Nel's New Day

December 21, 2017

Disastrous Tax Bill Leads to GOP Fractures over Spending Bill

In their contempt for democracy, the Republicans, the epitome of “makers” exploiting the so-called “takers,” passed their social reform bill in the dead of night to benefit large businesses and wealthy people. The process, carried out in great haste with extreme chaos and negligence, allowed for neither hearings nor debate—not even the opportunity for congressional members to examine the 1,097 pages. If one considers democracy, the way that Republicans passed the bill may be even worse than the contents. If the tax bill were a good deal for most of the people in the U.S., Republicans wouldn’t have to lie about it. Dictator Donald Trump (DDT) summarized the GOP position when he said, “It’s always fun when you win” about his defeat of the people who voted for him. “Fun” also means that he gained billions of dollars from the tax bill.

“Fun” for DDT also means destroying Puerto Rico. The tax bill requires the federal government to treat the territory in the same way that it treats foreign countries in bringing operations and jobs to the U.S. from overseas. Forty-seven percent of PR’s GDP comes from manufacturing, primarily pharmaceuticals and medical devices generating revenue from patented drugs and technologies. The 12.5 percent tax levied against profits in PR for “intangible assets” of U.S. companies abroad plus a minimum of ten percent tax on their profits abroad, as in foreign countries, means that businesses will pay more to operate in PR than on the U.S. mainland. It will cost U.S. citizens their jobs and destroy PR’s economy after DDT went to the island to complain about the cost of recovery from Hurricane Maria, something he did not do at any of the summer’s disasters on the mainland.

DDT may not have his “fun” of signing the bill until January 3 because he is afraid to let the 2010 “pay-as-you-go” law automatically cut Medicare and other programs. These would take effect in 2018 if he signed it in 2017. To avoid bad press, he is hoping that Congress will waive these cuts by 2019. Spending caps went into effect under a GOP-created law in 2011 and have received two two-year waivers–also from the GOP. The most recent one expired on October 1, 2017, and Republicans didn’t get around to lifting it again.

To pass the waiver, the GOP needs Democrats who are raw from the GOP pushing through the tax bill and plan to negotiate for restoration of the health-insurance mandate, due to expire in 2019. The schedule is not set, but Congress will most likely not pass this bill by the end of this week while they struggle with other expiring laws, like the spending bill that keeps the government from shutting down.

One vote to transfer the Great Society into Ayn Rand’s idea of plutocracy came from Sen. Susan Collins (R-ME) who earlier gained the support of her constituents when she refused to vote for an earlier bill because it would drive at least 13 million people off health insurance. The new bill does the same thing, but she claimed that her vote was okay because Congress would shore health insurance markets and undo Medicare cuts guaranteed by the tax bill that she supported with her vote. Even after House Speaker Paul Ryan (R-WI) said that the House wouldn’t support the deal, she voted for the tax bill. And Senate Majority Leader Mitch McConnell (R-KY), who made the promise to Collins, is not known for truthfulness. Collins decried media coverage as “unbelievably sexist” because it describes her as being “duped.” She may have to eat her words after discovering that’s exactly what happened.

After the beautiful togetherness and self-backslapping of GOP leaders following the tax bill’s passage, Republicans are back to fighting over the spending bill that must be passed in two days to avoid a government shutdown. Rep. Mark Walker (R-NC) described the altercation following the joint communion for the tax bill:

“It’s kind of like leaving the hospital, just finding out you’re cancer free, and getting run over by a Mack truck.”

Ryan already refused to allow Collins’ funding for the Affordable Care Act in this year’s spending package. Gone—at least temporarily—is the agreement for legislation to reduce health care premiums for nine million people without government subsidies. House Republicans refuse to address Collins’ proposal to continue the health care subsidies without attaching Hyde Amendment language prohibiting the use of federal funds for abortion. Democrats oppose this demand because it expands the existing amendment by discouraging private insurers from covering abortions. Insurers must keep funds for insurer subsidies separate from abortion services, but Republicans want more. Many Republicans are totally against the ACA, and abortion makes a good excuse to block Collins’ proposal. Collins and Sen. Lamar Alexander (R-TN) have withdrawn their bill for these subsidies until next year’s full spending bill.

The stopgap also fails to address funding for the Children’s Health Insurance Program (CHIP) reauthorization and funding for Community Health Centers. Without CHIP, nine million children lose their health insurance, even those in the middle of such serious problems as cancer treatment.

In the Senate, at least eight Democrats or independents must support all Republicans for a stopgap measure to overcome a filibuster. Without a stopgap measure, the federal government shuts down at midnight Friday. GOP leaders want a bill that expires on January 19, 2018 to stop the shutdown. They call is the “CRomnibus” proposal, but House Minority Leader Nancy Pelosi (D-CA) has other names for it:

“Some people are calling it the ‘punt’-ibus, just punt this down the road. I call it the ‘none’-tibus because it’s not going anywhere.”

The GOP House leadership had trouble with its representatives from large blue states because the tax bill penalized their residents disproportionately by reducing deductions for state property and income taxes. Now GOP representatives from Texas and Florida are opposing a bill without the $81 billion disaster bill. Lawmakers in states badly hit by hurricanes vow to stay in Washington until they get their disaster funding. Conservatives object because the disaster relief isn’t paid for by cuts in other parts of the budget, a scenario that takes everyone back to the fight over funding after Superstorm Sandy in the Northeast. Democrats in the Senate oppose the disaster bill because, according to the Minority Leader Chuck Schumer (D-NY) “still does not treat Puerto Rico, California and the U.S. Virgin Islands as well as Florida and Texas.”

In another contentious issue, the GOP had planned to take a separate vote tomorrow to reauthorize Section 702 spying powers under the Foreign Intelligence Surveillance Act for three weeks. After opposition from the Freedom Caucus today, that plan was dropped. Schumer agreed, saying that they need a clean spending bill:

“We cannot do a short-term funding bill that picks and chooses what problems to solve. We have to do them all together, instead of in a piecemeal fashion. It has to be a truly global deal. We can’t leave any of those issues behind.”

The Republicans claim that they can’t shut down the government because it would ruin their win with the tax bill. They have 48 hours pass a bill in the House, send it to the Senate who might make changes if they pass it and then send it back to the House who will then have to agree. That’s before the bill gets sent to the president for signing. The 2880 minutes are ticking away.

December 15, 2017

The Tax Bill Would Destroy Our Nation’s Future

Filed under: Legislation — trp2011 @ 11:13 PM
Tags: , , ,

The new tax bill, approved by a joint Senate/House committee in both congressional chambers, is ready for votes in both chambers this coming week with no experts testifying and no Democratic support.

Benefits for corporations: The permanent drop to 21 percent—40 percent of the rate during the 1950s—saves them $1 trillion in a decade. Corporations have not indicated any desire to invest these savings in the economy. Foreign income by U.S. companies would be tax-free. These cuts are permanent; those for individuals expire in nine years. Corporate cuts disproportionately help the wealthy because they are the share-holders.

Benefits for the wealthy: The highest tax rate for married couples making over $470,000 has been dropped 2.6 percent to 37 percent although DDT had said the bill would not cut taxes on the rich. DDT had said that his wealthy friends were complaining. Overall, 47.5 percent of taxpayers have an average increase of $150 in taxes, and 31.3 percent may get a reduction with an average of $1,500. This doesn’t reflect the cost of health insurance premiums.

Cuts for tax deductions: Only $10,000 in state, local, and property taxes can be deducted on federal income taxes, causing property values to fall in high-tax cities and leaving less money for public schools and infrastructure. The bill also prohibits taxpayers from prepaying next year’s state and local income or property taxes to prevent people from deducting them from 2018 taxes.

Increase in insurance premiums: The disappearance of an individual healthcare mandate will cause premiums for people not on the Affordable Care Act to rise and 13 million more people to be without health insurance in a decade. The elimination of the mandate doesn’t occur until 2019.

No estate tax under $22 million: Currently heirs don’t pay estate taxes under $11 million for married couples, but the new tax doubles that amount.

A 20-percent reduction for “pass through” companies: In S corporations, LLCs, partnerships, and sole proprietorships, income is “passed through” to the business owner’s individual tax return. The new bill invites a plethora of sham businesses for salaries to allow people to deduct 20-percent of their income up to $315,000 tax-free.

Drop in AMT (alternative minimum tax) for individuals: The tax began in 1969 to keep wealthy families from lowering their tax bill to almost nothing through credits and loopholes. The AMT level had not been changed, and couples earning over $84,500 may end of paying the AMT. The proposed threshold is $500,000.

No corporate AMT tax: This tax has kept corporate taxes close to 21 percent.

Drop in mortgage interest deduction: This deduction would be reduced from up to $1 million in mortgage loans to a cap of $750,000 for new loans.

Business perks: Additional tax relief for owners of engineering and architectural firms and the elimination of any change in capital gains treatment of home sales are among appeasements to business lobbyists and congressional champions.

Items left in place: The student loan deduction, the medical expense deduction, and the graduate student tuition waivers; retirement accounts such as 401(k) plans;

Churches, synagogues, mosques and other nonprofits (the Johnson Amendment stays in place) can’t get political and endorse candidates in elections or collect money for them with undisclosed donations.

Sen. Bob Corker (R-TN), who promised he would not vote for any bill that raised one penny of the national debt, is now in favor of a bill that increases the debt at least $1 trillion dollars (100 trillion pennies). Sen. Susan Collins (R-ME), who was earlier opposed to dropping off health insurance, seems fine with the bill predicted to do that to 13 million people. Sen. Jeff Flake (R-AZ), who caved on the last bill because he was promised that he could stay in a room where DACA might be discussed, is expressing doubt, but he can be expected to give in. Sen. Ron Johnson (R-WI) who voted against an earlier bill because he didn’t get enough money for his own business in Wisconsin must have gotten the money because he stated that the probably non-existent “economic growth” will be the way that “most Americans benefit from this tax reform.” Sen. Marco Rubio (R-FL) now approves after the new bill slightly expands a child tax refundable credit by $300 from $1,100. The child tax credit, doubling to $2,000, would phase out at $400,000 in earnings for married couples, up from the current $110,000.

Over 30 years ago, the 1986 tax reform bill may have dropped the corporate tax rate to 34 percent, but the reduction was covered by eliminating or reducing business tax breaks. Congressional sentiment was to have fewer tax loopholes and shelters for the rich to avoid an increase in the deficit. The capital gains increased from 20 percent to 28 percent because of the bipartisan belief that these taxes should be at least commensurate with ordinary income for workers. Not ideal, but far superior to the today’s GOP view of tax “reform” of giving money to rich individuals and businesses, taking from the poor, and driving up the deficit with the goal of eliminating earned benefits such as Medicare and Social Security.

The tax bill is like an oil spill: it will keep oozing bad news. Egregious pieces of the Senate bill may remain such as a tax exemption for cruise ships that dock in Alaska, a favor for Sen. Dan Sullivan; allowing luxury car dealerships to deduct interest on loans to showrooms for Sen. Rand Paul (R-KY); and a tax deduction for $10,000 of private school tuition.  A deduction for domestic manufacturing is gone, encouraging companies to move offshore. Fossil fuel drilling in Alaska’s Arctic National Wildlife Refuge stays.

Republicans have had enough time to play with their largely disliked tax scam bill, but they ignored CHIP (Children’s Health Insurance Program), insurance for 9 million poor children, that expired at the end of September. GOP leaders such as Sen. Orrin Hatch (UT) have sneered at people who need this insurance because they don’t work hard enough. Because of their indifference, young people won’t play basketball or join a dance team because they can’t afford an annual physical. Thousands more won’t have access to dialysis, surgery, or chemotherapy because the GOP believes that these children don’t deserve help. Meanwhile, they’re putting the same children into debt with a bill that gives money to the wealthy.

If the GOP wants to put the nation into debt by $1.5 trillion, they could stop child poverty, as Rachel West explains:

“According to the U.S. Census Bureau, the 5.7 million poor families with children would need an average of $11,400 more to live above the poverty line in 2016. In total, the income needed to boost these families—along with the additional 105,000 children who were not living with their families—above the federal poverty level is about $69.4 billion per year in today’s dollars. Over ten years, that adds up to about 46 percent of what Congress plans to spend on its tax plan. There would be so much money left over after we boosted these kids out of poverty that the United States could also pay tuition and fees for all of them to get an in-state education at a four-year public university, and it still wouldn’t costs as much as the tax plan. If Congress wanted to really let loose, and spend just 12 percent more than the tax bill does—for a total of $1.74 trillion—we could completely eliminate all poverty in America.”

Using the $1.5 trillion in this way would give a real boost to the economy. People could afford to buy things that other people would need to manufacture; people could buy services that would create more jobs. With all these jobs, the taxes would vastly increase in an upwardly spiral movement instead giving businesses the opportunity to take their $1 trillion out of the country.

Giving almost $1.5 trillion to the wealthy and businesses also takes away any chance for fixing the crumbling infrastructure throughout the United States. The bill gives no opportunity to repair highways, bridges, airports, railways, water and sewage plants, electrical grids—the list has grown more and more as taxes dropped in the last half century. Now the Republicans expect states to fix all the infrastructure form their meager state budgets, already weakened by increasing federal demands on them.

In the Washington Post, Fareed Zakaria wrote about the bill if it passes:

“The medium- and long-term effects of the plan will be a massive drop in public investment, which will come on the heels of decades of declining spending (as a percentage of gross domestic product) on infrastructure, scientific research, skills training and core government agencies. The United States can’t coast on past investments forever….

“United States has almost 56,000 bridges with structural problems (about 1,900 of which are on interstate highways), and these are crossed 185 million times a day….

“In 1977 the federal government provided 63 percent of the country’s total investment in water infrastructure, but only 9 percent by 2014. There’s so much congestion in America’s largest rail hub, Chicago, that it takes longer for a freight train to pass through the city than it takes to get from there to Los Angeles.”

The GOP tax bill would provide more of the same—more money for the wealthy taken from everyone else–and destroy any opportunity for a brighter future.

November 27, 2017

December – GOP Breaking Point

Filed under: Legislation — trp2011 @ 11:23 PM
Tags: , , , , , , , ,

With 15 days of work left before their holiday hiatus at the end of December, Congress may face a far more difficult task than in September unless they shuffle everything down the pike, as they did two months ago. Dictator Donald Trump (DDT) and the Republicans have more than a full plate for its few working days.

Government shutdown: The lights in the government go off on December 8 without further action on the spending bill. Spending caps cause trouble for this bill, so House Speaker Paul Ryan (R-WI) may float another short-term bill, something that the Republicans lambasted Democrats for doing before the GOP was in power. The 2011 Budget Control Act set 2018 caps which will automatically go into effect in January without a deal to raise them. No legislation has been written, and the Senate needs at least 60 votes, meaning at least eight Democrats.

Without a change in the law, defense programs get only $549 billion, and nondefense programs are limited to $516. DDT and the GOP haws want over $600 billion for defense, and Democrats want the same increase in nondefense spending.

CHIP: The Children’s Health Insurance Program for nine million children and 370,000 pregnant women in poverty expired at the end of September, and funding may end up in the December spending bill. The program is running out of money for the first time since it was created two decades ago.  The expenditure of $15 billion for CHIP is vital for preventative health care, but families are already receiving notice that their children can no longer have this coverage.

DACA: The deadline for the Deferred Action for Childhood Arrivals program, allowing some undocumented immigrants brought into the country as children to work and attend school without fear of deportation, isn’t until March, but Democrats may force the issue as part of the spending bill.

Tax cuts: At least 50 GOP senators must sign off on a bill that increasingly gouges people the poorer they are. Then the bill has to go to the House which either signs off on it or creates its own version and then sends it back to the Senate for approval. At least eight GOP senators don’t like the bill, each for his own reason, but they may end up caving in because donors are insisting that the GOP Congress do SOMETHING! Sen. Rand Paul (R-KY) wants to repeal with healthcare individual mandate, and Sens. Susan Collins (R-ME) and Jerry Moran (R-KS) oppose that part of it because the loss of the mandate may destabilize health care markets. Sen. Ron Johnson (R-WI) refuses to vote in favor of the bill unless he gets more perks for his personal small business. Sens. Bob Corker (R-TN) and Jeff Flake (R-AZ) are leading the charge in opposing the $1.5 trillion increase in the deficit.

To keep the vote for tax cuts to a simple majority, the increase in deficit can be no more than $1.5 billion. As senators consider tweaks to keep some of the reluctant GOP senators in line, the deficit goes up, requiring that other cuts be made. One suggestion is to just eliminate all the cuts for individuals—not businesses—in the bill’s final year.

The popularity of the tax cut bill is going down and may shrink even more with the Congressional Budget Office report that poor people are hurt even worse than previously thought. People making less than $30,000 a year could be worse off by 2019, and those earning $40,000 will be losers by 2021. By 2027, most people earning less than $75,000 are worse off. In addition, the increase in health insurance premiums will take four million people off any plans by 2019 and 13 million by 2027. The rest of the people, 38 percent of the population, will keep getting tax cuts. The chart below indicates the amount that the government will reap from different salary groups—for example, the group of people making under $10,000 will pay an additional $1,540,000,000 whereas those making over $1 million a year will gain $34,100,000,000. The negative sign before the amount means less revenue for the government and shows that the poor pay for the rich.

FISA: Without a bill, this surveillance program expires at the end of the year, but bipartisan opposition to a “clean” renewal of warrantless spying comes from those who believe in privacy. At this time, Section 702 of the Foreign Intelligence Surveillance Act permits the government to collect emails and texts from foreign spies, terrorists, and other overseas foreign targets without warrants. Proposals have been cleared by the House Judiciary Committee and Senate Intelligence Committee, but neither has gone to a floor vote. The conservative House Freedom Caucus has pledged opposition because it violates the Fourth Amendment.

Flood Insurance: The House has passed its version of reauthorizing the National Flood Insurance Program, renewing it for five years, updating federal flood mapping requirements, and bolstering a new private flood insurance market. The Senate, however, has made no plans to address the House bill. The NFIP is $25 billion in debt.

Emergency disaster aid: The $44 billion package for Texas, Florida, Puerto Rico, and the U.S. Virgin Islands is too small, according to some Republicans from Texas, although it’s added to another $50 billion. Conservatives will demand that cuts elsewhere pay for the $44 billion. The budget from DDT goes only to these places for hurricane relief; DDT has offered not one cent to the Western states ravaged by wildfires.

Iran: The 60-day deadline after DDT’s October statement that the nation is not in compliance with the agreement comes in December. Leading Republican senators want to keep the deal but pass legislation to keep Iran from developing nuclear weapons after the deal expires. DDT will need to waive sanctions to keep the nuclear pact intact.

All these decisions are set against the background of ethics proceedings for continuing sexual assault and harassment accusations and a December 12 election to determine whether Roy Moore joins the Senate. Rep. Al Green (D-TX) has promised to force a vote to impeach DDT before the end of 2017.

In The New Yorker, Ryan Lizza writes that December is the make or break time for DDT:

“Year one is when Presidents usually make their mark[.] By the second year, a President’s legislative agenda becomes complicated by the hesitancy of members of Congress to take risky votes as midterm elections approach, particularly if a President is unpopular. The math is stark: on average, modern Presidents have historically lost thirty House seats and four Senate seats in their first midterm elections. Trump’s first year has been different. He has a record low approval rating. He is mired in scandal. [And] he looks like a President in his eighth year rather than one in his first. … He is unique among modern Presidents in that he has no significant legislative accomplishments to show for ten months after taking office.”

What’s missing from this list of must-dos? Restricting bump stocks or closing the domestic violence loopholes in the gun laws.

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