some indication that he wants to do so.  By withholding subsidies for insurance premiums, which he says he may do, and by not enforcing the mandate, which is already the case, the president can make portions of Obamacare collapse — not the whole thing, but parts.  Claims that he “doesn’t own it” will not hold.  If he actively undermines the law, people that lose it will notice.  Bad policy.  Hopefully some of his advisers and others in Congress will convince him not to take that path.

The Senate will vote on something next week, but even the Senators themselves do not know what that will be.  Not good news. Currently there are at least two basic versions of “repeal and replace” legislation, with the possibility that those two bills will change before voting occurs, and one version of “repeal and replace later” with the possibility that one will also change.  It is surprising and disconcerting that a vote will be held early next week, with wide-ranging consequences on real people’s lives, not just in theory, and no one yet knows what will be up for a vote.

Dare I hope?

Here is what I hope for.  There are definite signs that moderate Republicans and Democrats are making the early moves to work for a bipartisan bill to “repair” the flaws in the Affordable Care Act (ACA), aka Obamacare.  Flaws do exist.  But there is no reason to get rid of the entire program — assuming one believes that health care should be affordable and available to all as I wrote about in my 23 June post. To be realistic, no Democrat will budge until the word “repeal” gets buried.  They also won’t support anything called Trumpcare.  Conservative Republicans such as Senator Rand Paul (R-Ky) won’t support anything that does not completely repeal the ACA “root and limb.”  But I hope that enough good folks, willing to put country above party, still exist in the Senate in both parties and that cooler heads will prevail.  If that happens, it could be the beginning of a wonderful relationship.  Getting something as tough as health care tackled on a bi-partisan basis would go a long way in having Republicans and Democrats getting back together to tackle other long-standing problems.  What a concept. I am always told how naive I am, but I hope that we have a break through on this issue and that it leads to accomplishments in many more areas.

Finally, and I leave it here despite many more developments of the last 72 hours, speaking of putting country above party I have always had the deepest respect for Senator John McCain (R-Ariz).  That doesn’t mean I always agreed with him but I always thought he was trying to do what he thought best for the nation and its people.  As you know, he is battling a particularly nasty form of brain cancer. I hope that he is back on his feet and back to the Senate before too long.  There are not many like him left in today’s Senate chamber.