How to Make an Impossible Presidency Bearable and Successful

 John Dickerson of CBS News wrote the cover story for The Atlantic that explores whether the modern US presidency is too big for any individual leader. There aren’t many answers for how to shrink the job or enlarge the men and women who occupy the White House.

John Dickerson of CBS News wrote the cover story for The Atlantic that explores whether the modern US presidency is too big for any individual leader. There aren’t many answers for how to shrink the job or enlarge the men and women who occupy the White House.

John Dickerson isn’t the first or last to wonder in print whether the US presidency has outgrown a single occupant.

In the cover article for the latest edition of The Atlantic, Dickerson contrasts today’s outsized view of the US presidency with the James Polk era, when the wife of the 11th President of the United States insisted bands played “Hail to the Chief” when he entered a room – so people would recognize him.

Dickerson, who is now part of the CBS Morning News team, says the problems President Donald Trump seems ill-equipped to deal with in the Oval Office may be a reflection of the growing difficulty of one man – or one woman – to represent the best interests of 327 million citizens while managing 2 million employees in the federal government (not counting US military personnel).

Ivana Trump, one of the ex-wives of President Trump, confirms Dickerson’s thesis. She says Trump loves his personal freedom and feels trapped by all the demands on the President, including reading mounds of material about virtually every subject and corner of the world. Trump didn’t even know his namesake son was being divorced until his ex-wife told him during one of their monthly calls.

The demands on modern Presidents have led others to question the human capacity of a single person to fill the job. Jeremi Suri’s “The Impossible Presidency” traces how the presidency has advanced from George Washington, who was assumed above pedestrian politics, to today when Presidents must be commander-in-chief, world leader and a political wunderkind. The presidency was a radical idea hatched by James Madison and Alexander Hamilton to be an “impartial, fair, forward-looking and unifying” force to guide the nation as a “model of virtuous behavior.” If anyone like that exists today, he or she probably couldn’t get elected as dog catcher, let alone President of the United States.

The talents required for a President are sprawling. They must be the war chief, preside over national sorrow and divine how to manage the economy, pretty much full-time on television – and now Twitter. Every misstep is magnified. Nothing is off-limits. Every problem sooner or later finds itself under the porte-cochére of the White House.

It is an interesting historical footnote that Washington never slept a night in the White House, John Adams was the first president to occupy the White House while it still was under construction. His impressions were less than superlative. Many modern presidents have referred to the White House as a prison. Trump compared it to a third-rate hotel. It would seem the digs don’t detonate the sparks of ambition to become President.

Which raises the question, why do people run for President? They tell supporters they want to make a difference, but they must realize the odds are stacked against them, especially when a President from one party serves with a Congress controlled by the other party. The founding fathers saw the wisdom of separation of powers, but they probably didn’t anticipate as much friction in the wheels of government as we witness today.

Dickerson lays much of the blame for dysfunction at the collective hands of the presidency. Since Andrew Jackson, American Presidents have become more powerful, more visible and more outgunned. They command an army that increasingly has become a covert operation. They appear on television in the Oval Office and make promises, which they often are unable to keep. They oversee a sprawling administration they can hardly contemplate, let alone manage. For the record, Jackson was an activist President trying to shrink the federal government, especially the National Bank.

If the problem with the presidency is obvious, solutions are opaque. Some have called for the United States to adopt a system closer to Britain’s parliamentary system, with a prime minister chosen by the controlling party. Others have emphasized the importance of bringing a competent team to Washington, DC to manage the levers of power. Still others have said government should be run more like a business.

The presidency is unlikely to morph into a prime minister that must seek approval, symbolic or otherwise, from the sovereign. Presidential teams are increasingly hard to assemble and keep in place for even a single term. The skills it takes to succeed in business may not be synonymous with what it takes to lead the nation. A CEO can give orders; a President has to find delicate balances on issues such as nuclear weapons that never reach the desk of a business executive.

In his book, Suri said Franklin Roosevelt was able in relative leisure to conduct war after Pearl Harbor. “Twenty years later, even as John F. Kennedy was confronting nuclear Armageddon in the form of the Cuban missile crisis, he was struggling to find time to deliberate with his closest advisers. His calendar was packed. The problem: a massive expansion of presidential power and responsibility.”

Dickerson concurs. He recalls how in 1938 some 100 demonstrators dressed up as Paul Revere and carried signs saying American didn’t want a dictator, a response to the first major reorganization of the executive branch since 1787. The reorganization was the result of a study commissioned by Roosevelt who basically said, “I need help.”

Since then, the world of Presidents has gotten a lot more intense. Nowadays, Presidents are held responsible for federal agents unable to provide emergency housing for hurricane victims. Maybe Harry Truman’s “The buck stops here” sign needs some editing.

If skeptics need evidence, Dickerson said they should scan the 300 photos of Barack Obama taken by White House photographer Pete Souza that shows the President who hosts endless meetings, comforts wounded soldiers, negotiates with world leaders and high-fives kids in Halloween costumes.

“The presidential brain must handle a wider variety of acute experiences than perhaps any other brain on the planet,” Dickerson writes. “Meanwhile, the President lives in a most peculiar unreality. His picture is on almost every wall of his workplace. The other walls contain paintings of the men who achieved greatness in his job, as well as those who muddled through. It’s like taking a test with your competition’s scores posted around you.”

His best advice for a future successful President: Empower his or her Cabinet. Study up to hit the road running. Concentrate on a few well-chosen goals. Force Congress to do its job. Claim some personal down time. Those steps won’t make the presidency less challenging, but it might help a future officeholder do the job in ways that transcend partisanship.

 

Yet Another Unbelievable, Wacky Week in Washington, DC

 As weeks go in Washington, DC, this has to be one of the wackiest as President Trump plots an attack on Syria, Facebook is accused of being a monopoly and former FBI Director James Comey’s memoir says the White House is run like a forest fire. And that doesn’t include the retirement announcement of House Speaker Paul Ryan and former Speaker John Boehner’s decision to advocate for legal medical marijuana.

As weeks go in Washington, DC, this has to be one of the wackiest as President Trump plots an attack on Syria, Facebook is accused of being a monopoly and former FBI Director James Comey’s memoir says the White House is run like a forest fire. And that doesn’t include the retirement announcement of House Speaker Paul Ryan and former Speaker John Boehner’s decision to advocate for legal medical marijuana.

You can’t say nothing is happening in the nation’s capital. You just can’t believe what’s happening.

President Trump is preparing to respond to a poison gas attack of civilians in Syria, signaled a reversal on the Trans-Pacific Partnership trade deal and had a tweet tirade over a raid of the home and office of his personal attorney, Michael Cohen. Trump said the raid was “disgraceful.” Cohen’s attorneys said it was “unnecessary and inappropriate.” Cohen said the agents who carried out the raid were “polite and respectful.” Media reports suggested the purpose of the raid may have been to seize recordings Cohen made of his conversations, including with Trump.

GOP House Speaker Paul Ryan announced he is retiring at the end of his term, fueling speculation of an impending GOP shellacking in the mid-term elections this fall. Meanwhile, Ryan’s Republican predecessor, John Boehner, announced his views on cannabis have “evolved” and he will advocate for legalization of medical marijuana.

Former FBI Director James Comey’s tell-all memoir is leaked that delivers scathing criticism of Trump as “unethical and untethered to the truth” and more like a mob boss than the leader of the free world. Trump responded on Twitter by calling Comey an “untruthful slime ball” and a “leaker” of classified information. Somewhere in the West Wing, former strategic advisor Steve Bannon was trying to convince Trump aides to go gonzo.

Secretary of State nominee Mike Pompeo underwent confirmation hearings where some of the most heated questions centered on what he says to Trump in their private conversations. Meanwhile, the Senate moved forward the nomination of a former coal industry lobbyist as the top deputy at the Environmental Protection Agency.

Senate and House committees, including the House Energy and Commerce Committee chaired by Oregon Congressman Greg Walden, grilled Facebook founder and CEO Mark Zuckerberg about failures to protect user privacy. Questioning zeroed in on whether Facebook is a monopoly and should be regulated.

The Congressional Budget Office issued an updated analysis of the GOP tax cut indicating it will result in a $1.9 trillion deficit and 80 percent of the benefit will accrue to foreigners, which complicates Republican campaign plans to tout the tax cut as a major achievement. Retiring Tennessee Senator Bob Corker told reporters voting for the GOP-backed tax cut may have been his biggest blunder in office. Trump dismissed the CBO findings.

Despite promising a swift response with “new, smart missiles,” Trump and his national security team were still debating how and when to respond to Syria’s renewed used of chemical weapons in light of Russia’s threat to defend Syrian military installations if attacked by US missiles or armed forces.

Trump’s tariff talk, which rattled stock markets, angered farmers and drew reciprocal tariffs, cooled off after Chinese President Xi Jinping gave what observers viewed as a conciliatory speech on trade relationships and included a reference to protection of intellectual property of foreign companies. Despite tough talk on the campaign trail and quick action when in office to dump US participation in the Trans-Pacific Partnership, Trump suddenly recognized the continued efforts of the other 11 Pacific Rim partners to write fair trade rules as a possible source of leverage on China.

Trump chose to stay in Washington, DC instead of attending a Latin American summit focusing on trade, including apparently stalled talks on revisions to the North American Free Trade Agreement. Vice President Mike Pence, who is filling in for Trump, is expected to hear pushback from Latin American leaders about Trump’s comments and actions toward Latino immigrants. Aides to Pence said his individual meetings with leaders are intended to “soften the edges” of US foreign policy and immigration views.

The week provided a lot for Trump to fume about, prompting stories about the President’s renewed consideration of firing Deputy Attorney General Rod Rosenstein and Special Counsel Robert Mueller. Previous musings about such firings have been dismissed by the White House, Trump’s lawyers and Republican leaders on the Hill. However, this week Senate Judiciary Chair Charles Grassley sought expedited consideration of bipartisan legislation to insulate the Mueller investigation from any adverse action by Trump.

Toward the end of the week, Trump pardoned Lewis “Scooter” Libby, the former chief of staff for Vice President Dick Cheney, who was convicted in 2007 of perjury and obstruction of justice involving the leak of a CIA officer’s identity. Libby’s sentence was commuted by President George W. Bush, but not pardoned. The timing of Trump’s pardon seemed like a signal that he would protect those who protect him.

The beehive in Washington, DC this week didn’t include any mention of or tweets about North Korea. The leaders of North and South Korea are scheduled to meet April 27 and a face-to-face meeting between Kim Jong-un and Trump is anticipated in either May or June.

 

Some Hate, But Most Love the FY 2018 Spending Spree

 Overriding fiscal hawks and rebuking President Trump, the bipartisan congressional FY 2018 spending package sweetens a lot of federal funding pots and will set up a shopping spree to get the money spent before the fiscal year ends this fall.

Overriding fiscal hawks and rebuking President Trump, the bipartisan congressional FY 2018 spending package sweetens a lot of federal funding pots and will set up a shopping spree to get the money spent before the fiscal year ends this fall.

Fiscal hawks hated it. President Trump said he would never sign another bill like it. Pundits said it was a rebuke to President Trump’s priorities and reflected poorly on his reputed negotiating prowess. Just about everyone else thought it was great.

The $1.3 trillion Fiscal Year 2018 spending bill gave new meaning to the word “omnibus.” Not only did it cover the waterfront of federal activity, it sweetened most of the federal spending pots, which is expected to energize efforts to get the money out the door by September 30, the end of the fiscal year, with the eager assistance of Members of Congress facing tougher-than-usual re-election battles.

Defense spending went up sharply, but there also were significant spending bumps for a variety of programs from community development block grants to funding for buses, a priority for The Bus Coalition. Rural areas will benefit from a tripling of grant money for rural TIGER projects, nearly $1 billion for rural water and sanitary waste projects and $685 million for rural broadband. The Secure Rural Schools program, almost given up for dead, was extended for another two years, benefiting Pacific Northwest interests.

Despite giddiness over the spending spree anticipated by passage of the spending package, there is a sober recognition this could be the last significant action by Congress until after the mid-term election in November. Results from special elections and President Trump’s lagging popularity have excited Democrats while alarming Republicans that control of one or both houses of Congress could flip, creating even more roadblocks to Trump’s agenda.

The combined fiscal effects of the GOP tax cut and the FY2018 spending measure may pour cold water on what will likely be equally generous FY2019 appropriations. In February, Congress agreed to similarly large topline spending levels for both defense and domestic discretionary spending for FY2019. A budget in hand this early typically greases the wheels of the appropriations process, but some congressional observers predict Congress will punt major spending decisions until after the November election to avoid defending an unpopular vote on the campaign trail.

The President complained the omnibus spending package contained a lot of “giveaways” to gain Democratic votes. In addition, the measure didn’t include a lot of Trump priorities, from his border wall to steep cuts in the Environmental Protection Agency, State Department and National Institutes for Health. It did include provisions blocking private school vouchers and increasing the budget for after-school programs and student mental health services and violence-prevention initiatives. And several regional projects were salvaged, such as $300 million to remove toxic sediment from the Great Lakes and $73 million to restore Chesapeake Bay, both of which were Target administration targets.

Major policy issues, including action on the tenuous situation for so-called “Dreamers,” were notably absent. The package managed to sneak in two provisions related to gun violence, presumably to forestall a more public discussion of the issue. One provision will increase incentives for federal agencies and the military to upload records into the background-checking system used for gun purchases. The second lifts the ban on Centers for Disease Control conducting research on gun violence, but provides no funding for it. Such research has been blocked by the Dickey Amendment, named after a GOP congressman who sponsored it, but later changed his mind.

The negotiations that led to the spending package became a focal point for criticism. Conservative commentator Ann Coulter ripped Trump for failing to achieve his primary priorities even though he touted his negotiating skill in his presidential campaign. Coulter’s criticism was echoed by Senate Democratic Leader Chuck Schumer who clucked that Trump had been out-negotiated. Earlier, he compared negotiating with Trump to Jell-O.

In an odd postscript to the spending deal, Trump has privately pressured the Pentagon to divert some of its enlarged budget to build his border wall.

 

 

Nation’s Capital Waiting, Watching for Deadlines, Shoes to Drop

 Turbulent clouds hovering over the US Capitol are apropos for the bevy of big issues and decisions that are pending, and for the prospects of more unexpected shoes to drop.   Photo Credit: J. Scott Applewhite, AP

Turbulent clouds hovering over the US Capitol are apropos for the bevy of big issues and decisions that are pending, and for the prospects of more unexpected shoes to drop. 

Photo Credit: J. Scott Applewhite, AP

Washington, DC is full of apprehension as big events loom. More West Wing staff changes. An omnibus spending bill. President Trump’s message to Congress explaining his steel and aluminum tariffs. A pending deadline on the Iran nuclear deal. Anticipated face-to-face talks with North Korea. Possible gun violence legislation. And new developments in the Russian meddling investigation.

Last week saw a continuation of the revolving door for the Trump team and rumors persist that National Security Adviser H.R. McMaster may be the next to get the boot. Ousted Secretary of State Rex Tillerson and McMaster have urged a more cautious approach toward Iran, which runs counter to what Trump wants. The President’s personal staff remains in flux, too.

Intensive bipartisan negotiations continue on a massive spending package, which Congress tasked itself with approving by this Friday as part of brokered deal last month to prevent another federal government shutdown. There was hope pieces of the $1.3 trillion spending measure would fall into place so it could be passed in something resembling normal order. That hope appears dashed, as disagreements persist on everything from women’s health to Trump’s border wall and from campaign finance to a major transportation project in New York and New Jersey. Negotiations are tricky because many House and Senate Republicans are expected to oppose the measure as fiscally reckless, which means it will fall to Democrats to approve it, so they have bargaining power to set the terms.

Trump’s abrupt decision to impose stiff tariffs on steel and aluminum imports. Within 30 days of when the tariffs go into effect, Trump must tell Congress formally why he imposed them – and whether and how he may exempt some nations from the tariffs. Many congressional Republicans aren’t keen on the tariffs because of their unintended effects on other parts of the economy and their potential to start a global trade war. Trump’s top economic adviser quit after Trump announced the tariffs. The European Union and some steel-producing countries have threatened trade retaliation, either through tariffs or shifting large purchases, such as commercial aircraft, from US to other suppliers. The tit-for-tat could result in one or more countries, including the United States, filing unfair trade complaints with the World Trade Organization.

The Tillerson firing (the former head of Exxon-Mobile learned he was canned while on the toilet, according to press reports) and the shaky status of McMaster are likely linked to the May 12 deadline Trump faces on whether to extend the waiver on Iranian sanctions lifted as part of the 2015 nuclear arms deal. Trump said he reluctantly waived sanctions in January, but has sounded more bellicose since then toward Iran. He has sided with Israeli Prime Minister Benjamin Netanyahu who views the deal as weak. Trump also has aligned with Saudi Arabia in a conflict in Yemen that is effectively a proxy war between the Saudis and Iranians, which both seek greater influence in Middle East.

Trump said he wanted a secretary of state closer to his mindset as he approaches personal negotiations with North Korea.

Leader Kim Jong-un sometime this spring. Trump chose CIA Director Mike Pompeo to replace Tillerson, but that nomination could face trouble in the Senate as two GOP senators have already said they would oppose his confirmation. There is uneasiness that Trump and his administration may not be prepared to deal with Kim, but the talks appear on the road to happening as North Korea and Sweden, which is the American shadow voice, explore ways to find a peaceful resolution.

The Parkland, Florida school shootings sparked a vigorous, student-led national push for gun violence legislation. Florida lawmakers and GOP Governor Rick Scott approved a measure over objections from the National Rifle Association. The NRA subsequently challenged the constitutionality of one provision in the bill raising the legal age to buy long weapons from 18 to 21 years old. Trump has bounced around on what he would support, including support for arming some school teachers, but there are hints of a building bipartisan consensus in Congress to strengthen background checks before gun purchases – and possibly take further steps. For his part, Trump has asked his administration to find a way to ban bump stocks, a device used in the Las Vegas massacre to turn a semi-automatic weapon into a virtual machine gun.

Despite boastful predictions by Trump and his team that Special Counsel Robert Mueller’s investigation would wrap up soon, the opposite appears true. Last week’s news included subpoenas issued to the Trump Organization for documents relating to its dealings with Russian financial interests. The firing of Andrew McCabe from the FBI just before he was set to retire, which was celebrated in Trump tweets, may have added more propellant to charges of obstruction of justice. While the firing of McCabe may have been inspired as a way to discredit him as a witness against Trump, but it also removed any shackles McCabe may have felt to tell what he knows about Trump attempts to blunt the Russia meddling issue.

If that wasn’t bewildering enough, there also is the Stormy Daniels spectacle. The former porn star and her new attorney are keeping the story about a sexual encounter and hush money front and center. Trump has denied having a fling with Daniels, despite pictures of the two of them together and negotiations on Trump Organization email between his fix-it attorney and Daniels that resulted in a $130,000 hush money payment just before the 2016 election. Last week, Trump’s team baffled observers by declaring Daniels owed $20 million for violating terms of the non-disclosure agreement.

There is never a dull moment in the nation’s capital, and probably never an empty bar seat.

 

Perspective on Multilateral Trade Deals and Trade Wars

 President Trump’s intention to impose tariffs on imported steel and aluminum caused ripples on Wall Street, outcries from companies that depend on global supply chains and warnings from economists who cited the cost of trade wars.

President Trump’s intention to impose tariffs on imported steel and aluminum caused ripples on Wall Street, outcries from companies that depend on global supply chains and warnings from economists who cited the cost of trade wars.

President Trump’s threat to impose a 25 percent tariff on steel imports and 10 percent on aluminum imports stunned Wall Street, infuriated US international trading partners and confounded economists.

Trump defended his proposed tariffs as campaign promises he intends to keep. More fundamentally, they reflect his view that bilateral trade deals that his administration would negotiate would be better for Americans than multilateral trade pacts, which he has deplored as unfair to US workers. So far, few nations have shown much interest in bilateral trade deals. The United States and a post-Brexit United Kingdom will need to work out bilateral trade arrangements, but that can’t occur until the UK is officially out of the European Union.

Stunned Wall Street investors worry about the ripple effects of a trade war on the broader US economy. International trading partners are contemplating retaliation. Economists point to the unpleasant history of trade wars. Trump says trade wars can be good and winnable.

Like immigrant bans and border walls, unilateral tariffs have gone out of favor in the globalized economy. Since tariffs levied as a cure to the Great Depression, which in actuality deepened and lengthened the depression, industrialized nations have moved toward multilateral military, diplomatic and trade arrangements. NATO, the United Nations, the European Union and the North American Free Trade Agreement are prime examples.

The motivation for multilateral arrangements is to provide for greater security and enhanced economic opportunity at the expense of some domestic industries and workers. The underlying macroeconomic theory is that allowing countries to realize their competitive advantages on a greater scale will create more prosperity than protecting domestic markets. The winners tend to be consumers and global companies that have clear rules to follow for their international supply chains. The losers are industries and economic sectors that can’t compete globally.

The losses are not insignificant and can be enormously destructive in regional or state economies such as the Rust Belt. Politicians and organized labor have responded to abandoned factories, displaced workers and failing farms by blaming “free trade” and taking aim at NAFTA and the proposed Trans-Pacific Partnership, which was intended to connect US economic interests into an Asian Pacific trading community.

Even though Trump withdrew from the TPP, the other 11 nations involved have continued to pursue a trade pact among themselves, for among other reasons self-protection against China’s growing economic power and its interest in pursuing separate trade deals with Japan, Indian and South Korea. European nations created an economic union, including a common currency, to leverage their collective market in the face of a dominating US economy, which now boasts a $17 trillion annual gross domestic product.

Along the way, the globalization of finance overwhelmed global trade in goods. Capital sloshes across national borders thanks to creative finance and the advent of shell companies, almost without regard to national banking regulations or tax policy.

One of the largest ironies in the current trade dispute is that China’s excess capacity in steel and aluminum production has driven down prices globally, as China has until recently encouraged its corporations and wealthy individuals to invest billions in overseas businesses and real estate. Lower prices and a stream of investment capital have fueled economic growth from Africa to America.

The United Kingdom’s vote in 2016 to exit the European Union a year from now has revealed how difficult it is to depart from a multinational economic arrangement. Currency exchange restrictions, foreign worker status, border crossings and trade are complex issues and, depending on final Brexit agreements, could crimp international investment in the UK, discourage immigrant labor and require a hard border with Ireland.

Trump officials say US steel and aluminum producers need protection because they are vital to American security interests, which is akin to developing countries defending tariffs to protect their infant industries. One challenge with selective tariffs is they have a habit of spreading. For example, Trump threatened to impose tariffs on European autos if the EU retaliated to his steel and aluminum exports.

Former US trade officials say the Trump tariffs violate international trade agreements and lead to litigation before the World Trade Organization. Trump might consider withdrawing from the 160-member WTO, but trade officials warn that could risk unraveling the global economic order, which dates back to the 1994 General Agreement on Tariffs and Trade. One of the GATT principles is preventing countries with excess capacity in a commodity from dumping products on the international market at below cost. Some have argued the United States should pursue an anti-dumping case against China. U.S. Steel argued for that approach as far back as 2016.

Trump’s call for tariffs surprised Republican leaders on Capitol Hill. Over the weekend on Face the Nation, South Carolina GOP Senator Lindsey Graham said Trump should reconsider imposing tariffs because they raise consumer prices and “let China off the hook.” “China wins when we fight with Europe. China wins when the American consumer has higher prices because of tariffs that don't affect Chinese behavior. If you want to affect China get back in the Trans-Pacific Partnership, be present in Asia, hit them on intellectual property theft, hit them on currency manipulation, hit them about steel dumping. China is winning and we're losing with this tariff regime.”

 

Two Under-the-Radar Issues Attract Solutions, Not Slogans

 As Congress bogs down on how to resolve immigration and gun violence challenges, no less serious problems of sex trafficking and paid family leave have attracted solution-searching instead of sloganeering and raise hopes for bipartisan compromises that could pass into law before the end of this year.

As Congress bogs down on how to resolve immigration and gun violence challenges, no less serious problems of sex trafficking and paid family leave have attracted solution-searching instead of sloganeering and raise hopes for bipartisan compromises that could pass into law before the end of this year.

As appropriations, immigration and guns dominate congressional headlines, two issues seem to be picking up bipartisan traction on Capitol Hill – paid family leave and sex trafficking.

President Trump has opened the door to paid family leave legislation. First daughter Ivanka Trump and GOP Senator Marco Rubio are teaming up on a proposal that would allow people to tap into their future Social Security benefits to pay for family leave. Congressional Democrats are pushing a more aggressive plan that would increase employee and employer payroll taxes to cover the cost of paid family leave.

Five states, including Washington, already require paid family leave. Eight states, including Oregon, have expanded the length of unpaid family leave. Most US workers are covered by the Family Medical Leave Act, which allows up to 12 weeks of unpaid time off for a newborn child or care for an aging parent. The City of New York expanded its family leave policy to include recuperation from domestic abuse.

 Paid family leave is an issue that has attracted bipartisan interest because it impacts business productivity, employee satisfaction and family structure. The conservative American Enterprise Institute and the liberal Brookings Institution undertook a joint look at the issue of paid family leave and have been  blogging  about what they jointly concluded for the past year.

Paid family leave is an issue that has attracted bipartisan interest because it impacts business productivity, employee satisfaction and family structure. The conservative American Enterprise Institute and the liberal Brookings Institution undertook a joint look at the issue of paid family leave and have been blogging about what they jointly concluded for the past year.

Supporters of paid family leave point to data showing only 14 percent of US workers have access to paid family leave through their employers. Most employees, they suggest, cannot afford to take off long amounts of unpaid leave. 

Opponents say mandating paid family leave will make it more expensive to hire employees and lead to fewer jobs. Businesses are caught in the middle and disapprove of what has become a patchwork of family leave policies state to state and, in some cases, community to community.

NPR ran a story that included a vignette about Joe Fain, a Washington state senator, who took an unpaid leave when his son was born and became an advocate for the benefit. At the time, the City of Seattle had adopted expanded leave policies, which led businesses to push the state legislature to act. Fain says, in the same way, states are now pushing for federal action.

While the various sides of this issue aren’t close to a compromise, there is broad agreement that paid family leave is important to getting newborns off to a good start and to helping families cope with illnesses by aging parents.

Senator Rob Portman, an Ohio Republican, is pushing hard for legislation to protect potential sex trafficking victims and make online websites liable if they enable sex trafficking. His bill, called Stop Enabling Sex Traffickers Act, has attracted 60 congressional cosponsors and is supported by law enforcement, civil rights and faith-based groups.

Portman says he became interested in the subject after meeting with Ohio constituents who described incidents of sex trafficking in their communities, in many cases associated with opioid abuse. Portman says sex trafficking is big business that has increased, despite tougher penalties, because of what he called the “ruthless efficiency” of the “dark side of the internet.” He blames an 850 percent increase in sex trafficking since 2015 on the “emergence of companies like Backpage.com, which probably has about 75 percent of the commercial sex traffic on one site.”

Some technology companies have pushed back on Portman’s cure of removing legal immunity for online platforms, claiming it would expose the companies behind those platforms to lawsuits for content their users post. Loss of legal immunity, they say, could chill continuing development and expansion of online platforms.

While paid family leave and sex trafficking solutions will require answering significant policy questions, they may provide Congress with an easier avenue to address serious social problems plaguing America than trying to reform immigration policy or agree on ways to stem gun violence. If nothing else, these complex issues have not been reduced to polarizing slogans, which is allowing for collaborative conversations and potential bipartisan compromises.

Murky Stew of Issues Face Congress as Election Season Approaches

 Congress faces a daunting challenge to approve 12 appropriations bills before the March 23 deadline in the latest Continuing Resolution budget deal amid fiery debates over immigration and gun violence – and a fast-approaching primary election season in which both political parties will play to their respective bases.

Congress faces a daunting challenge to approve 12 appropriations bills before the March 23 deadline in the latest Continuing Resolution budget deal amid fiery debates over immigration and gun violence – and a fast-approaching primary election season in which both political parties will play to their respective bases.

Most Members of Congress are back in their states and districts for the President’s Day Recess, but here in DC leaders and staff are trying to make sense of the previous month’s legislative roller coaster and decide how to chart a path forward.

There are plenty of obstacles in the way – immigration, gun control and primary elections. The challenges Congress faces are a lot like the temptations of distracted driving. They will be trying to steer a final budget agreement to safe harbor, while fending off texts, tweets, marches and grandstanding that are sure to grab a lot of attention.

Over the last two weeks, Congress was able to avoid another government shutdown by passing a fifth short-term extension to March 23, increasing spending caps for FY18 and FY19 and debating, but failing to pass a comprehensive immigration bill out of the Senate. However, nothing has been fully resolved. 

Each of these three thorny items will need to be addressed or finalized over the coming weeks. It is likely these politically charged issues will start to intersect and cause further instability. Add to the mix the school shooting in Parkland, Florida along with related scheduled gun control marches in DC and the political landscape on Capitol Hill becomes even less predictable.

And that doesn’t factor in the effect of President Trump’s tweets.

Appropriators have been tasked with allocating an additional $63 billion to the 12 appropriations subcommittees that will be charged with writing a final FY18 budget by March 23. Bolstered spending should grease the skids for quick passage in Congress.

However, appropriations often get bogged down with controversial policy riders that can torpedo broad-based bipartisan deals. Gun control and immigration are two of the most highly charged political issues. It will be hard for both sides to restrain themselves and put a firewall between a final spending agreement and the enormous pressure to score points with their respective bases.

The final ingredient in the murky congressional stew is the 2018 primary election schedule that begins in less than a month and continues through mid-September. The earliest state primary will be held in Texas on March 6, just two weeks from now. Election activity will peak in June with 17 primaries. Oregon’s primary will be May 15.

Republicans are already feeling the pressure with GOP retirements nearly tripling those of Democrats (25 to 9). Historically, mid-term elections are bad for the party in charge of the White House and Republicans and Democrats will be looking for ways to mobilize their base. Immigration and guns are certainly two huge mobilizing forces for both sides.

At the end of the day, we don’t feel like these issues will torpedo the budget deal. However, this will be the biggest test for leaders on both sides of the aisle to steer the spending bill to safe harbor, while at the same time satisfying their respective constituents.

Joel prof photo.jpeg

Joel Rubin is a partner and leader of CFM’s federal affairs team based in Washington, DC. He has worked on Capitol Hill and now represents Pacific Northwest interests in Congress and with federal agencies.

 

Senate Reaches Bipartisan Deal with Sharp Spending Increases

 The US Senate reached a 2-year budget deal that sharply increases defense spending and for a range of health care programs. The deal, which will boost the federal deficit and doesn’t deal protection of Dreamers, still must pass muster in the House and with President Trump, even though it doesn’t appear to provide funding for his border wall

The US Senate reached a 2-year budget deal that sharply increases defense spending and for a range of health care programs. The deal, which will boost the federal deficit and doesn’t deal protection of Dreamers, still must pass muster in the House and with President Trump, even though it doesn’t appear to provide funding for his border wall

[UPDATE: Early on Friday, February 9, the Senate passed a continuing resolution in effect until March 23 that authorizes spending levels contained in the bipartisan Senate budget deal. Later in the morning, the House passed the continuing resolution and President Trump signed it. The temporary government shutdown lasted only a few hours. Federal government employees reported to work as normal.]

 

The Senate reached a bipartisan budget deal that will boost federal spending by $300 million over the next two years and suspend the debt ceiling for one year, but without resolving immigration issues. The House and President Trump still must agree, which is not automatic.

House conservatives voiced concern about increased spending that will push up the federal deficit even further after GOP-backed tax-cut legislation late last year. House Democrats were furious the Senate deal didn’t include protection for Dreamers who may face deportation after Trump’s March 5 deadline. Speaker Paul Ryan said he believes the votes exist in the House to approve the Senate compromise.

There also may be some procedural issues slowing the vote in the Senate that could result in a temporary government shutdown scheduled for midnight tonight. And President Trump has yet to officially sign off on the deal, which doesn’t appear to include money for his border wall.

The biggest spending increase goes for defense – $80 billion in Fiscal Year 2018 and $85 billion in Fiscal Year 2019. Caps on non-defense discretionary spending would increase by $63 billion this year and $68 billion next year. Almost $90 billion is provided for disaster relief. There appears to be a $20 billion down payment on the Trump infrastructure package.

The increases give both political parties plenty to crow about and resolve a nagging budget issue that is a hangover of sequestration that went into effect in 2011.

If the Senate budget deal survives, congressional appropriators are expected to write an omnibus FY 2018 appropriations bill that moves up total spending from $1.065 billion allowed under current law to $1.208 trillion as provided in the Senate budget agreement.

The deal also includes some other significant provisions:

  • A one-year extension of expired tax breaks that were not included in the December 2017 tax reform bill, including the Alternative Fuels Tax Credit.
  • Four additional years of extension of the CHIP program after the six-year extension enacted last month runs out.
  • Two years of renewed funding at around $7 billion for community health centers, $6 billion for mental health treatment and opioid addiction and $2 billion in additional funding for the National Institutes of Health. Notably absent, however, was funding to shore up the Affordable Care Act, which was the concession promised to Maine Senator Susan Collins in return for her vote for the GOP tax cut. The deal does continue to delay any cuts to hospitals that serve a disproportionately high share of low-income patients.
  • Accelerated elimination of the “doughnut” in Medicare in pre-catastrophic care drug coverage and elimination of the controversial Medicare Payment Advisory Board. The limit on Medicare coverage for physical therapy would be permanently repealed.
  • $500 million to the National Health Service Corps and $363 million for the Teaching Health Center Graduate Medical Education program to encourage doctors to practice in underserved areas.
  • Creation of a new Joint Select Committee on Solvency of Multiemployer Pension Plans, to produce legislation fixing the Pension Benefit Guaranty Corporation by December 2018 with a guarantee that the bill will get a vote in the Senate under “fast track” procedures.
  • Creation of a new Joint Select Committee on Budget and Appropriations Process Reform, to produce legislation fixing the broken congressional budget process by December 2018 with a guarantee that the bill will get a vote in the Senate under “fast track” procedures.

An estimated $100 billion in “pay-fors” were included in the package to mitigate the effect of non-defense spending on the federal deficit. They include:

  • An extension of the portion of Transportation Security Administration aviation security fees that go towards deficit reduction into fiscal 2026 and 2027, estimated to total $1.64 billion in 2026 and $1.68 billion in 2027.
  • Selling oil from the Strategic Petroleum Reserve.
  • Taking money from the Federal Reserve’s surplus fund.
  • Extending sequestration of non-exempt mandatory programs (mostly Medicare) into fiscal 2026 and 2027.

    Joel Rubin is a partner and leader of CFM’s federal affairs team based in Washington, DC. He has worked on Capitol Hill and now represents Pacific Northwest interests in Congress and with federal agencies.

Congress Faces Yet Another Spending Deadline

  In what might be an omen for this week on Capitol Hill as Congress faces yet another spending deadline, the train carrying Republicans to their West Virginia retreat site. Just as ominous, Democrats are scheduled to begin their 3-day retreat the day before this week’s deadline.

 In what might be an omen for this week on Capitol Hill as Congress faces yet another spending deadline, the train carrying Republicans to their West Virginia retreat site. Just as ominous, Democrats are scheduled to begin their 3-day retreat the day before this week’s deadline.

In the aftermath of President Trump’s first State of the Union Address and the hullabaloo over release of the GOP surveillance memo, the looming government spending deadline this Thursday almost slipped out of sight. Almost.

As bitter and battle-weary Members of Congress trudge back to Capitol Hill this week, the deadline will be anything but invisible. What’s hard to see is any compromise that can win enough support from Senate Democrats, House conservatives and the Trump White House. Before they resolve differences on spending, they need to agree on immigration.

Senate Democrats want protection for so-called Dreamers, but House conservatives object to granting them an eventual path to citizenship. Trump offered up long-term protection for Dreamers, but at the price of a $25 billion “trust fund” for his promised border wall, which Senate Democrats reject.

Republican Congressman Will Hurd, a former undercover CIA officer whose Texas congressional district includes the longest stretch of the US-Mexican border, has proposed a simple compromise, along with Democratic Congressman Pete Aguilar of California. Their proposal would protect Dreamers and provide for enhanced border security, but not necessarily a huge investment in a physical wall. It’s uncertain whether Trump or a majority of House Republicans would support their proposal.

immigration may be the roadblock to a compromise, but disagreements over spending, especially for defense and health care programs, are like a washed-out bridge. The inability to agree on spending in the current federal fiscal year has led to four continuing resolutions – stopgap funding measures that generally allow federal agencies to keep plugging along with the same budget as the previous year.

The disagreement isn’t just over on how to spend federal dollars, but how many federal dollars to spend. After Republicans pushed through a $1.5 trillion tax cut, which may add as much as $1 trillion to the federal deficit this year, House conservatives are wary of spending even more. Democrats are pressing for restoration of funding for community health centers and more generous disaster relief for states affected by hurricanes, floods and wildfires.

Stop-and-go spending authorization has prevented agencies from the Pentagon to the Centers for Disease Control to pursue new objectives and resulted in an added layer of government inefficiency. Defense Secretary James Mattis has warned that the inability of Congress to pass a budget has weakened US security.

While there is broad bipartisan agreement on the need for infrastructure investment, there is widespread disagreement on how much should come from direct federal spending – and how whatever level of funding is approved will be paid for. 

Since the three-day partial government shutdown that ended with another continuing resolution and the February 8 deadline, there isn’t much public evidence of productive negotiations. Most of last week was consumed by Trump’s speech and bitter partisan back-and-forth about the memo released by the House Intelligence Committee’s GOP majority. That’s not a great starting block for negotiations to avoid another government shutdown the end of this week.

Rep. Adam Schiff, the lead Democrat on the committee, said over the weekend he will press for a vote as soon as today on the Democratic rejoinder to Chairman Kevin Nunes’ memo. Nunes has hinted he may be working on additional memos that he says may show anti-Trump bias in the State Department.

Despite Trump’s plea for bipartisanship in his State of the Union speech, his administration continues to provide fodder to deepen partisan divides. He has virtually gutted the Consumer Financial Protection Bureau, refused to impose congressionally approved sanctions on Russian oligarchs and watched as his appointee to lead the Centers for Disease Control resigned after disclosures that she bought and sold tobacco stocks.

Still hanging around, but as far in the shadows as before, is the need to increase the national debt ceiling. Treasury officials say congressional action is needed in February. GOP congressional leaders almost certainly need Democratic votes in both the House and Senate to approve a debt limit increase, but that may prove politically complicated as well with so many other higher profile disagreements.

It will be an interesting week on Capitol Hill, which Vox chided will be punctuated by Republican and Democratic caucus retreats on the weekends before and after the latest spending drop-dead date. Perhaps as an omen, the train carrying Republicans to their West Virginia retreat site ran into a garbage truck. Just as ominous, Democrats are set to begin their 3-day retreat in Maryland the day before the spending deadline. Don’t bet against yet another temporary continuing spending resolution, as well as more political bickering. On the bright side, the Winter Olympics start this week.

 

New Leak Confirms Infrastructure Package Outline

 The long-promised Trump infrastructure package may be unveiled later this month when the President delivers his State of the Union Address. A new leak confirms what we reported several weeks ago, including money that could be used to expand broadband access in rural areas.

The long-promised Trump infrastructure package may be unveiled later this month when the President delivers his State of the Union Address. A new leak confirms what we reported several weeks ago, including money that could be used to expand broadband access in rural areas.

Expectations are building that President Trump will unveil his long-promised infrastructure package during his State of the Union Address January 30.

A well-publicized leak of his proposal emerged this week, which conforms closely with what we reported – also based on leaked material – last month in this blog.

There will be four pots of money. The largest, totaling $100 billion, is intended to provide a federal incentive for transportation, water, hydroelectricity and brownfield reclamation projects. Money from this pot would cover 20 percent of project costs and non-federal funding would make up the rest.

A second pot sets aside $50 billion for rural projects, which also can include broadband investments. The last leak indicates $40 billion from this pot would be allocated to states after they produce a comprehensive rural investment plan.

A third pot would give the Department of Commerce the discretion to spend $20 billion on what are called transformative projects, including higher-risk and higher-reward projects.

Around $30 billion would be dedicated to federal capital financing and credit programs including TIFIA and WIFIA that are intended to spur public-private partnerships such as toll roads.

There are congressional proposals on infrastructure, so the final shape of a package that can pass remains to be seen. But it is encouraging to see the debate over an actual package may begin soon in Congress.

Congressional attention has been focused – and will continue to focus – on reaching an agreement on spending. The nation is operating under its fourth continuing resolution, with a February 8 deadline to negotiate a longer-term agreement under the shadow of other issues that range from increased military spending and immigration.

The three-day partial federal government shutdown that ended Monday may be a precursor of what’s to come. Senate Democrats want to use their limited leverage to filibuster to secure the future of 800,000 “Dreamers.” Trump and conservative Republicans in the House want to use the Dreamers as a bargaining chip to get up to $18 billion for a border wall and other changes in immigration policy.

The consensus view of political observers is that Senate Democrats folded fairly quickly because they weren’t geared up for a war of words in print and on social media. Republicans pounded them, saying they shut down the government to protect illegal immigrants.

Government shutdowns probably don’t shower any political party with praise, but Democrats may be better armed to defend their position if February 8 rolls around and there is no deal on immigration, border security or military spending.

Global Leaders Gather to Patch a ‘Fractured World’

 Global leaders, including President Trump, will gather next week in Davos, Switzerland to wrestle with serious risks that threaten to make the world even more fractured. It should be worth watching.

Global leaders, including President Trump, will gather next week in Davos, Switzerland to wrestle with serious risks that threaten to make the world even more fractured. It should be worth watching.

For world leaders, including President Trump, who will attend next week’s World Economic Forum in Davos, Switzerland, the agenda will be anything but a walk in the park.

This year’s theme, “Creating a Shared Future in a Fractured World,” will also present a challenge for some attendees who have deepened global divisions, as well as divisions in their homelands.

“Our world has become fractured by increasing competition between nations and deep divides within societies. Yet the sheer scale of the challenges our world faces makes concerted, collaborative and integrated action more essential than ever,” says Klaus Schwab, founder and executive chairman of the Forum. Trump is scheduled to deliver a keynote address at the end of the four-day event.

What’s most startling is the report about potential “future shocks” that will inform discussions at the Forum. The report lists 10 of them. Some are obvious (even if denied). Others less obvious (and rarely discussed).

At the top of the list of global risks, as you might expect, is accelerating climate change, which threaten world food supplies. Extreme weather events such as hurricanes and floods combined with prolonged drought have impacted global food supply chains.

While those impacts have already left parts of the world hungry, a graver risk looms if trade relations break down, political instability cripples cultivation or crop disease spreads. The ensuing food crisis would be bad enough, but could lead to steep price hikes and widespread conflict, which would literally be international food fights.

The report acknowledges fears over how automation will change the complexion of the workforce, but it warns a different scenario may be of greater concern. “As we become more reliant on codes that can write their own code (the crux of Artificial Intelligence), we’ll lose the ability to track and control it. The world relies heavily on the internet; the disruption will be massive.”

The “end of trade as we know it,” according to the report, could lead to a world “grappling with rapidly spreading trade disputes” that “adversely affects economic activity, output and employment.”

Cracks in democracy pose a global risk, the report says. “The polarization of politics could worsen, leaving people even further apart ideologically and with less room for compromise. In the worst-case scenario, political debate could be replaced by the use of force. Those in opposition could then take up arms, a situation particularly worrisome in areas with ready access to weapons or a history of political violence.”

Other threats cited by the report include depletion of ocean fish stocks through use of the unmanned drone fishing boats, another global financial crisis, war fought without rules and the break-up of the internet because of cyber attacks or nationalistic policies.

Two other threats identified in the report are widening inequality throughout the world juxtaposed with rising nationalism and efforts to expel ethnic or religious minorities from regions or entire countries.

Inequality goes beyond the gulf between rich and poor, extending access to critical resources or innovations. The report says bioengineering and cognition-enhancing drugs hold the promise of considerable benefits, but contribute as the same time to a wider gulf between haves and have nots.

Attendees also will be exposed to Forum initiatives, which range from food security to international trade and investment to shaping the future of mobility, energy and the environment. You might call the event a crash course on how the world turns.

For supporters and critics of Trump, the Davos meeting raises intriguing questions. What, for example, is the candidate who campaigned as a populist in support of “America First,” going to say in his keynote address at an event attended by the world’s elite globalists? Critics may hope some of the threats discussed at the event wise up Trump, but worry his rejection of issues such as climate change and open trade could further alienate the United States from world leaders and its longtime allies.

Trump might view his moment on the world stage as a platform to announce something dramatic, such as a pullout by the United States of the North American Free Trade Agreement.

Based on the agenda and how things are shaping up in the world, this year’s World Economic Forum may merit more attention than usual, which is virtually assured because Trump is attending.

 

States Poised to March Through Tax Loophole

 Tax loopholes are normally associated with corporations and wealthy individuals, but top officials in New York and California have announced plans to march through a loophole that would allow their taxpayers to bypass a new federal limit on the deductibility of state and local taxes.

Tax loopholes are normally associated with corporations and wealthy individuals, but top officials in New York and California have announced plans to march through a loophole that would allow their taxpayers to bypass a new federal limit on the deductibility of state and local taxes.

High-tax blue states such as New York and California may join the parade of tax avoidance planners looking for loopholes to march through in the GOP-backed federal tax overhaul to contravene the $10,000 deductibility limitation on state and local taxes.

With the ink hardly dry on new federal tax legislation, New York Governor Andrew Cuomo and California state Senator Kevin de Leon are proposing schemes that would effectively convert state income tax payments into charitable contributions, thus making them eligible as deductions on federal income tax returns.

These aren’t clandestine tax maneuvers. Cuomo announced his intention in his State of the State Address and de Leon spelled out his plan in an interview with NPR’s Robert Siegel. Other states with legislative sessions this year may follow suit.

According to de Leon, “We have no other choice but to move forward with this type of policy because, in the end, the tax policy that was just passed in Washington will disproportionately hurt a state like California. And when you hurt a state like California, you're hurting the rest of the country, because we are the economic engine for the nation.”

One estimate indicates the limitation on state and local taxes (known as SALT) could save the federal government as much as $100 billion per year based on 2017 numbers. Democrats – and Republicans – from states with high income and property taxes claim their constituents would pay a disproportionate share of that $100 billion.

Like most tax issues, there is a lot of room to argue.

Supporters of the $10,000 SALT deduction cap contend that will cover most middle-income taxpayers who itemize expenses on their federal tax returns. Republicans say many more taxpayers will skip itemization and opt to claim the substantially higher standard deduction in the tax bill, arguably simplifying their tax returns.

Critics of the SALT limitation say it will subject middle- and upper-income taxpayers in high-tax states, including Oregon, to double taxation. Data shows 50 percent of the federal deduction for local property taxes comes from just six states – California, New York, New Jersey, Illinois, Texas and Pennsylvania.

The Cuomo-de Leon strategy seeks to exploit a 2011 IRS ruling that treats a donation to a state’s General Fund as a charitable contribution and therefore a deductible expense. De Leon contemplates a California tax scheme where every $1 in “contributed” taxes qualifies a taxpayer for a $1 tax credit.

“That is the law,” de Leon says. “That is permissible. So what we're doing is en masse taking advantage of this opportunity to do a roundabout, if you will, against policies from Washington that are very hurtful towards a state like California.”

Asked by Siegel if his scheme passes the “smell test,” de Leon said, “It does pass the smell test because we're already doing it here in California. I authored a measure back in 2014 that allows for charitable donations to state college affordability grants.” He add that other states, including red states such as Florida and Arizona, had enacted similar tax provisions.

Cuomo called the SALT deduction limit “economic civil war” as he called for “dramatic action to save ourselves and preserve our state's economy.” In addition to pursuing the tax-payment-as-contribution loophole, Cuomo said New York would pursue legal action to challenge the constitutionality of the limitation, though legal observers questioned whether legal action will succeed.

Of course, a simpler approach would be for Congress to modify the federal tax legislation to eliminate or raise the state and local tax limitation. After the dust settles and IRS rules emerge implementing provisions in the tax bill, there may be a need for what lawmakers call a technical correction bill to clean up, clarify or cashier hazy, hasty or poorly thought-through provisions.

Despite Democratic opposition to the tax-cut legislation itself, a fix that includes a modification of the SALT limitation could attract bipartisan support and easily pass.

 

Prospects for Bipartisanship in an Election Year

 Senate Majority Leader Mitch McConnell said 2018 should be a year of bipartisan compromise, but that may be easier said than done after the GOP-controlled Congress shoved through a massive tax cut at the end of 2017 and ideological differences in the House threaten to blunt deals with Senate Democrats. [Photo Credit: AP/Susan Walsh]

Senate Majority Leader Mitch McConnell said 2018 should be a year of bipartisan compromise, but that may be easier said than done after the GOP-controlled Congress shoved through a massive tax cut at the end of 2017 and ideological differences in the House threaten to blunt deals with Senate Democrats. [Photo Credit: AP/Susan Walsh]

Will 2018 be the year of congressional bipartisanship or a retreat to political trenches before the November general election? It is a critical question that could determine the shape of spending, immigration, pension protection, defense, foreign policy and border security legislation.

It is also a question of time as the Senate returns to work this week and the House comes back next week.

The next Waterloo date for Congress is January 19 when the current short-term spending measure expires. Reconciliation rules don’t apply, which means whatever legislation emerges must pass the 60-vote cloture hurdle in the Senate. Christmas has passed, so GOP congressional leaders can’t rely on Democratic reluctance to allow a holiday federal government shutdown.

Before the holiday break, Senate Majority Leader Mitch McConnell signaled a need to seek bipartisan approaches in 2018. House Speaker Paul Ryan has focused more on trimming spending on so-called entitlement programs, which is unlikely to attract much bipartisan support. Congressional Democrats can be expected to weigh compromise against electoral advantage.

There is no better example of the political watershed than Deferred Action for Childhood Arrivals (DACA). Democrats want a clean bill to secure their place in America and a path to citizenship. President Trump plopped the issue in the lap of Congress with a March 5 deadline as leverage to gain Democratic support for his promised border wall. Congressional Republicans may stop short of the Trump wall, but want fortified border security as part of any deal.

Trump gave Congress until March to reach a compromise. Latino interest groups expressed displeasure at Democratic failure to force the DACA issue in the pre-Christmas spending showdown, which foreshadows a more aggressive stance by Democrats in January negotiations. Conservative Republicans equate protection for children brought to America by their parents illegally as amnesty, which they have pledged to oppose.

There aren’t any obvious silver-bullet issues to inspire bipartisanship. The closest no-brainer issue is continued funding for the Children’s Health Insurance Program (CHIP). Before heading home for Christmas, Congress ponied up $3 billion to sustain CHIP for three months. Democrats want CHIP to continue while House Republicans appear to view it as a vehicle to dismantle additional parts of the Affordable Care Act.

During the holiday break, Democrats floated a new issue that could be a wrench in the works or a possible bargaining chip. On “Face the Nation,” Michigan Congresswoman Debbie Dingell and New York Congressman Joe Crowley called for government-backed private pension protection. Even though the recent run-up in the stock markets have boosted retirement accounts, Dingell and Crowley argued many Americans remains under water because of the Great Recession and pressure on private pensions continues to mount. The proposed solution involves government securitization of pension benefits, much like protection for savings accounts in banks, through some form of bonding. Democrats figure this issue would especially appeal to middle-class Americans.

Republicans, supported by Trump, want to boost military spending. The price for Democrats is increased social spending – or avoiding cuts in Medicaid. There eventually will be a deal on spending and an increase on the debt ceiling, but the deal that Senate Democrats would support may splinter the GOP majority in the House.

How forceful each side remains could depend on public reaction to the GOP-passed tax-cut legislation. Backers of the $1.5 trillion tax cut are counting on bolstered take-home pay as early as February to start changing American opinion about the legislation, which Democrats branded as heavily benefitting corporations and wealthier taxpayers.

If fatter paychecks turn heads, it may embolden Republicans. If the tax cuts seem insignificant, then Democrats may become more obstinate.

The congressional agenda is chocked full of other issues, including an extension of FISA court orders required to conduct domestic surveillance and additional disaster relief for states and territories hit hard by hurricanes, flooding and wildfires. Both offer some glimmer of hope for bipartisan cooperation.

Another possible bipartisan topic is stabilization of health insurance markets. Maine GOP Senator Susan Collins voted for tax-cut legislation on promises by here Republican colleagues to address the issue by agreeing to give insurers as much as $10.5 billion to compensate for coverage for high-cost and poor people. The conservative wing in the House has given that idea a cool reception as it warns about more spending driving up the federal deficit.

On philosophical grounds, the most likely bipartisan target is increased funding on infrastructure. Trump has promised to submit his plan to Congress this month and congressional leaders also have been working on proposals. Again, the pain point may be more spending and a higher deficit. That argument inevitably will revive the debate over the GOP-backed tax cut and whether it starts paying off in 2018.

A Peek Inside a Percolating Infrastructure Package

 With the tax bill passed and despite looming spending decisions, the next big thing in Congress could be the long-promised, but still percolating Trump infrastructure package.

With the tax bill passed and despite looming spending decisions, the next big thing in Congress could be the long-promised, but still percolating Trump infrastructure package.

With the tax bill in the rear-view mirror, the next big thing for Congress could be the long-promised $1 trillion Trump infrastructure package.

Based on conversations with Hill committee staff members and leaked reports, details of the package, which President Trump says he will unveil in January, are coming into view. Here is a sneak preview:

 One of the four funding pots in the Trump package would invest in innovative transportation projects such as Elon Musk’s proposed hyperloop subsonic train.

One of the four funding pots in the Trump package would invest in innovative transportation projects such as Elon Musk’s proposed hyperloop subsonic train.

  • There is a 70-page outline of the package under review in the bowels of the Office of Management and Budget.
  • Four pots of money will be created, backed by $200 billion in direct federal spending.
  • Half of the $200 billion would be distributed to states to use as financial incentives for road, transit, broadband, water and housing projects that can attract at least 80 percent of non-federal funding. This would theoretically attract $500 billion in new infrastructure investment from public and private sources.
  • A separate pot would be established for rural projects, using the more tradition 80 percent federal/20 percent non-federal funding split.
  • The third pot would be assigned to innovative projects such as Elon Musk’s hyperloop initiative or other technological advances that revolutionize transportation systems.
  • The fourth pot would add financial incentives to the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Water Infrastructure Finance and Innovation Act (WIFIA), which provide federal credit assistance in the form of loans, guarantees or lines of credit.
  • All projects receiving funding from the $200 billion would be exempt from federal requirements such as NEPA (environmental review), Davis-Bacon (prevailing wages) and Buy America.

The Trump plan would face a rough road to passage, especially in the Senate where the Republican majority has been trimmed to just 51-49. GOP congressional leaders are reportedly working on their own infrastructure proposal, with an eye on what it would take to attract at least some Democratic support.

While there will be vigorous debate over how to invest billions of dollars, the main political stumbling block will be resistance of GOP conservatives to spend more money and drive up the federal deficit even further. That stumbling block is already in the path of Congress finding a way to avoid a partial federal government shutdown by a self-imposed deadline of December 22.

Congress may skirt by the December 22 deadline by agreeing to another short-term spending resolution until January 19. Sooner or later, Congress will have to face the larger spending and deficit picture, which includes GOP demands for a major increase in defense spending, $200 billion for hurricane and wildfire relief, another $2.4 billion for the Veteran’s Choice Fund, $50 billion extension of the Children’s Health Insurance Program and continued funding for health insurance stabilization.

The spending splurge in Washington has already prompted GOP leadership to talk openly about mandatory spending cuts for SNAP, Social Security, Medicare and Medicaid. Trump’s decision to postpone signing the $1.5 trillion tax-cut bill until January is an attempt to push off mandatory cuts until 2019, after the 2018 mid-term election. GOP Senate Majority Leader Mitch McConnell has announced the Senate won’t look at what Republicans refer to as “entitlement reform” in 2018.

There also could be pushback from economists who warn that adding a major transportation bill on top of huge tax cuts intended to stimulate the economy could resurrect the sleeping bear of inflation.

Despite all that, Trump is expected to push for his infrastructure package and McConnell appears to be a willing ally. The package might be the best shot for a major bipartisan legislative effort during 2018.

 

The Unintended Legacy of the GOP Tax Cut

 Congressional Republicans are on the precipice of passing a major tax cut that modestly boosts US economic growth while achieving a lasting legacy of helping US corporations integrate even more into the global economy by keeping earnings offshore and shifting profits to tax havens.

Congressional Republicans are on the precipice of passing a major tax cut that modestly boosts US economic growth while achieving a lasting legacy of helping US corporations integrate even more into the global economy by keeping earnings offshore and shifting profits to tax havens.

Lost in the hoopla over the GOP-backed tax bill that Congress passed and sent to President Trump are statistics showing a steadily expanding global economy.

While tax bill backers promise a domestic economic boom and Trump rails against unfair trade deals, the International Money Fund reports the global economy has grown this year by 4.2 percent. That doesn’t square with all the talk of protectionism. It also suggests that the United States may not be the only kid on the block.

One reading is that the world has become more economically integrated, regardless whether political leaders like it or not. That explains why many US corporations have lobbied against major changes proposed by Trump in the North American Free Trade Agreement or why the 11 other nations that signed the Trans-Pacific Partnership are still pushing ahead even though the United States pulled out.

PwC, a British economic consultancy firm, predicts 2018 will see another expansion of the global economy that is broad-based. One exception noted by PwC will be Britain, which is facing economic headwinds as it tries to negotiate its way out of the European Union following the Brexit vote.

The statistics don’t reflect the damage to regional economies and local communities caused by globalization. But they do reflect what appears like an irreversible force toward more globalization in trade for goods and services and in capital flows.

Conservative-leaning think tanks predict the GOP tax-cut bill will promote economic growth. The Heritage Foundation projects corporate tax cuts will add to US capital stock, but also lower the numbers of hours worked, presumably because of increased investment in automation. The Tax Foundation model, a reliably aggressive pro-growth calculator, predicts tax cuts will boost US Gross Domestic Product in 2018 from 2.01 percent to 2.45 percent, far less than Republican architects of the legislation predicted and not enough to offset the increase in the federal deficit.

U-Penn's Penn-Wharton model, run by a former Bush administration economist, forecasts the GOP tax bill will increase national debt by $1.9-$2.2-trillion by 2027 – after incorporating "dynamic" estimates of economic growth effects.

Amid skepticism the tax bill will stimulate domestic economic growth, many tax advisers think the legislation’s corporate alternative minimum tax provision will encourage more, not less offshore manufacturing. The deferral of tax on foreign income will provide an incentive to keep earnings from foreign operations offshore and to shift profits to offshore tax havens. Ironically, these provisions may bolster US-benefitted global economics.

In his national security speech this week, Trump warned of intensifying economic competition in the world. His solution: To look inward. The data suggests that’s old school. Obsessing about our border security and overlooking the very economic competition he called out in his speech is a strange brew and a broken policy.

When the tax-cut legislation finally passes this week, as expected, there will be a lot of high-fives and political backslaps. Congressional Republicans will have handed Trump his first significant presidential victory and kept a promise to GOP donors.

What may follow is a political uprising over the decidedly non-populist bent of the tax bill and, eventually, an even greater gasp when the tax legislation’s greatest advance is to speed automation and engage in even greater global economic integration. Ironically, that might turn out to be the legislation’s most lasting, if unintended legacy.

 

The Wonder and Worry Surrounding Washington, DC

 The nation’s capital is preparing for Christmas, but there isn’t much cheer on Capitol Hill as lawmakers narrowly avert a government shutdown, try to unsnarl problems in tax-cut legislation and muddle through sexual misconduct scandals

The nation’s capital is preparing for Christmas, but there isn’t much cheer on Capitol Hill as lawmakers narrowly avert a government shutdown, try to unsnarl problems in tax-cut legislation and muddle through sexual misconduct scandals

Congress temporarily averted a pre-Christmas federal government shutdown by approving a two-week spending resolutionHouse and Senate conferees are trying to work out differences, including an apparent $287 billion math error, in a $1.4 trillion tax-cut measure. House Speaker Paul Ryan foreshadowed entitlement spending cuts next year to curb a ballooning federal budget deficit.

A prominent Democratic House member and senator have resigned amid sexual misconduct scandals. An Arizona GOP congressman is quitting after discussing surrogacy with two staff members. Alabama is likely to send a new senator to Washington, DC who has been accused of dating teenage girls, denies any wrongdoing and says he would bring Alabama values to Capitol Hill.

President Trump announced he will send his long-promised infrastructure funding package to Congress in January without mentioning that private activity bonds, a key financing tool for transportation and affordable housing projects, may be eviscerated beforehand in tax legislation he has championed.

Trump efforts to rewrite the North American Free Trade Agreement are faltering amid concerns by many business sectors that what Trump wants in a new deal would hurt existing trade and endanger US manufacturing jobs. The United States has walked away from a trade deal with its Pacific Rim neighbors, but the deal is not dead. Japan is leading continuing talks, which could lead to provisions less favorable to the United States and, eventually a seat at the table for China.

Ignoring warnings by top Cabinet officials, Trump recognized Jerusalem as Israel’s capital while urging progress on stalled peace talks between Israelis and Palestinians. Two days later, Palestinian leaders refused to meet with Vice President Mike Pence.

Revelations in the Russian election meddling investigation continue to roll out, inflamed by a Trump tweet, a whistleblower’s account and Donald Trump Jr. who said what he told his dad after the infamous meeting with Russians last summer was protected by attorney-client privilege.

People abroad might be excused for wondering and worrying what is happening in the United States. People who live in the United States are wondering and worrying, too.

The President goes out of his way to stir the pot – retweeting inflammatory videos, pulling the rug out from under his GOP Capitol Hill colleagues and amping up rhetoric aimed at North Korea. Congress has failed to deliver a major legislative victory to Trump in his first year in office and is still fumbling with the last-chance tax bill. A late addition to the Senate version that would retain the corporate alternative minimum tax has caused corporate leaders – putatively the biggest winners in the measure – to voice concern. Polling indicates the tax bill is unpopular, including with many Republicans.

Democrats and Republicans are growing even more polarized. After a Trump tweet, the House and Senate Democratic leaders refused to join a White House pow-wow on spending and debt ceiling legislation. Their GOP counterparts called the snub rude. Trump said Democrats were putting border security at risk.

The parties have been split over cultural issues for a long time, but sexual misconduct scandals have turned litmus tests into flash points. The resignations of Democratic Congressman John Conyers and Senator Al Franken, which were accelerated by a collective shove in their backs by fellow Democrats, put the party on presumably higher moral ground to denounce Alabama senatorial candidate Roy Moore and Trump, each of whom has been accused by multiple women for sexual misconduct. Arizona Congressman Trent Franks apparently got the message.

Ryan’s prediction that action will be needed next year to stem the budget deficit could push Congress onto third-rail political issues such as Social Security and Medicare, as well as Medicaid. Conservative GOP members want to boost military spending while trimming spending and the deficit. Democrats are pressing for more domestic spending and to keep hands off Social Security and Medicare.

It is not a pretty picture, with a bruising holiday mash-up looming between now and December 22 over a longer spending measure and an increase in the debt ceiling.

 

What Lurks in the 479-Page Senate Tax Cut?

 New Yorker Magazine’s Andy Borowitz spoofed that a child’s scribbled drawing accidentally was included in the Senate GOP tax-cut legislation. With time to read the actual 479-page bill that the Senate passed, the buried provisions might be more disturbing than a scribbled drawing.]

New Yorker Magazine’s Andy Borowitz spoofed that a child’s scribbled drawing accidentally was included in the Senate GOP tax-cut legislation. With time to read the actual 479-page bill that the Senate passed, the buried provisions might be more disturbing than a scribbled drawing.]

New Yorker Magazine’s Andy Borowitz spoofed that a scribbled drawing by one of Senate Majority Leader Mitch McConnell’s grandchildren made its way into the GOP-backed tax cut bill approved late last week. With time to read the bill this week, people may uncover a lot worse than scribbling tucked away in the Senate measure’s 477 pages.

Nothing will be final until a House-Senate conference committee resolves differences in their tax cuts and the compromise goes back to both chambers for final passage. Media coverage will focus on the size of the corporate tax rate decrease, the number of individual taxpayer brackets, the impact on the federal deficit, benefits accruing to wealthy taxpayers and the fate of the Obamacare individual health care mandate.

There also will be stories searching the shadier corners of the tax bill and how they got there.

Wielding a copy of the Senate tax bill with what appeared to be margin notes as amendments, independent Maine Senator Angus King told Face the Nation that a bill to cut corporate and individual tax rates would take, at most, 50 pages. He wondered aloud on camera what the remaining 420 or so pages contain. “We’re going to find some really stinky stuff,” King predicted, pointing to provisions dealing with oil and gas extraction.

One of the clear winners in the GOP tax-cut legislation, according to Tony Nitti writing for Forbes, are tax attorneys and CPAs. “As an American taxpayer, I’m saddened by the way the process played out. As a tax adviser, I’m downright giddy. The eventual signing of the Senate bill into law, regardless how it is ultimately married with the House bill, will signal the start of hunting season for tax professionals who…will find ample opportunity to game the system and minimize their clients’ tax liability.”

“Business owners or managers that plan well and pay for good advice will be able to achieve much more favorable rates,” Adam Looney, a senior fellow at the Brookings Institution and a former Treasury Department official, told The New York Times. “I’m not sure if that is a loophole or the intent of the legislation.”

So much for a simple tax code. But who benefits from all the complexity? Nitti offers one example. The Senate version reduces the depreciation period for rental property from 27.5 years to 25 years and excludes landlords from a limitation on mortgage interest deductions. The House version piles on landlord benefits by capping pass-through taxation at 25 percent, as opposed to the current law 39.6 percent.

Another headscratcher was a decision by Senate Republicans to retain “bonus depreciation” for corporations at the expense of retaining the corporate minimum tax.

The eventual tax bill could have unintentional effects. The Hill.com ran a story saying, “Preemptively removing private activity bonds as a financing tool for infrastructure projects would undermine the stated goal of Congress to leverage a $1 trillion investment in our nation’s infrastructure.” Eliminating the tax deduction on private activity bonds was included in the House GOP tax cut bill to save $40 billion over the next decade.

Published stories in the last few days have pointed out other buried provisions in the House and Senate tax measures:

  • Elimination of a tax credit for pharmaceutical companies to develop drugs for so-called orphan medical conditions;
  • Elimination of a tax credit to small businesses who provide accommodations for workers or customers with disabilities;
  • Elimination of the New Markets Tax Credit intended to spur investment in communities with high unemployment or poverty rates;
  • Eliminates deduction for student loan interest;
  • Eliminates deduction for sexual harassment settlements with gag orders;
  • Allows unborn children to qualify for college savings accounts;
  • Reduces taxes on beer and wine;
  • Lowers taxes on storing and staffing private jets;
  • Retains ability by banks to avoid taxes by making payments to offshore subsidiaries;
  • Allows up to $10,000 per year from 529 college savings plans to pay for religious schools and some home schooling;
  • Excludes car dealers from any limitation on interest deductions; and
  • Provides an employee credit for paid family and medical leave, except for employees in states that require paid family and medical leave.

While the merits and demerits will be discussed ad nauseam in the days ahead, the evidence is pretty clear that the legislation billed by Republicans as a middle-class tax cut is at once a whole lot more – and less – than that.

So Much Work, So Little Time

 The congressional agenda is chock-full. The congressional calendar is rapidly dwindling. Tax cuts, a spending measure and a debt ceiling increase are pending priorities, with a government shutdown looming as a possibility.

The congressional agenda is chock-full. The congressional calendar is rapidly dwindling. Tax cuts, a spending measure and a debt ceiling increase are pending priorities, with a government shutdown looming as a possibility.

With only a dozen or so working days before the holiday break and the end of the year, Congress faces a daunting agenda that keeps growing longer and more challenging.

Based on published schedules, the Senate has 15 and the House 12 working days left in 2017. In that time, GOP congressional leaders want to pass tax-cut legislation and need to take action on a spending and debt ceiling bill to prevent a government shutdown.

Mixed in the politics of all that is the Dreamer’s Act and extension of funding for the Children’s Health Insurance Program (CHIP) that expired September 30, which has created a budgetary challenge for states trying to keep the popular insurance in place until Congress acts.

Then there are the series of subplots that fill headlines and color the policies and politics on Capitol Hill:

  • The intensifying investigation into Russian election meddling;
  • The Roy Moore scandal and Senate race in Alabama;
  • Unfolding disclosures about sexual behavior by Members of Congress;
  • An attempt by the Senate to repeal the Obamacare individual health care mandate as part of tax legislation; and
  • The Federal Communication Commission’s decision to end net neutrality.

Lurking in the wings are stalled talks over revisions to the North American Free Trade Agreement (NAFTA), continuing tensions over North Korea’s nuclear capabilities and the hope for an infrastructure investment package.

Dealing with all that is more like a year’s agenda, not one for a short month.

Egged on by President Trump, Republicans want to deliver tax legislation to the White House before heading home for Christmas. While GOP leaders continue to sell the tax cut as a boon for the middle class, the push to pass it quickly is aimed at satisfying the expectations of Republican donors.

When the Senate returns to work this week, it will try to pass its version of tax legislation under special rules that prevent a Democratic filibuster. It can only lose two Republican votes. It also will vote on the bill under a cloud of criticism from economists across the ideological spectrum who say it will do little for the middle class and compromise the nation’s ability to deal with an economic downturn by sharply increasing the federal budget deficit.

If the Senate passes a tax measure, it then faces a House-Senate conference committee to iron out differences, which could highlight contentious and regionally divisive issues such as home mortgage and state and local tax deductibility.

Even though Republicans are trying to pass their tax legislation without any Democratic support, they need Democratic votes to pass a spending measure and increase the debt ceiling. The tight time frames before the holiday break amplify Democratic leverage. CHIP funding, which provides coverage for 9 million children, is one enticement the GOP is trying to use. The Dreamer’s Act could be another, but it could backfire and drive away some conservative GOP votes.

The troubled Moore Senate campaign to fill the seat formerly held by Jeff Sessions comes at an especially awkward political moment on December 12. If Moore, who faces accusations of sexual misconduct with minors, loses to Democrat Doug Jones, it will make GOP control of the Senate razor thin, which could be a factor if tax legislation gets pushed into next year.

Congress is also getting some pushback on the tax plan from corporations that have become more concerned about Trump objectives in NAFTA negotiations. A fifth round of talks among Canada, Mexico and the United States failed to produce agreement, which leaves open the possibility that Trump may unilaterally pull out of the trade deal. A business coalition led by the U.S. Chamber of Commerce has lobbied Capitol Hill in opposition to radical changes to NAFTA, warning they could lead to US job losses and ironically lead to more US manufacturing moved offshore.

The special prosecutor investigation into Russian election meddling and possible collusion by the Trump campaign has taken another ominous turn. Former National Security Advisor Michael Flynn has broken off contact with the Trump defense team, signaling a possible plea deal that involves cooperating with the special prosecutor on other targets. There have been signs Special Prosecutor Robert Mueller and his team have expanded their scope to include financial dealings by the Trump Organization with Russian oligarchs associated with money laundering.

The FCC decision to end net neutrality has stirred up a wide range of opponents who fear it will hand too much power to telecommunications companies. Supporters downplay that concern, saying it will lead to more investment in digital technology. But this isn’t just a garden-variety policy issue. Net neutrality supporters have taken to social media to voice their concerns, galvanizing many people who ordinarily shun politics. Those activated voters could make a difference in the looming 2018 mid-term election.

Budget Expert Calls Tax Plan ‘Economic Insanity’

 Stan Collender is widely regarded as a congressional budget guru. He says the GOP-backed tax cut legislation moving through Congress equates to ‘economic insanity.’

Stan Collender is widely regarded as a congressional budget guru. He says the GOP-backed tax cut legislation moving through Congress equates to ‘economic insanity.’

It’s not every day that Forbes publishes an op-ed, as it did over the weekend, proclaiming a pending congressional tax cut is the “end of all economic sanity.”

Written by veteran congressional budget analyst Stan Collender, the op-ed says Republican leaders are forging ahead on tax-cut legislation “without having any idea of what this policy will actually do to the economy.” Collender says it won’t be pretty.

Collender predicts the tax cuts will provide little economic stimulus to an already thriving economy, increase structural US deficits, raise interest rates and limit the ability of Congress to deal with economic downturns. “They [GOP congressional leaders] have wishes, hopes and prayers, but in reality nothing beyond the economic equivalent of pagan superstition.” Did we mention this op-ed was published in Forbes?

This makes Paul Krugman’s criticism of tax cuts seem timid.

Tax cut zealots may dismiss Collender as a kook. He isn’t. He has been around Congress for years, with his nose stuck under piles of congressional budgets. If you want to criticize Collender, call him a congressional budget nerd, which is what he is.

Collender’s context – the US economy, which may not be groovy for everybody, is humming along with an expanding gross domestic product, unemployment at around 4 percent and corporate profits at record levels. If there is an economic concern, it centers on lagging wage growth relative to inflation and growing income inequality. The tax measures that have passed the House and are pending in the Senate don’t address wage growth or income inequality and, in fact, may exacerbate both.

Republican leaders says Americans want a tax cut, but polling doesn’t bear that out. Even if Americans did want a broad-based tax cut, the GOP plans may not meet the mark. Benefits appear slanted toward corporations and wealthy individuals. That may not be the intent of GOP lawmakers working on the tax cuts, but impartial analysts say that would be the result.

Collender cuts even deeper. He says even though the House tax cut measure is scored as raising the US budget deficit $1.4 trillion over 10 years, the likely impact is even larger, perhaps as much as $2 trillion. That’s a byproduct of modified scoring decisions dictated by GOP political leaders.

Adding $2 trillion to the US deficit when the economy is solid doesn’t leave a lot of room for a President or Congress to stimulate the economy during an inevitable downtown, Collender says.“The federal government will have far less ability to respond to economic downturns unless previously unimaginable and politically intolerable deficits, tax increases or spending cuts suddenly become acceptable,” he predicts.

The ultimate victim, Collender says, will be programs such as Medicare, Medicaid, Social Security and even military spending. American’s ability to invest in infrastructure and research will also be severely limited. Collender labels this “economic insanity.”

If a foreign adversary proposed a strategy to strangulate the US economy, politicians would call it an act of aggression. On Capitol Hill, passing this tax policy is viewed as essential before Christmas.

 

Are We Missing a Death Threat to American Security?

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While Capitol Hill buzz centers on tax cuts and GOP Senate candidate Roy Moore’s alleged sexual abuse of teenagers, a more troubling story has quietly unfolded about the unmasking of US cyber secrets, which could expose the nation and its businesses to relentless hacks, ransoms or worse.

A group calling itself the Shadow Brokers apparently breached the cyber moat protecting the National Security Agency last year, resulting in a stream of leaked information that threatens to compromise America’s national security. It could be the equivalent of an invasion, without missiles, tanks and soldiers.

Leon Panetta, former director of the Central Intelligence Agency, told The New York Times, “These leaks have been incredibly damaging to our intelligence and cyber capabilities. The fundamental purpose of intelligence is to effectively penetrate out adversaries to gather vital intelligence. By its very nature, that only works if secrecy is maintained and our codes are protected.”

Infiltrating US cybersecurity is a lot cheaper and potentially more effective as a strategy.

Months of investigation have uncovered three leakers, but there is a lingering lack of confidence that all leakers have been discovered. The damage already done, experts say, exceeds what former NSA contractor Edward Snowden leaked, even though his disclosures earned more ink. Security experts say Snowden released code words; the Shadow Brokers shared actual code.

The Times article indicated that morale at NSA has plummeted. President Trump’s comments at the tail end of his Asia Pacific trip that expressed greater confidence in Russian President Vladimir Putin than US intelligence didn’t bolster sagging morale.

Tax cuts, universal health insurance and the size of national monuments are important issues, but none may have the long-term impact of cyber leaks. Which makes the relative silence in the White House and on Capitol Hill unnerving. It’s possible there is a high-security secret effort to counter the damage. It’s also possible top US officials are paralyzed by the staggering task of building a new, more impenetrable cybersecurity system.

One of the fundamentals of any conflict is the ability to identify the enemy. US intelligence sources pin the ultimate blame for leaks on Russian cyber operatives. Ironically, US public opinion polls show Republicans view Putin and his credibility more favorably than many Russians.

The recurring dissonance between the Trump White House and US intelligence officers in the cyber trenches adds to the puzzlement. Writings by the Shadow Brokers reflect a knowledge of US politics, using phrases like “deep state,” and seem to back Trump. One message said, “The Shadow Brokers is wanting America to be great again.”

Russian operatives can be expected to reveal US malware planted in other nations’ systems, which could further undermine the US security apparatus. There is a fear, not unjustified, that American could be blocked out of what’s happening in the world’s shadows, including nefarious activity potentially affecting US safety.

If this seems to dwarf tax cuts, the Obamacare individual mandate and Roy Moore’s sexual peccadillos in terms of significance, it does. Maintaining US security is the undisputed role and responsibility of the federal government. That security seems as tenuous today as it did when Pearl Harbor was bombed by the Japanese. Americans responded collectively to the attack in Hawaii. The response to a possible Russian cyberattack has been muted to non-existent. That is scarier than the attack.