Category Archives: Economy

Ted Cruz warns of “Watergate-style blowout” in 2018

Wealthy conservative donors and influential Republican lawmakers say they increasingly fear a historic backlash at the ballot box next year if the GOP effort to pass a sweeping rewrite of the nation’s tax laws falls short in the coming months.

Image: Dia Dipasupil/Getty Images for Lincoln Center

At a two-day midtown Manhattan summit of the billionaire industrialist Koch brothers’ powerful donor network, GOP patrons, senators and strategists spoke in cataclysmic terms about the price they expect to pay in the midterm elections if their tax reform effort does not win passage.

They voiced concerns a demoralized Republican base would stay home, financiers would stop writing campaign donation checks to incumbents and the congressional majorities the party has built in the House and Senate could evaporate overnight.

To head that off, the same Republicans said they are waging an intense, multi-front effort in and outside of Congress and the White House to shepherd the endeavor to the finish line.

Koch network officials said they have invested more than $10 million this year in advocating for the GOP tax plan.

Art Pope, a major conservative donor from North Carolina, put it this way: “When you have lack of success, that may depress voter turnout for Republicans, that may depress donations for Republicans and conservatives.”

Sen. Ted Cruz (R-Tex.) warned that Republicans could face a “Watergate-level blowout” in the midterm elections if they don’t make major legislative strides on taxes and health care, invoking the political scandal that brought down Richard Nixon’s presidency and set back the GOP considerably in subsequent elections.

“If tax reform crashes and burns, if [on] Obamacare, nothing happens, we could face a bloodbath,” said Cruz, who spoke in a moderated discussion.

More from Apple news via WaPo

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6 critical ways Trump slashing Obamacare subsidies could impact you

President Trump’s promised rollback of Obamacare has officially begun. But what does it all mean? And will it affect you?

The federal government will cut billions of dollars in health-care subsidies to low-income households that were introduced under Barack Obama’s Affordable Care Act, the White House announced last week.

These $7 billion in “cost-sharing subsidies” are the payments the government makes to health insurance companies to offset the discounts on co-payments that low-income consumers have received under Obamacare. The subsidies repay health insurers for the higher cost of the “silver plan” through HealthCare.gov — the individual insurance marketplace operated by the federal government and set up under Barack Obama.

The cuts in subsidies may actually hit the middle class the most

Insurers already put insurance premiums up 20% this year in anticipation of the President’s decision to end these subsidies. However, in several states, including Indiana, insurance companies spread their rate increases, so middle-class people on individual plans will likely see a double-digit increase in their premiums next year.

“People who don’t qualify for premium subsidies for cost-sharing reductions, but are also in the individual market because they don’t have employer-sponsored coverage — early retirees who aren’t yet eligible for Medicare or higher-earning freelancers — will be negatively affected by higher premium costs,” Susan Nash, partner at Winston & Strawn LLP in Chicago, Ill.

More from CBS Marketwatch

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US House panel approves $10bn for Mexico border wall

US House panel approves $10bn for Mexico border wall © Jorge Duenes / Reuters

The Border Security for America Act, proposed by Chairman of the the House Homeland Security Committee Michael McCaul (R-Texas), was approved by the committee in an 18-12 vote along party lines Wednesday.

The bill would authorize $10 billion for construction of the border wall, and another $5 billion to improve ports of entry. The bill would also add 5,000 Border Patrol agents and 5,000 Customs and Border Patrol (CBP) officers.

“We have been talking about border security for many years. Now that we finally have a partner in the White House who has prioritized this issue, it’s time for Congress to do its part and get the job done,” McCaul said in a statement.

The American people demand and deserve secure borders. @HouseHomeland is marking up my bill today that will deliver and .

In addition, the bill would authorize the federal government to reimburse states up to $35 million to use the National Guard in support of border security. Federal agents also would be prohibited from restricting CBP activities on federal land within 100 miles of the border. The bill would also create a Biometric Entry-Exit System at all air, land, and sea ports of entry to identify immigrants who overstay their visas.

 

There are currently 68 Republican co-sponsors in the House and a number of law enforcement and border organizations have endorsed the bill.

The Border Trade Alliance said that the bill “wisely seeks to ensure that our international borders with Canada and Mexico have the personnel necessary to process legitimate cross-border trade and travel securely and efficiently.”

The Federal Law Enforcement Officers Association said that the legislation “makes improvements to our border security through strengthening physical structures, updating administrative processing, employing state of the art technology, expanding surveillance, and adding to enforcement personnel.”

Democrats, however, strongly oppose the border wall and many see this bill as a political move by Republicans to appease President Donald Trump, who made constructing the wall a major campaign promise.

“To waste this money on basically a campaign promise is pretty disgusting,” said Rep. Nannette Barragan (D-California), a committee member, according to The Hill.

It’s disgusting to watch @GOP push Trump’s wall of hate in Homeland Committee today. What a waste of $15 billion of American taxpayers $$ https://twitter.com/HomelandDems/status/915583256174751745 

Democrats are also concerned that the bill will be attached to legislation that would turn the rescinded Deferred Action for Childhood Arrivals (DACA) program.

After Republicans met with Trump at the White House on Monday, Senator Tom Cotton (R-Arkansas) said that “the president was very clear” on what he wants from Congress on DACA.

Cotton said that any efforts to codify DACA “ought to include some kind of enhanced measures, whether it’s on the border or interior enforcement or what have you.”

denies Schumer and Pelosi claim that agreed to DACA deal excl. wall funds http://on.rt.com/8n5t 

Photo published for Off the wall: Trump denies agreeing to DACA deal, despite Democrats' claim — RT America

Off the wall: Trump denies agreeing to DACA deal, despite Democrats’ claim — RT America

US President Donald Trump has denied reaching a deal which would see young immigrants protected from deportation without his proposed border wall as a condition. It comes despite a claim to the…

rt.com

Rep. Filemon Vela (D-Texas), Ranking Member of the Border and Maritime Subcommittee, proposed several amendments to the bill, including withholding funds from the border wall until the Mexican government agrees to reimburse the US for the costs as well as an amendment that would prohibit the federal US government from seizing private property along the border “without truly providing just compensation to property owners.”

“Put simply, the legislation under consideration today is an offensive joke and a fiscally irresponsible mess,” Vela said in a statement. “It insults border communities, threatens private landowners, and would devastate the wildlife of the Rio Grande Valley.”

“I appreciate the gentleman’s creativity in this amendment and sense of humor, but I will oppose this amendment,” McCaul said, according to The Hill.

However, the committee did adopt amendments introduced by Rep. Will Hurd (R-Texas), whose district includes more than 800 miles of the US-Mexico border. The amendments would prevent construction of the wall in Big Bend National Park and other areas “where rough terrain, natural barriers, and the remoteness of a location render a wall or other structure impractical and ineffective.”

From RT

Posted by The NON-Conformist

Puerto Rico’s crisis: How did it get so bad?

Puerto Rico is supposed to be America’s paradise island.

The temperature rarely falls below 70 degrees and it’s smack in the middle of the clear, warm Caribbean sea. Actor Johnny Depp, who owns a nearby island, says that part of the world “can add years to your life.”

Yet Puerto Rico today is in crisis. “America’s Greece,” some say. It’s makes more headlines for its unpaid $70 billion debt than its paradise beaches.

1. Government overspending

For years, Puerto Rico’s government spent more money than it took in from taxes. American states are required to craft balanced budgets every year, but Puerto Rican leaders didn’t, taking advantage of the island’s limbo status — it’s not a state, it’s a U.S. territory.

The big spending was fueled by a translation error between Spanish and English in the island’s 1952 constitution. It enabled Puerto Rico to issue debt to fund many activities, including day-to-day operations. It all comes down to the interpretation of the phrase “recursos totales” — total revenue or total resources? It was interpreted as resources, which is a broader term allowing the government to fund regular operations (e.g. education, policing, health care, etc.) via bonds.

Puerto Rico issued debt many times over the years. But it really skyrocketed in the the past decade, when total debt went from an already hefty $43.5 billion in 2006 to over $70 billion by 2014. (The island also has over $40 billion in unfunded pension liabilities).

2. The U.S. Congress changed the law

So what happened 10 years ago? Congress is partly to blame for the mess. The island used to be a tax haven for some big businesses such as the pharmaceutical industry. It was cheaper to make drugs on the island than anywhere else in America because companies didn’t have to pay federal tax on the Puerto Rican operations.

But in the mid-1990s, Congress began rolling back the special tax exemptions for businesses operating in Puerto Rico. The tax breaks phased out and fully ended in 2006.

Puerto Rico’s economy tanked after this happened, and it has yet to recover. Many good private sector jobs were lost and tax revenues dropped. The economy has shrunk almost every year since.

On top of that, the Merchant Marine Act of 1920 mandates that only U.S. vessels can take goods between Puerto Rico and the U.S. mainland. This increases prices on the island and makes goods produced in Puerto Rico less competitive than those coming from cheaper Caribbean nations that send goods on their own ships.

3. Skilled workers left the island

Residents are literally fleeing Puerto Rico, packing up and moving to the mainland U.S. in an exodus not seen since the “West Side Story” era of the 1950s.

It’s harder and harder to find a job. The unemployment rate is 11.8%, more than double the U.S. national rate.

What is especially worrying is that Puerto Rico is losing talented and skilled workers. A doctor a day (or sometimes two or three) leaves the island. Skilled professionals like doctors can get higher pay in the mainland U.S., and they just don’t see a clear path for the island to turn itself around. Families with young children — the future workforce — are also departing.

The shortage of medical workers has made the Zika virus outbreak in Puerto Rico even harder to handle. The island suffered the first death from Zika in the U.S., the Centers for Disease Control and Prevention confirmed.

4. Congress stripped Puerto Rico of its bankruptcy rights

Another major drawback for Puerto Rico is that it doesn’t have access to the same bankruptcy laws that states do. So-called Chapter 9 bankruptcy was created after the Great Depression to allow cities, towns and other municipalities to address severe debt problems under a workout process overseen by the courts. Detroit is the most famous Chapter 9 bankruptcy case so far.

Puerto Rico used to have Chapter 9 bankruptcy rights, but the island lost them in the 1980s when Congress revisited this part of the bankruptcy code. The Obama administration and the governor of Puerto Rico argue that it was an unfair decision and that Congress should give the island Chapter 9 rights again. So far, the Republican-controlled Congress is largely against it.

Many experts believe some sort of debt restructuring will be necessary. It may mean delaying payments to creditors or paying less than 100% back. The problem is Puerto Rico is in legal limbo. Neither the island, nor the creditors, want to budge much in negotiations until they know what the laws are for sure.

There’s a case sitting at the Supreme Court that could alter the rules, and Congress is debating a bill that could also change everything.

“We’re very far from the end,” says Philip Fischer, the managing director of municipal bond research at Bank of America Merrill Lynch.

By Heather Long/CNNMoney

Posted by The NON-Conformist

Tim Scott Slammed For Defending Trump’s Tax Plan: ‘Keep Yo Money’

Image: newsone

The only Black Republican senator has come under fire for making an overt appeal to Black people and working class Americans to support President Donald Trump‘s tax plan that would only benefit the rich. South Carolina Sen. Tim Scott used slang in an effort to convince “the average American” that the president’s plan would allow them to “take home more of their pay by taking less out of their pay.”

But it was how Scott followed up those words that caused many to react in disbelief. The senator — who was among the loudest voices to condemn Trump’s apparent defense of White nationalists in the wake of deadly violence in Charlottesville, Virginia, last month — looked right into a camera while recording a promo spot for the tax plan and said, “We want to help you keep yo money.

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The GOP tax plan, explained in simplest possible terms

The big tax code makeover President Trump and Republicans have been promising for months is finally out.

It’s nine pages long. That may sound like a lengthy document, but the final bill in Congress will be hundreds of pages. What the White House released today is a framework. It’s a summary of what top Trump officials and congressional Republican leaders have agreed to so far. The Trump administration says it’s the job of Congress to flesh out the specifics.

Here are the key takeaways:

  • The plan will likely add to America’s $20 trillion debt. There are lots of tax cuts spelled out. There are almost no loopholes eliminated.
  • The rich make out pretty well. The White House vows poor people won’t have to pay more than they do now, but there are few specifics in the plan so far to ensure that.
  • Businesses (both small and large) get major tax cuts.
  • Most people will pay lower taxes, although it’s unclear if the rich get a bigger break than the middle class.
  • There are still a lot of details Congress has to figure out.

What’s in there for the rich?
The wealthy get a tax cut. They will pay only 35 percent on their income taxes (down from 39.6 percent). At the moment, this rate applies to any income above about $418,000. It’s unclear if Congress will tinker with the income level that rate kicks in at. Trump says he would be fine with Congress raising taxes on the rich in the final plan, but he isn’t requiring that they do that.

The bigger tax break for the rich is the elimination of the estate tax, sometimes called the “death tax.” It’s the tax families currently pay when an asset like a house or ranch worth over $5.49 million is passed down to a heir after someone dies. Trump’s plan scraps this tax entirely.

What’s in there for the middle class?
This is the giant question mark. There’s a lot of details left for Congress to fill out. Under the plan, America will have just three tax rates: 35, 25 and 12 percent, but we don’t know yet which rate someone earning $50,000 or $80,000 will pay.

What we do know is the standard deduction (currently $6,350 for individuals and $12,700 for married couples) will nearly double. This means that a married couple earning $24,000 or less or an individual earning $12,000 or less won’t pay any taxes. But the plan also eliminates what’s known as the additional standard deduction and the popular personal exemption. Some filers may end up worse off after these changes.

The plan also promises a “significant increase” to the child tax credit (it’s currently $1,000 per child) and that middle class Americans can keep using the mortgage interest deduction as well as tax breaks for retirement savings (e.g. 401ks) and higher education. But it eliminates the state and local tax deduction, which is used by many in high-tax states like New York and California.

Can I really file my taxes on a postcard?
The “file on a postcard” idea was an exaggeration. The goal now is to get most people’s tax returns down to one page.

What about the working poor?
A senior White House official told journalists Tuesday, “We are committed to making the tax code at least as progressive as the current tax code.” Translation: The poor should not end up paying more than they do now. But it’s hard to check if that’s true because we still don’t have enough details.

In theory, increasing the standard deduction should mean that more Americans pay $0 in taxes, but it depends what happens to a lot of other tax provisions (and whether Congress ends up cutting safety net programs that help the poor to pay for tax cuts). Top Republican officials have not decided what to do with the Earned Income Tax Credit (EITC), which is widely used by the working poor to help them reduce their tax bill and even get a small amount of money back from the government.

What happens to the Alternative Minimum Tax?
The Alternative Minimum Tax (AMT) would go away under the plan. It currently applies mainly to individuals earning more than $130,000 and married couples earning more than $160,00. It was created in the 1970s to prevent wealthier families from taking so many tax breaks that they end up paying little to no taxes, but over the years, the AMT has impacted more and more families.

What happens to big businesses?
America’s large corporations will get a big tax cut. The top rate at the moment is 35 percent, one of the highest rates among developed nations. Most U.S. companies don’t pay that rate, but it is still a starting point. The Trump plan slashes the rate to 20 percent, just below the average of major developed countries the U.S. competes against.

The White House and Congress promised to close some loopholes that businesses currently enjoy, but no one is saying what those are yet. In fact, the only details we have show MORE business goodies, not less. The plan calls for businesses to be able to write off their investments (e.g. the cost of building a new factory) right away instead of crediting a little bit each year for several years. This is supposed to encourage companies to invest more, which will hopefully create more jobs.

What happens to small businesses?
Small businesses also get a tax cut under the plan. At the moment, many small business owners pay whatever their personal income tax rate is, so some end up paying as much as 39.6 percent. Under this plan, most “pass throughs” (code for small businesses) would pay at the 25 percent rate (the exception is if a small businesses earned very little income, they might be able to pay at the 12 percent rate).

There’s concern some rich people, especially hedge fund managers and consultants to the stars, will simply use this as a way to lower their tax bill. Instead of paying at the new 35 percent top income tax rate, they could say all their income is small business income and pay at the 25 percent rate. Trump has promised to fix that problem, but no one is sure how.

How will this plan help growth?
Trump’s big claim is that this tax overhaul will unleash economic growth. The United States has been growing at about 2 percent a year lately, below the historic norm. Trump keeps saying this plan will unleash growth of 3 percent — or more.

Economists, even those who work at Wall Street banks and for big companies, only project a modest boost to growth. Estimates range from 2.1 percent to 2.25 percent.

How much will this add to the debt?
Originally, Republican leaders said they would not add $1 to America’s debt, but that promise appears to be gone. The White House says it will go along with whatever price tag Congress allows. Right now, Senate Republicans have a deal to add $1.5 trillion to the debt over the next decade, so there’s a good chance this tax plan will add to the debt.

What are the pitfalls?
There’s a ton we don’t know yet. Many on the left are concerned this plan gives away too much to the rich and big businesses. Many across the political spectrum are alarmed that it will likely add to America’s already large debt.

By Heather Long/WashingtonPost

Posted by The NON-Conformist

The stark difference between Republicans and Democrats on health care couldn’t be clearer

Attendees hold signs while waiting for a health-care bill news conference to begin on Capitol Hill in Washington on Sept. 13. (Andrew Harrer/Bloomberg News)

“When they go low, we go high,” Michelle Obama told the Democratic National Convention in her electrifying address last year. That phrase summarizes the stark contrast between Republicans and Democrats on the fundamental question of affordable health care. Republicans want you to have all the health care you choose to afford, even if you can’t afford much. Democrats understand that affordable health care should be a fundamental right.

Having failed to pass four different bills to repeal and replace Obamacare, Republicans are back at it again. Backers of the new bill — labeled Graham-Cassidy after Sens. Bill Cassidy (R-La.) and Lindsey O. Graham (R-S.C.) — claim to have 48 or 49 votes for this effort. Senate Majority Leader Mitch McConnell (R-Ky.) has asked the Congressional Budget Office to make the bill’s assessment a priority. The 141-page bill was only made public on Sept. 13, but Republicans are pushing for a vote by the end of the month.

The millions of Americans who were appalled by previous Republican efforts to gut affordable health care should be alarmed once more. Graham-Cassidy employs classic conservative packaging to dress up what it is peddling. It turns health care over to the states, allowing Republicans to posture about getting “closer to the people.” Its cuts are phased in, delaying the effects until 2020 and the most destructive effects until 2027 and thereafter.

But it is the same old poison in a new bottle. The block grants to the states terminate the health-care law’s subsidies for moderate- and low-income families and make deep cuts in Medicaid — not only reversing the Medicaid expansion but also cutting into the core program itself. Because the block grants don’t keep up with projected inflation, they grow more inadequate over time. The bill leaves states free to let insurance companies charge higher premiums to people with preexisting conditions or to not require core benefits required under current law such as maternity care or prescription drugs. The cuts in the core Medicaid program will impact millions of seniors, people with disabilities and mothers with children. The CBO scoring is not in, but as the Center on Budget and Policy Priorities summarizes, while the CBO estimated that the last repeal-without-replace approach would deprive 32 million people of health insurance, Graham-Cassidy would likely strip an even higher number of coverage in its second decade.

Graham-Cassidy tells us much about the Republican majority. GOP legislators don’t mind that millions go without health insurance. They assume low-wage and moderate-income families should have less health-care protection than the wealthy. You get what you can afford, and you won’t be able to afford much because you’ll have to pay the rip-offs of the private insurance companies and the obscene drug prices of the drug lobby.

While Republicans were going low once more, Democrats were going high. Sen. Bernie Sanders (I-Vt.) introduced his Medicare-for-all bill last week. For Sanders, health care is a right, not a privilege. “We remain the only major country on earth that allows chief executives and stockholders in the health care industry to get incredibly rich, while tens of millions of people suffer because they can’t get the health care they need,” he wrote. “This is not what the United States should be about.”

His bill would provide universal coverage for all, expanding Medicare benefits to include eye and tooth care. It would eliminate the private-insurance-company and drug-company rip-offs. Businesses would be free of the burden of providing health care; workers would not have to fight against constant increases in co-pays and cutbacks in coverage. Sanders would phase his coverage in over four years. To pay for it, he proposes a range of progressive taxes. The wealthy would end up paying more for health care; the vast majority about the same or less — with greater security and more benefits. Sanders is also savvy enough to realize this won’t happen overnight. With Medicare for all as the clear and aspirational goal, he supports steps that would move toward that end.

Four years ago, Sanders introduced a similar bill without a co-sponsor. This week, 16 Democratic senators joined him, including presidential hopefuls such as Elizabeth Warren (Mass.), Kirsten Gillibrand (N.Y.), Kamala D. Harris (Calif.), Cory Booker (N.J.) and others. A majority of the House Democratic Caucus has endorsed a similar bill introduced by Rep. John Conyers Jr. (D-Mich.).

Democratic congressional leaders are wary. Moderate and conservative Democrats are uneasy in the face of Republican salvos about the “government takeover of health care.” Polling shows that Medicare for all has significant popularity, but that can wilt under attack. But even Hillary Clinton, who said Medicare for all would “never” happen during the campaign, now agrees, as she wrote in her recent book “What Happened,”that Sanders was right about the popularity of universal programs: “Democrats should redouble our efforts to develop bold, creative ideas that offer broad-based benefits for the whole country.”

The Sanders bill is closer to the beginning than the end of the push for making health care a universal right in this country. With Democrats a minority in both chambers, it isn’t near passage. Unlike the Republican bills, it will go through public hearings and extensive amendments. Passage will require fighting off the powerful insurance and drug lobbies.

More and more Americans understand that health care should be a basic right, not a commodity that you purchase if you can afford it. We understand that the grip of private insurance companies and oligopolistic drug companies is a far remove from a competitive marketplace. And now the contrast is as clear as day. Republicans want to strip millions of health insurance, including seniors in the last days of life, the disabled and women with infants. Democrats want everyone to have the right to affordable health care. There is a choice.

By Katrina vanden Heuvel/WashingtonPost

Posted by The NON-Conformist