Dear Commons Community,

The overhaul of the federal tax law in 2017 was the signature legislative achievement of Donald J. Trump’s presidency.  The biggest change to the tax code in three decades, the law slashed taxes for big companies, part of an effort to coax them to invest more in the United States and to discourage them from stashing profits in overseas tax havens.  Corporate executives, major investors and the wealthiest Americans hailed the tax cuts as a once-in-a-generation boon not only to their own fortunes but also to the United States economy.

But big companies wanted more — and, not long after the bill became law in December 2017, the Trump administration began transforming the tax package into a greater windfall for the world’s largest corporations and their shareholders. As reported by the New York Times:

The tax bills of many big companies have ended up even smaller than what was anticipated when the president signed the [2017] bill.  

One consequence is that the federal government may collect hundreds of billions of dollars less over the coming decade than previously projected. The budget deficit has jumped more than 50 percent since Mr. Trump took office and is expected to top $1 trillion in 2020, partly as a result of the tax law.

Many companies appear to have found ways around disclosing how overseas taxes will affect them.

Laws like the 2017 tax cuts are carried out by federal agencies that first must formalize them via rules and regulations. The process of writing the rules, conducted largely out of public view, can determine who wins and who loses.

Starting in early 2018, senior officials in President Trump’s Treasury Department were swarmed by lobbyists seeking to insulate companies from the few parts of the tax law that would have required them to pay more. The crush of meetings was so intense that some top Treasury officials had little time to do their jobs, according to two people familiar with the process.

The lobbyists targeted a pair of major new taxes that were supposed to raise hundreds of billions of dollars from companies that had been avoiding taxes in part by claiming their profits were earned outside the United States.

The blitz was led by a cross section of the world’s largest companies, including Anheuser-Busch, Credit Suisse, General Electric, United Technologies, Barclays, Coca-Cola, Bank of America, UBS, IBM, Kraft Heinz, Kimberly-Clark, News Corporation, Chubb, ConocoPhillips, HSBC and the American International Group.

Thanks in part to the chaotic manner in which the bill was rushed through Congress — a situation that gave the Treasury Department extra latitude to interpret a law that was, by all accounts, sloppily written — the corporate lobbying campaign was a resounding success.

Through a series of obscure regulations, the Treasury carved out exceptions to the law that mean many leading American and foreign companies will owe little or nothing in new taxes on offshore profits, according to a review of the Treasury’s rules, government lobbying records, and interviews with federal policymakers and tax experts. Companies were effectively let off the hook for tens if not hundreds of billions of taxes that they would have been required to pay.

“Treasury is gutting the new law,” said Bret Wells, a tax law professor at the University of Houston. “It is largely the top 1 percent that will disproportionately benefit — the wealthiest people in the world.”

It is the latest example of the benefits of the Republican tax package flowing disproportionately to the richest of the rich. Even a tax break that was supposed to aid poor communities — an initiative called “opportunity zones” — is being used in part to finance high-end developments in affluent neighborhoods, at times benefiting those with ties to the Trump administration.”

The entire tax overhaul on the part of Trump and the Republicans is a disgrace and even worse than originally thought!

Tony

Dear Commons Community,

The Associated Press is reporting that a private prison firm that just won multibillion-dollar contracts to run federal immigration detention centers in California sued the state yesterday, claiming that a new ban on for-profit lockups in California is unconstitutional.

The GEO Group, Inc., argued in the federal suit that Assembly Bill 32, signed by Gov. Gavin Newsom in October, would unlawfully undermine enforcement criminal and immigration law. It asks a federal court to permanently bar the law from taking effect.  As reported:

“There is a longstanding and clear-cut constitutional principle that individual states cannot regulate the actions and activities of the federal government,” the Boca Raton, Florida company said in a statement.

AB 32 bars renewal of contracts with operators of private prisons. It also bars the use of private immigration detention facilities in the state.

The suit said the law, due to take effect Jan. 1, would affect at least 10 privately-run facilities with nearly 11,000 beds. Seven are managed by GEO.

The lawsuit names Newsom and Attorney General Xavier Becerra.

Messages seeking comment from Becerra’s office were not immediately returned Monday night.

California, with its large immigrant population, is one of several states at the forefront of efforts to fight Trump administration policies over the federal detention of people who are in the country illegally. Supporters of AB 32 hoped the law would force U.S. Immigration and Customs Enforcement to look elsewhere when citing detention facilities after current contracts expire.

ICE currently has four detention centers in California, all of them operated by private companies. The federal government recently announced $6.8 billion worth of long-term contracts for the facilities in San Diego, Calexico, Adelanto and Bakersfield. The sites house about 4,000 detainees, with capacity to expand in the future.

The GEO Group Inc. won two five-year extensions — one to operate the detention center in Adelanto, with capacity for 2,690 beds, and another to run the facility in Bakersfield, with capacity for 1,800 beds. Those two contracts are worth more than $3.7 billion.

Under the new contracts, detention space in California is set to double to nearly 7,200 beds.

ICE said the contracts were not subject to the new state law, deflecting criticism that the timing was meant to circumvent it.”

As laudable as the California law is, given the fact that the lawsuit is based on federal government contracts gives the private prison companies the edge in this lawsuit.

Tony

Dear Commons Community,

CNN, NPR and The Huffington Post are reporting that more than 100 Gold Star families are  suing several American defense contractors for allegedly paying protection money to the Taliban while building projects in Afghanistan. The payments, the lawsuit argues, “aided and abetted terrorism” against Americans by enabling the Taliban to continue to fight — and kill U.S. troops.

The lawsuit was filed Friday in the U.S. District Court for the District of Columbia by the families of 143 U.S. troops and contract workers killed or wounded in Afghanistan from 2009 to 2017. They were “attacked by a Taliban-led terrorist insurgency that Defendants helped finance,” the suit states.

It’s illegal under the federal Anti-Terrorism Act to provide material support to the Taliban. The U.S. has warned defense contractors that protection payments are against the law, but according to the lawsuit, the practice has proliferated because defense contractors feel it’s a cost of doing business.

“Defendants supported the Taliban for a simple reason: Defendants were all large Western companies with lucrative businesses in post-9/11 Afghanistan, and they all paid the Taliban to refrain from attacking their business interests,” the complaint says. “Those protection payments aided and abetted terrorism by directly funding an al-Qaeda-backed Taliban insurgency that killed and injured thousands of Americans.”

According to the lawsuit, the Taliban in 2005 began systematically approaching international businesses operating in Afghanistan, and offered them a choice: pay up, or else. “Defendants paid the Taliban to leave them alone,” the suit alleges. “The payments saved Defendants money: it was cheaper to buy off the Taliban than it would have been to invest in the security necessary to mitigate the terrorists’ threats.”

NPR reached out to every company named in the lawsuit. Most did not respond. Those who did respond declined to comment. In a statement to CNN, one of the companies — Black & Veatch — said it “followed the directives of the US government agencies that we served.” The company declined to comment specifically on the allegations in the suit.

Barnett Rubin, associate director of NYU’s Center on International Cooperation, tells NPR that paying insurgents is “pretty universal” among defense contractors. It’s “the only way to get the supplies through, so the choice is funding the insurgency or not supplying the troops,” says Rubin, who formerly served as the senior adviser to the special representative for Afghanistan and Pakistan in the U.S. Department of State.

“This case is about obtaining justice for my husband’s death and the lives of so many others who were killed and injured by the terrorists in Afghanistan,” said August Cabrera in a statement. She’s the widow of Army Lt. Col. David Cabrera, believed to have been the first military social worker killed by enemy fire in the line of duty.

“The central issue here is the Pentagon’s reliance on contractors in war zones,” said Andrew Bacevich, professor emeritus of international relations and history at Boston University. “In the old days, the U.S. military when at war was largely self-sufficient. Today, the U.S. military is heavily dependent on profit-making enterprises, which inevitably privilege the bottom line over other considerations. I don’t know whether the evidence will sustain the plaintiffs in this case, but I sure wouldn’t be surprised.”

This sounds to me that the plaintiffs have a legitimate claim against these contractors!

Tony

Dear Commons Community,

The New York Times has a featured article this morning highlighting the attack on science that has occurred in the Trump administration.  In just three years, Trump appointees have diminished the role of science in federal policymaking while halting or disrupting research projects nationwide, marking a transformation of the federal government whose effects, experts say, could reverberate for years.   Here is an excerpt.

“Political appointees have shut down government studies, reduced the influence of scientists over regulatory decisions and in some cases pressured researchers not to speak publicly. The administration has particularly challenged scientific findings related to the environment and public health opposed by industries such as oil drilling and coal mining. It has also impeded research around human-caused climate change, which President Trump has dismissed despite a global scientific consensus.

But the erosion of science reaches well beyond the environment and climate: In San Francisco, a study of the effects of chemicals on pregnant women has stalled after federal funding abruptly ended. In Washington, D.C., a scientific committee that provided expertise in defending against invasive insects has been disbanded. In Kansas City, Mo., the hasty relocation of two agricultural agencies that fund crop science and study the economics of farming has led to an exodus of employees and delayed hundreds of millions of dollars in research.

“The disregard for expertise in the federal government is worse than it’s ever been,” said Michael Gerrard, director of the Sabin Center for Climate Change Law at Columbia University, which has tracked more than 200 reports of Trump administration efforts to restrict or misuse science since 2017. “It’s pervasive.”

Hundreds of scientists, many of whom say they are dismayed at seeing their work undone, are departing.

Among them is Matthew Davis, a biologist whose research on the health risks of mercury to children underpinned the first rules cutting mercury emissions from coal power plants. But last year, with a new baby of his own, he was asked to help support a rollback of those same rules. “I am now part of defending this darker, dirtier future,” he said.

This year, after a decade at the Environmental Protection Agency, Mr. Davis left.

“Regulations come and go, but the thinning out of scientific capacity in the government will take a long time to get back,” said Joel Clement, a former top climate-policy expert at the Interior Department who quit in 2017 after being reassigned to a job collecting oil and gas royalties. He is now at the Union of Concerned Scientists, an advocacy group.

Mr. Trump has consistently said that government regulations have stifled businesses and thwarted some of the administration’s core goals, such as increasing fossil-fuel production. Many of the starkest confrontations with federal scientists have involved issues like environmental oversight and energy extraction — areas where industry groups have argued that regulators have gone too far in the past.

“Businesses are finally being freed of Washington’s overreach, and the American economy is flourishing as a result,” a White House statement said last year. Asked about the role of science in policymaking, officials from the White House declined to comment on the record.”

We could not have expected less from a Trump-led administration.  Trump does not read and has no appreciation for scientific analysis that requires careful and deliberate evaluation of data and alternatives.

Tony

Dear Commons Community,

A new paper  by Federal Reserve economists, Aaron Flaaen and Justin Pierce, concludes that President Donald Trump’s trade war and his “unprecedented” increase in tariffs on foreign imports hurt the very sector he intended to boost — manufacturing — and cost American jobs.  The paper suggests the trade war approach fails to recognize the sophisticated interconnection of global supply chains that also benefits U.S. companies

“We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices,” the economists concluded.

While Trump’s tariffs did reduce competition for some industries in the U.S. market, this “small positive effect” was more than offset by rising costs that U.S. companies (and consumers) had to pay for imports and by retaliatory tariffs, the paper found.

“While the longer-term effects of the tariffs may differ from those that we estimate here, the results indicate that the tariffs, thus far, have not led to increased activity in the U.S. manufacturing sector,” according to the research.

The paper noted that U.S. manufacturing employment and output increased at a “robust pace” in 2017 through much of 2018. But since late last year, manufacturing output “declined noticeably and manufacturing employment growth has stalled.”

U.S. industries hurt most by retaliatory tariffs sparked by Trump’s trade war included leather goods; aluminum sheet, iron and steel; motor vehicles; household appliances; audio and video equipment; and computer equipment, the paper said.

An abstract of the paper is below.

Tony

————————————————————————————————————————–

Disentangling the Effects of the 2018-2019 Tariffs on a Globally Connected U.S. Manufacturing Sector

Aaron Flaaen Federal Reserve Board and

Justin Pierce Federal Reserve Board

December 23, 2019

Abstract

Since the beginning of 2018, the United States has undertaken unprecedented tariffincreases, with one goal of these actions being to boost the manufacturing sector. Inthis paper, we estimate the effect of the tariffs—including retaliatory tariffs by U.S.trading partners—on manufacturing employment, output, and producer prices. A keyfeature of our analysis is accounting for the multiple ways that tariffs might affect themanufacturing sector, including providing protection for domestic industries, raisingcosts for imported inputs, and harming competitiveness in overseas markets due toretaliatory tariffs. We find that U.S. manufacturing industries more exposed to tariffincreases experience relative reductions in employment as a positive effect from importprotection is offset by larger negative effects from rising input costs and retaliatorytariffs. Higher tariffs are also associated with relative increases in producer prices viarising input costs.

Chuck Todd

Dear Commons Community,

In an interview with Rolling Stone published last week, Chuck Todd,  the host of  Meet The Press,  said he was “ absurdly naive” about how far Republican officials were willing to go to spread the lies and disinformation that originate with President Donald Trump.

“Trump’s entire life has been spent using misinformation. His entire life. I’ve spent years studying him now on trying to figure out how did this guy even learn politics? Where did he learn?” Todd said. “And the more you learn, you realize he learned at the feet of a master of deception in Roy Cohn.

“So I mean, look, if people want to read my answer to your question, ‘Boy, that Chuck Todd was hopelessly naive.’ Yeah, it looks pretty naive. I think we all made the mistake which is when people tell you who they are, believe them.”

To illustrate his naiveté, Todd pointed to a recent interview with Sen. Ted Cruz (R-Texas), in which Cruz falsely claimed that Ukraine interfered with the 2016 election.

Cruz was the third senator to appear on Todd’s show spreading this Russian talking point, something Todd noted he “did not expect” Cruz would do. 

Todd said he was “genuinely shocked” by the claim, since the senator had spent the previous week “showcasing his hawkishness” on Russia. When Cruz’s staff approached the show, Todd said he thought Cruz wanted to further promote that point. When that “turned out not to be the case,” Todd said he finally “started to think [Cruz] wants the confrontation. He wants to use this for some sort of appeasement of the right.”

Todd admitted Cruz wasn’t the first Republican to use his show to spread disinformation. Kellyanne Conway debuted the dubious term “alternative facts” on “Meet The Press,” which is also where Trump’s personal attorney Rudy Giuliani famously declared, “Truth isn’t truth.”

“Whether we’d liked it or not, our platform has been used, or they’ve attempted to use our platform to essentially disseminate” lies, Todd said.

Todd’s interview with the magazine was published last week to promote a special episode of “Meet The Press” airing this Sunday (December 29^th).

NYU media professor Jay Rosen posted a blistering response, in which he accused Todd of “strategic blindness,” using this Upton Sinclair quote: “It is difficult to get a man to understand something when his salary depends upon his not understanding it.”

Tony

Senator Lisa Murkowski

Dear Commons Community,

U.S. Senator Lisa Murkowski, a Republican from Alaska, said she was bothered to hear Senate Majority Leader Mitch McConnell say there would be “total coordination” between the White House and the Senate over the upcoming presidential impeachment trial.

“…when I heard that I was disturbed,” Murkowski told KTUU Tuesday before saying there should be distance between the White House and the Senate in how the trial is conducted.

“To me it means that we have to take that step back from being hand in glove with the defense, and so I heard what leader McConnell had said, I happened to think that that has further confused the process.”

In a recent interview with Fox News’ Sean Hannity, McConnell, a Kentucky Republican, described his planning with the White House.

“We’ll be working through this process, hopefully in a fairly short period of time in total coordination with the White House counsel’s office and the people who are representing the president as well as the Senate,” McConnell said. 

As reported by the Associated Press: “Murkowski was critical of the impeachment process conducted in the House of Representatives, describing it as rushed.

Murkowski says the Senate is now being asked to cure deficiencies in evidence to be presented at the trial, particularly when it comes to whether key witnesses should be brought forward to testify, including White House Chief of Staff Mick Mulvaney and former national security adviser John Bolton.

“How we will deal with witnesses remains to be seen,” Murkowski said before saying the House should have gone to the courts if witnesses refused to appear before Congress.

Murkowski also spoke of her desire for a “full and fair process,” potentially using the impeachment hearings of President Clinton as a template.

Murkowski remained undecided about how she would vote when the trial takes place. “For me to prejudge and say there’s nothing there or on the other hand, he should be impeached yesterday, that’s wrong, in my view, that’s wrong.”

We could use a few more Senator Murkowskis in the Senate.

Tony

Merry Christmas

Debbie Dingell

Dear Commons Community,

Rep. Debbie Dingell, D-Mich., said yesterday that President Trump “crossed a line” when he mocked her late husband at a campaign rally, but said she doesn’t need an apology from him. Instead, the lawmaker said she hopes the episode will be a lesson for the president to “think a little more sometimes.”  As reported by Fox News and Yahoo News.

“We have to learn in our country that you can disagree agreeably. I understand that this impeachment was a very personal issue to him. But I think there are lines that you don’t cross. And I think he crossed a line there,” Dingell said on “Fox News Sunday.” “I don’t need an apology, don’t want an apology. I don’t want a campaign to begin around that. What I do want is people to take a deep breath and think going forward that their words have consequences, that they can hurt, and how do we bring more civility back to our political environment.”

While speaking at a rally in Battle Creek, Mich., last week, Trump brought up the late congressman and his widow, who now holds his seat and voted, along with almost all the House Democrats, for impeachment.

“Debbie Dingell, that’s a real beauty,” Trump said, noting he was watching her on television during the impeachment proceedings.

The president said he gave the Dingell family the “A-plus treatment” after John Dingell’s death in February, falsely claiming he allowed him to lie in state in the Capitol Rotunda. (That honor can only be bestowed by Congress. Trump did order flags at half-staff after Dingell’s death.) Trump described an emotional phone call with Debbie Dingell, in which she thanked him for his consideration and told him that her husband was looking down from heaven and “thrilled.” 

“Maybe he’s looking up,” Trump wisecracked, drawing some moans from the crowd in Michigan, a state Dingell represented for more than 59 years, although his district was in another part of the state. 

“It just sort of kicked me in the stomach” Dingell said after Wallace showed a clip of Trump’s remark. “It was a politicization of something that didn’t need to be so.”

In defense of the president, White House press secretary Stephanie Grisham called Trump a “counterpuncher,” although it wasn’t clear from her remarks whom he was punching against: the deceased lawmaker, or his widow. She said Trump was “just riffing” in the presence of “a very, very supportive and wild crowd.”

“He has been under attack, and under impeachment attack, for the last few months, and then just under attack politically for the last two and a half years. I think that as we all know, the president is a counterpuncher,” Grisham said. “It was a very, very supportive and wild crowd, and he was just riffing on some of the things that had been happening the past few days.”

When asked why Trump won’t apologize to Dingell for his comments, Vice President Mike Pence’s chief of staff, Marc Short, defended Trump, saying that while the administration respects John Dingell’s service, the late congressman was “not exactly a wallflower.”

“I’m sorry she’s hurting and I certainly wish her the best as she deals with the circumstances,” Short said when Wallace pointed out that this year, Dingell will be celebrating Christmas without her husband for the first time in 38 years. “I think that our administration respects the service of John Dingell. … We respect his service to our country in Congress, and we respect her service to our country in her following her husband in Congress. 

“But in light of where we were on Wednesday night [when the House voted to approve two articles of impeachment], I think the president was saying John Dingell was not exactly a wallflower,” Short continued. “John Dingell called the president an imbecile in his closing months. John Dingell himself as well had a lot of critical comments about the president, yet he took time to call Debbie Dingell to express his personal condolences on the passing. He lowered flags to half-mast. I think at the time and the moment the president is feeling, you know, that in the midst of an impeachment vote that that was something that came up in his rally speech.”

House members from both parties have called for Trump to apologize, but Debbie Dingell said she just hoped “something good” could come from this episode.

“This is going to be a hard holiday for me. It’s been hard, I miss him with my whole heart and soul. But if something good can come out of this, if maybe the president can think a little more sometimes. … I would like to work with the president and everyone else to be just a little be kinder,” Dingell said.”

Dingell has more class in her pinkie than Trump has in his entire bloated body.

Tony