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Published: Tue, 21 Nov 2017 00:00:00 -0500

Last Build Date: Tue, 21 Nov 2017 22:49:46 -0500


How Congress Keeps Its Sexual Harassment Hush Money Secret

Tue, 21 Nov 2017 12:18:00 -0500

BuzzFeed reported Tuesday night that the office of Rep. John Conyers (D-Mich.) paid $27,000 to settle a previously undisclosed sexual harassment complaint against the lawmaker. The story is notable not just for the allegations against a powerful member of Congress, but for shedding light on the highly opaque process through which the House of Representatives handles such settlements—and keeps them concealed. Amid the cascade of sexual harassment allegations ignited by The New York Times' exposé of Harvey Weinstein, Rep. Jackie Speier (D-Calif.) told MSNBC earlier this month that the House had paid out millions of dollars over the last decade to settle sexual harassment claims. Under public pressure, the Office of Compliance, which acts as the House's rough simulacrum of a human resources department, released documents showing it had paid out $17 million since 1997 to settle a variety of workplace claims, including sexual harassment. The details of those settlements, including their nature, are confidential. Claimants are required to sign a nondisclosure agreement to begin the lengthy mediation process. Last week Speier introduced legislation that would prohibit Congress from requiring nondisclosure agreements in such situations and would require regular reporting of settlements. "In 1995, Congress created the Office of Congressional Compliance to protect itself from being exposed, and it has been remarkably successful," Speier said in a statement. "Twenty years later, 260 settlements and more than $15 million have permanently silenced victims of all types of workplace discrimination. Zero tolerance is meaningless unless it is backed up with enforcement and accountability." "It's clear that our country is at an inflection point with respect to the behavior of powerful men across our society," says Alex Howard, deputy director of the Sunlight Foundation, a group that works for government transparency. "Congress itself is neither excluded nor sacrosanct from that reckoning, but continued secrecy will hinder public understanding of how our representatives conduct themselves in office. Ethical standards that include training, oversight, and public disclosure of all past settlements online as open data are in the public interest, and we hope that Congress does so." It's important to understand just how secretive the current House process for settling harassment claims is. In most regular cases, lawsuit settlement by the federal government go through the Treasury Department's Judgement Fund, which has an online, searchable database of payouts, filterable by agency and date. For example, the Department of Veterans Affairs has settled nearly 8,000 lawsuits between 2007 and 2016, according to records from the Judgement Fund database—most of them, unsurprisingly, for medical malpractice. It is the federal agency with the second highest number of settlement payouts, behind the Social Security Administration, which has about 13,000. But the House harassment payments described by Speier don't appear in that database. Nor do they appear in the disbursement disclosures the House is regularly required to file. Because of the provisions of the ironically named Congressional Accountability Act, settlement payment come from a special Treasury fund that the Office of Compliance draws from as necessary. The offices responsible for the payouts, and the reasons for the settlements, are kept strictly confidential. In Conyers' case, his office didn't even go through that process, according to the documents obtained by BuzzFeed: [O]ne of Conyers' former employees was offered a settlement, in exchange for her silence, that would be paid out of Conyers' taxpayer-funded office budget. His office would "rehire" the woman as a "temporary employee" despite her being directed not to come into the office or do any actual work, according to the document. The complainant would receive a total payment of $27,111.75 over the three months, after which point she would be removed from the payroll, according to the document. Because of the nondisclosure a[...]

The Good, the Bad, and the Unspeakably Ugly: A Reason Surveillance Reform Bill Primer

Tue, 21 Nov 2017 09:30:00 -0500

Before the year's end Congress needs to decide what it's going to do about Section 702 of the Foreign Intelligence Surveillance Act (FISA), which permits the federal government to engage in surveillance of foreign targets that are not on U.S. soil, secretly and without warrants. Section 702 amendments sunset at the end of the year if Congress does not act to renew it. These amendments were originally passed in 2008 and renewed in 2012. These surveillance authorities have become a source of controversy because it has become increasingly clear to the public that Section 702 has drawn in domestic communications from Americans when they were speaking with (or even just talking about) targets of foreign surveillance. There are "minimization" procedures to limit the ability of intelligence agencies from reading private communications from and by Americans without a warrant, but civil rights groups and surveillance experts have warned FBI and NSA intelligence agents bend the rules with "back door searches" and "reverse targeting" in order to keep tabs of Americans or people on American soil. Intelligence agencies have also engaged in searches "about" a subject of foreign surveillance, in addition to communications to or from the target, futher drawing in communications of Americans. The top concerns here are that the surveillance is done without warrants and overseen by the deliberately secret FISA court. The secrecy is to protect intelligence investigations and anti-terror and anti-espionage efforts. Since the intended targets are not supposed to be American citizens and not on American soil, the Fourth Amendment protections against unwarranted searches are not compromised. But when the feds access and use data from Americans, there are problems. Privacy-minded groups and some supportive lawmakers are looking to reform Section 702 to provide stronger protections for American citizens against unwarranted surveillance. The White House, however, has said they do not want any changes in Section 702, even though President Donald Trump has complained about people in his 2016 presidential campaign having their conversations collected through such surveillance. Below is a useful primer on the three Section 702 bills floating around in Congress, what each bill hopes to accomplish and a subjective assessment of its chances. It's entirely possible all three fail and a renewal with no changes is added to a must-pass, end-of-year omnibus bill. It's also possible Congress will fail to get a renewal approved and Section 702 sunsets. The Electronic Frontier Foundation, among other groups, would love to see Section 702 surveillance authorities go away entirely. But there is little evidence lawmakers are willing to take that political risk at a time of public concern over mass violence or terrorist attack within the U.S. borders. USA Liberty Act of 2017 (H.R. 3989) This is an intended "compromise" bill that has been offered up to rein in the use of unwarranted use of Americans' communications to fight domestic crimes while still allowing some access intended to assist the FBI and NSA in fighting terrorism and espionage from foreign actors. What does it actually do about surveillance? The USA Liberty Act requires federal investigators to get a court order in order to access the content of domestic communications when looking for evidence of a crime. The information accessed must be directly related to an investigation. The bill provides exceptions for getting foreign intelligence information (which is the point of the surveillance authorization in the first place), if the subject qualifies under federal law for an emergency surveillance authorization, or if the target's life is directly threatened and the information may be used to assist them. The bill creates specific procedures to document requests for the "unmasking" of the identity of an American who is referenced in these collected communications. Is it any good? The USA Liberty Act doesn't actually stop a lot of "back door" access to unwarranted domestic survei[...]

Current Farm Bill Waste Targeted as Congress Moves Toward Next Farm Bill

Sat, 18 Nov 2017 08:00:00 -0500

As Congress ramps up plans to renew the quinquennial Farm Bill next year, two separate efforts in Washington this month called for cuts to wasteful spending enabled by the stinky current Farm Bill. Both efforts—one a bill introduced last week, the other a report released this week—are making waves. The Farm Bill, in part, is intended to set federal farm policy for the next five years. While taxpayer-funded payments to farmers—farm subsidies—have under past farm bills always been wasteful, subsidies under the most recent Farm Bill grew by billions of dollars. Last week, Congress sought to rein in a portion of the out-of-control spending it enabled in 2014 when it passed the latest Farm Bill. A new, bi-partisan bill, dubbed the Harvest Price Subsidy Prohibition Act, was introduced in the Senate by Sen. Jeff Flake (R-Ariz.) and Sen. Jean Shaheen (D-N.H.). The bill—a companion was also introduced in the House—would eliminate the Harvest Price Option (HPO), a subsidy (tied to already subsidized crop insurance) that guarantees a higher price for farmers at harvest if their crop's price rose after planting. If that sounds needlessly confusing, it is. The short of it is, as Sen. Flake says, is that the HPO acts as "a taxpayer-subsidized profit guarantee." No business—small or large, farm or industrial, rural or urban—should have its profitability guaranteed by the government. Why not? "HPO is like insuring your car for $5,000, and getting a check for $10,000 after it's totaled," says Sen. Flake. "It's the kind of program that only makes sense in Washington." The HPO program has cost taxpayers more than $21 billion. Along similar lines, a report issued Tuesday by the Environmental Working Group, which monitors and criticizes farm subsidies, exposes how two other Farm Bill-enabled programs waste billions more. The EWG report, "Double Dipping: How Taxpayers Subsidize Farmers Twice for Crop Losses," focuses on two Farm Bill programs, known as Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). Farmers who receive taxpayer-subsidized crop insurance may still choose to participate in either ARC or PLC, even though "all three programs essentially pay subsidies for exactly the same reasons." According to the EWG report, hundreds of thousands of farmers have taken advantage of the loophole by double dipping. That's put American taxpayers on the hook for nearly $24 billion in unnecessary double payments to farmers. "Farm state politicians sell farm subsidy programs to taxpayers on the premise that they help keep family farmers on the land," said Don Carr, a senior advisor with the Environmental Working Group, in an email to me this week. "But when year after year the same well off mega farms enjoy millions in redundant subsidies while the bruising agriculture economy continues to drive small and mid-sized farmers out of business, it becomes clear that the original intent of these programs has strayed way of course." These out-of-control giveaways are even more galling because the current Farm Bill was touted as the one that would help rein in spending. (To be clear, though, pretty much every Farm Bill is touted by Congress and lobbyists as a cost-saving measure.) Farm Bill critics, including me, predicted growing waste under the current Farm Bill. "During the most recent debates over passage of a Farm Bill, Sen. Thad Cochran (R-Miss.) urged support for crop insurance, which he referred to as a set of 'important risk management tools for farmers and ranchers nationwide' that 'can help reduce costs,'" I detail in my recent book, Biting the Hands that Feed Us: How Fewer, Smarter Laws Would Make Our Food System More Sustainable. "Sen. Debbie Stabenow (D-Mich.), who chaired the Senate Agriculture Committee, of which Sen. Cochran is also a member, lauded the Farm Bill as 'an opportunity to cut spending.' That's not how it's worked out. Rather, costs have skyrocketed under the new Farm Bill thanks to crop insurance subsidies." Wasting taxpayer dollars is but one n[...]

Why the Senate Tax Reform Bill Is a Big Deal for Gig Economy Workers

Fri, 10 Nov 2017 10:55:00 -0500

A key provision in the tax bill that Senate Republicans unveiled yesterday clarifies the role of workers in the so-called "gig economy." It also sets up a showdown over whether platforms like Uber and Airbnb will be required to withhold taxes on behalf of their users. As I detailed in a Reason feature back in September, the current federal tax code—last updated in 1986, long before Uber, Airbnb, and the rest of the gig economy came along—fails to adequately account for the estimated 2.5 million Americans who earn income through on-demand platforms every month, according to an estimate from JP Morgan Chase. There have always been independent contractors, of course, but their numbers have shot upwards over the past decade as online platforms made it easier than ever to offer rides, lodging, or other services at the tap of an app. Many workers who sign up to drive for Lyft or sell homemade goods on Etsy are unaware that they are also signing up for a far more complex tax status by earning a few hundred dollars in a side gig. The tax debate offers a rare opportunity to fix some of these problems. The Senate version of the tax reform bill makes a solid attempt at doing that by including portions of the South Dakota Republican John Thune's New Economy Works to Guarantee Independence and Growth Act—the NEW GIG Act. Thune's legislation clarifies that gig economy workers are independent contractors, and that neither service recipients nor third party apps are employers. At the same time, the bill would require gig economy businesses to withhold income tax from their contractors—a provision that would ease the confusion facing Uber drivers who might expect income tax to be taken out of their pay in the same way it is for W-2 employees. Thune says his bill "would provide clear rules so these freelance-style workers can work as independent contractors with the peace of mind that their tax status will be respected by the IRS." Researchers at Boston College and American University have found that gig economy workers confused by their status as independent contractors, or by other elements of the tax code, often do not pay taxes at all or have to hire expensive tax help to figure out what they owe on a relatively small income. Thune's proposal would also set a new reporting threshold for all miscellaneous income earned by independent contractors. Workers who earn less than $1,000 would not have to report their income at all, while those who earn more would. Under current law, this threshold is a bit fuzzy. Some income is subject to reporting after $600 is earned, but credit card payments that total less than $200,000 do not—unless the income was earned via 200 or more separate credit card transactions. A similar bill has been introduced in the House by Rep. Tom Rice (R-S.C.) and could be incorporated in the House version of the tax bill, the Tax Cuts and Jobs Act. (The House and Senate bills both use the same name, despite some differences in substance.) The potential sticking point has to do with the idea of requiring sharing economy platforms to withhold income taxes from their users. As written, the Thune amendment would require income tax withholding as part of a three-pronged test that grants independent contractor status to gig economy workers. The platforms themselves want this clarification included in the law as a way to short-circuit lawsuits, like one already launched by Uber drivers in California, aimed at forcing them to treat workers as employees. In return for clarifying that gig economy workers are contractors, Congress appears to be saying, those platforms will have to collect income taxes from those same workers. By doing that, Congress guarentees that more taxes will be paid—rather than the current system, which relies on individual contractors to correctly calculate and pay their own taxes, something that likely shortchanges the IRS to the tune of several billion per year, according to Caroline Bruckner, managing director o[...]

Showdown Looming over Reform of Federal Surveillance Laws

Thu, 09 Nov 2017 13:10:00 -0500

The House Judiciary Committee has advanced a bill that would provide Americans modest protections from unwarranted surveillance, but falls far short of what civil liberties and privacy groups (and several legislators) demand. It's no surprise the USA Liberty Act passed out of the committee, 27-8, yesterday, having been hammered out by committee members and lawyers. But the committee resisted amendments that would make the privacy protections for Americans stronger. The USA Liberty Act is meant to address the pending sunset of Section 702 of the Foreign Intelligence Surveillance Act (FISA) Amendments. Section 702 is one of several federal authorities for foreign surveillance by the National Security Agency (NSA) and FBI to keep tabs on potential spies and terrorists. But Section 702 has also been abused, allowing for "backdoor searches" of communications of American citizens. These communications are collected "incidentally" during the surveillance of foreign targets and are used by federal agencies in the investigation of domestic crimes. All of it happens without a warrant with the oversight of the secretive FISA court. After Edward Snowden helped Americans understand the full extent to which our communications and metadata were being collected by the federal government, there's been a concerted effort by civil rights groups and lawmakers, with strong support for the Fourth Amendment, to restrain the feds. The USA Liberty Act does modestly restrict the feds and requires that they seek court orders to view these communications when looking for evidence of a crime. But it doesn't do much about the collection of the data. And there are enough exceptions to worry that little will actually change. The Electronic Frontier Foundation warns: But the warrant requirement is limited due to a number of troubling carve-outs. First, this court oversight requirement won't be triggered except for those searches conducted to find evidence of a crime. No other searches for any other purposes will require court oversight, including when spy agencies search for foreign intelligence, and when law enforcement agencies explore whether a crime occurred at all. Metadata—how many communications are sent, to whom, at what times—won't require court oversight at all. In fact, the Liberty Act doesn't include the reforms to metadata queries the House had previously passed (which unfortunately did not pass the Senate). In the Massie-Lofgren Amendment, which passed the House twice, agents who conducted queries for metadata would be required to show the metadata was relevant to an investigation. That relevance standard is not in the Liberty Act. Reps. Zoe Lofgren (D-Calif.) and Ted Poe (R-Texas), co-founders of the House's Fourth Amendment Caucus, attempted to amend the Liberty Act to end these "backdoor searches" without a warrant. Their efforts were rejected. According to The Hill, leaders of the House would not continue supporting the bill with the increased restrictions. But it's not clear that rest of the House will support the USA Liberty Act without these reforms. Several civil rights groups, like the American Civil Liberties Union, are warning the bill needs these strong protections from searches. And members of the Republican Freedom Caucus have expressed opposition to a renewal that doesn't have strong protections for Americans against unwarranted snooping. Rep. Justin Amash (R-Mich.) tweeted that the Liberty Act, as it stands now, codifies Fourth Amendment violations in searches, so we explect a "no" vote from him. Members of the Senate have their own ideas. Sens. Rand Paul (R-Ky.) and Ron Wyden (D-Ore.) have teamed up on the USA RIGHTS Act, which more thoroughly restricts and allows fewer exceptions to unwarranted surveillance against Americans. There's also the absolutely terrible legislation Senate Intelligence Chairman Richard Burr (R-N.C.) introduced, codifying for federal intelligence agencies surveillance rules without wa[...]

Law Enforcement Groups Oppose Senate Sentencing Reform Bill, Again

Wed, 08 Nov 2017 08:30:00 -0500

A group of prosecutor and police organizations are lining up again to oppose the bipartisan Sentencing Reform and Corrections Act that would reduce some federal mandatory minimum sentencing guidelines. Concerted opposition by hardline law enforcement groups and a small core of conservative Republicans helped torpedo the same bill in the last session of Congress, at the time considered by criminal justice advocates to be one of the best chances in more than a decade to pass major legislation. After the bill was initially introduced in 2015, Senate Judiciary Committee chairman Chuck Grassley (R-Iowa) and bipartisan co-sponsors watered it down significantly to assuage hardline conservatives like Sen. Tom Cotton (R-Ark.). The compromise bill would have reduced some mandatory minimum sentencing guidelines, eliminating none, and adding new ones for crimes such as interstate domestic abuse and fentanyl trafficking. The bill was reintroduced this September by Grassley and Sen. Dick Durbin (D-Ill.), but law enforcement groups still say it goes too far. In a letter to Republican and Democrat leaders on the Senate Judiciary Committee released Tuesday, the National Association of Assistant U.S. Attorneys, the National Sheriffs Association, and four other law enforcement groups warned that the proposed legislation "undermines mandatory minimum penalties for drug trafficking and weakens the tools that law enforcement authorities need to enforce the law, prosecute criminals and dismantle domestic and international drug trafficking organizations." The letter cites rising violent crime in some major cities and "a national epidemic of overdose deaths, caused largely by heroin and opioid drug abuse," as a reason not to take those tools away. Families Against Mandatory Minimums (FAMM), and other advocacy groups have long argued federal mandatory minimum sentencing guidelines are incredibly punitive and an ineffective crime deterrent. "These groups are making a strange argument: We have the worst drug overdose crisis in history and so we should keep doing exactly what we are doing," says Kevin Ring, the president of FAMM. "This letter comes on the heels of a new report by the US Sentencing Commission, which concluded that mandatory minimum sentences are being applied to too many low-level drug offenders. Senator Grassley's bill actually addresses that misuse of resources." Law enforcement groups not only want the U.S. to continue its current criminal justice policies; they contend the relatively modest drop in the federal prison population is, in part, responsible for the rise in violent crime rates nationally. "Misguided legislation like the Sentencing Reform and Corrections Act comes about when myth and misunderstanding overwhelm fact and reality," the letter says. "The assertion that the federal prison population is exploding is myth; the federal prison population is, in fact, decreasing and the rate of decrease—and the likely relationship to the rise in violent crime—will only accelerate as early releases continue as a result of unworthy changes." U.S. Attorney General Jeff Sessions has in many of his public speeches and written op-eds explicitly linked the drop in federal prison population—a result of several changes to prosecutor charging policies for drug offenses under former Attorney General Eric Holder—to the rise in crime rates. As my Reason colleague Jacob Sullum has explained, it's nonsensical to attribute a modest drop in the federal prison population, accounting for 14 percent of the 2.2 million incarcerated people in the U.S., to a national crime wave: Even if we assume that every drug offender who got relief under Holder's policy was a violent predator in disguise, there were not enough of them, and they would not have been free soon enough, to have any noticeable impact on the crime rate. Perhaps Sessions means that other criminals, taking note of the fact that some federal drug [...]

The NFL Wants to Block Tax Reform Because It Would End a Common Stadium Subsidy

Sun, 05 Nov 2017 11:10:00 -0500

The tax reform bill unveiled this week by House Republicans would do away with the federal tax exemption for municipal bonds, commonly claimed by states and cities to subsidize the construction of stadiums. The National Football League is gearing up big time to lobby against it, The Wall Street Journal reported this week. Municipal bonds were made tax exempt in 1986 as a way to encourage investors to buy them at lower interest rates, saving cities money when they need to build new infrastructure or make expensive repairs. While the bonds are designed for building roads, sewer systems, and schools, cities have issued more than $13 billion in untaxed bonds for stadium projects since 2000, according to a recent Brookings Institute estimate. That tax break is "an unseen subsidy," according to Victor Matheson, a sports economist at the College of the Holy Cross, who is critical of using public money for stadiums. "It's a tax break that we never get to vote on, and it's one that don't even think about and don't see," he told Reason in June. There's bipartisan support for directing the exemption specifically for public infrastructure, rather than multi-billion dollar playgrounds for multi-millionaire athletes and billionaire franchise owners. Sens. Cory Booker (D–N.J.) and James Lankford (R–Okla.) in June introduced an independent piece of legislation to prohibit local officials from using municipal bonds for stadium projects. If that prohibition becomes law—either on its own or as part of a revamped federal tax code—those "unseen subsidies" would go away and the cost of those projects would increase. So, too, would public opposition to spending public money on stadiums. "It's something that the NFL will oppose because we believe that the construction of new stadiums and renovations of stadiums are economic drivers in local communities," NFL spokesman Joe Lockhart tells the Journal's Andrew Beaton. The 32 team owners who make up "the NFL" in this context are allowed to believe whatever they want, but the idea that new stadiums or renovations are economic drivers is not supported by facts. A landmark study published in 2000 by the Journal of Economic Perspectives reviewed 36 major metropolitan areas that had built stadiums for professional sports teams and found that, on the whole, they represented a drag on the economy. More recently, a 2015 study by the Stanford Institute for Economic Policy Research, found that "NFL stadiums do not generate significant local economic growth, and the incremental tax revenue is not sufficient to cover any significant financial contribution by the city." Local governments, however, continue to put taxpayers on the hook for football stadiums. In his book The King of Sports: Football's Impact on America, Gregg Easterbrook, a journalist and longtime critic of taxpayer subsidies for the sport, says taxpayers have covered more than 70 percent of the total cost of NFL stadiums built in the past two decades. Maybe we're heading toward the end of that tradition. President Donald Trump, in between tweeting criticisms of NFL players kneeling during the national anthem to protest police abuse, has whacked the NFL for taking advantage of special loopholes in the tax code. "Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law!" Trump tweeted in October. Why is the NFL getting massive tax breaks while at the same time disrespecting our Anthem, Flag and Country? Change tax law! — Donald J. Trump (@realDonaldTrump) October 10, 2017 President Barack Obama proposed eliminating tax exemptions for municipal bonds attached to stadium projects as part of his 2015 budget plan, but Congress didn't bite. Maybe, as part of a comprehensive tax reform bill, that component has a better chance of reaching Trump's desk. For decades, the NFL operated as a tax-exempt entity—insert jok[...]

Five Important Details from the GOP Tax Plan

Thu, 02 Nov 2017 15:45:00 -0400

Republicans have been talking about reforming the tax code since well before the start of the year. Today we finally got a look at their proposal. Here's five important details from the bill—with the important caveat that just about everything in it could be subject to change after it is introduced: 1. Fewer Income Tax Brackets The current individual income tax system has seven brackets, with rates ranging from 10 percent to 39.6 percent. The highest bracket applies to income over $418,000 annually for individuals, or $470,000 annually for married couples. In the GOP tax bill, those seven brackets would be collapsed to four brackets, with rates of 12 percent, 25 percent, 35 percent, and 39.6 percent. The highest rate would kick in at $500,000 for an individual or $1 million for a married couple filing jointly. Most people would see a small income tax reduction, though some people might end up paying a slightly higher rate depending on where they fall on the current spectrum. Republicans propose collapsing seven tax brackets into four. See the rates and brackets in the bill. — Wall Street Journal (@WSJ) November 2, 2017 But that's not the most important detail for individuals and families. The bigger news is... 2. A Much Higher Standard Deduction Yes, the government is going to let you keep more of your own money. How generous, right? Currently, individuals can claim a standard deduction of $6,350 and married couples get a deduction of $12,700. Under the House GOP plan, the standard deduction would rise to $12,000 for individual filers and $24,000 for married couples. That means more people will likely choose to take the standard deduction instead of itemizing their deductions, which Republicans say will simplify the tax filing process. But does it really? About 70 percent of Americans already use the standard deduction, and high-income earners tend to be the only ones who itemize. A higher deduction is nice for everyone, of course, but it won't make much of a different in how most people put their taxes together. 3. No Changes for 401(k) Savings, But a New Cap on the Mortgage Deduction As I wrote yesterday, there was a fair bit of speculation about whether the Republican tax plan would lower or eliminate the current deduction for retirement savings, which encourages people to, well, save for retirement. The bill released Thursday makes no changes to how 401(k) plans operate, so that deduction remains in place. But another major deduction in the current tax code—the one that allows homeowners to subtract mortgage interest from their taxable income—would be altered. Republicans would cap the mortgage interest deduction at $500,000 for new home loans starting next year. That's something the construction industry will almost certainly lobby to change as the tax bill goes forward, but it would affect only about 5 percent of all homebuyers. Only about 5% of US mortgages are over $500k. But take a look at where they are in the US... (good chart via @NLIHC) — Heather Long (@byHeatherLong) November 2, 2017 4. Corporate Income Tax Rate Cut From 35 Percent to 20 Percent Maybe the most important part of the tax bill, politically, is the proposed cut to the corporate net income tax. The current rate of 35 percent would be reduced to 20 percent, something Speaker of the House Paul Ryan (R-Wisc.) said today will be essential to keeping America competitive in the global economy. This has been the centerpiece of the Republican tax agenda since last year's election (and indeed longer). If there is one thing that unites the varied factions of the Republican Party, it's the notion that taxes on American businesses should be reduced. All the changes—mostly rather mild changes—to the individual income tax system are best understood as a way to sell this corporate income tax cut to voters.[...]

Did Trump's Ex-Im Bank Nominee Flip-Flop or Is He Being a 'Trojan Horse'?

Thu, 02 Nov 2017 11:30:00 -0400

It's difficult to know what Scott Garrett professes to believe about the Export-Import Bank. Back when he was a member of Congress representing New Jersey, Garrett was one of the loudest critics of the credit agency and fought a losing battle against its reauthorization in 2015. Now that he's been tapped by President Donald Trump to head the Ex-Im Bank, Garrett is singing a different tune. Prior to a confirmation hearing on Wednesday, Garrett released a written statement saying he is committed to supporting President Trump's agenda of boosting the manufacturing industry—and that he now supports the Ex-Im Bank's mission, most of which consists of passing out government-backed loans to politically-connected firms. Is this a standard issue flip-flop? A politician changing his point of view when a new job comes along is certainly not unheard of. Democrats, though, suspect there's an additional level of subterfuge at work here. During the hearing, when asked if he'd retract previous statements on the Ex-Im Bank, Garrett didn't directly answer the question, stating that if confirmed he'd execute the law in accordance to the reforms passed in 2015. "I don't quite know where to go with that." Sen. Sherrod Brown, D-Ohio said, "So you've changed your position just to be confirmed?" "Senator," Garrett responded, "if the question is what has changed since 2015, what we have seen change, is a new administration. What we have seen change is a new agenda… to see to it that the economy actually grows and that businesses are given a fair chance to grow their businesses both nationally and internationally." Since 2015, the Export-Import Bank's board has been largely vacant, impeding its ability to approve loans of over $10 million. The committee did not vote on Garrett's nomination, but is expected to make a recommendation later this month. Garrett's testimony stands in sharp contrast to the speech he gave two years ago, with no political appointment on the line. "We have the opportunity to protect the American taxpayer, and the American Dream and to preserve free enterprise," Garrett said then. "We have the opportunity today to keep the Export-Import Bank out of business. We should take each of those opportunities." The Export-Import Bank has long been criticized for guaranteeing taxpayer-financed loans that favor large American corporations exporting to foreign countries. It has been derided as "Boeing's Bank," because the multinational airplane manufacturing corporation receives 40 percent of the agency's resources. Only 23 percent of the budget is devoted to loans to small businesses, according to Veronique de Rugy, a senior research fellow at the Mercatus Center. When Trump nominated Garrett to head Ex-Im Bank, corporations pushed back. Representatives from both the Aerospace Industries Association and National Association of Manufacturers, called on the Trump administration to withdraw the nomination, fearing he'd be an impediment to the bank's future. Fellow Republicans don't seem to know what to make of Garrett's about-face, either. "If you're going to be a Trojan horse," Sen. Lindsey Graham, (R-S.C.), warned Garrett, "you won't get confirmed." src="" allowfullscreen="allowfullscreen" width="560" height="340" frameborder="0">[...]

UPDATE: Congressional Republicans (and Maybe Donald Trump Too) Could Be Coming For Your 401(k)

Wed, 01 Nov 2017 11:10:00 -0400

House leaders say a bill will rewriting the federal tax code will be released tomorrow. One idea reportedly being considered for it could imperil a key incentive to save for retirement. President Donald Trump and Republican leaders in Congress had promised not to mess with how 401(k) plans operate or to change the current tax deduction for contributions to those retirement accounts. Last week, however, the president suggested that he may be willing to ignore that promise. "Maybe we'll use it as negotiating," Trump said. If nothing else, that demonstrates the difficulties Republicans have had in passing major legislation. Saying publicly that you might use something as a negotiating tactic is, in fact, not a great negotiating tactic. And politics aside, rolling back 401(k) deductions is a bad idea on the merits. Any comprehensive tax reform plan is going to have significant consequences—both intended and unintended—for how Americans save for retirement. The very existence of 401(k) retirement plans is, in fact, one of those unintended consequences. That section of the tax code was written in the 1970s as a special favor to high-earning executives who wanted to avoid taxes on the part of their income that they invested in the stock market. In 1980, Ted Benna, a retirement consultant working for The Johnson Companies, realized that any employee could use that same provision to make investments with pre-tax dollars, and the 401(k) retirement plan was born. Today more than 55 million American workers have 401(k) retirement plans containing over $5 trillion in savings, according to the U.S. Department of Labor. Under current law, workers can contribute up to $18,000 a year to their retirement plans, tax-free. So if someone earning $100,000 a year, subject to a 28 percent federal marginal tax rate, contributes $10,000 annually to a 401(k) plan, she reduces her taxable income to $90,000 for the year. That level of income is taxed at 25 percent by the federal government, so the worker's tax liability (absent other deductions and credits) would drop from about $21,000 to around $18,000.* According to data from the Congressional Joint Committee on Taxation, as reported by The New York Times, the 401(k) tax break cost the federal government more than $115 billion in revenue during the current fiscal year. As Congress mulls a $6 trillion federal tax cut, some legislators—includinRep. Kevin Brady (R-Texas), who chairs the key House Ways and Means Committee—have been eyeing 401(k) contributions as a way to "pay for" tax reform. Lowering the threshold for tax-free retirement contributions, potentially to as low as $2,400 a year, would allow Congress to offset tax cuts elsewhere. [Update: ABC News, citing sources familiar with the tax bill, reports that the proposal would "lower what individuals may contribute tax-free to their 401(k)s, to an amount about halfway between the current limit and what House Republicans initially proposed."] There is, of course, a better way to "pay for" tax cuts: Cut spending. Lowering or eliminating the 401(k) deduction will likely make it harder for workers to save for retirement, something many Americans are already struggling to do. While 401(k) plans have hit record levels in recent years, the average account holds less than $100,000—an inadequate amount for an individual's retirement. Unlike tax breaks that benefit only a small set of individuals or businesses—or even more broad-based tax breaks, like ones targeted for homeowners and children—the exemption for retirement savings helps just about everyone. Aging isn't a choice, and retirement is something that virtually everyone hopes to enjoy. Rationally, people should be motivated to save for retirement whether they are getting a tax break to do so or not. Unfortunately, that's not necessarily ho[...]

It's Past Time for a New Vote on the War on Terror

Tue, 31 Oct 2017 14:00:00 -0400

The White House is pushing back against the idea that it needs a renewed authorization for the use of military force (AUMF) to cover the ongoing military response to the Islamic State in Iraq and Syria (ISIS). The administration is apparently concerned that a new AUMF would impose limits on its military actions around the world. Well, yes. That's the whole point. The AUMF passed after 9/11 was meant to target Al Qaeda, the Taliban in Afghanistan, and their "associated forces"—the groups the U.S. held responsible for the September 11 attacks. Since then, the executive branch has invoked the AUMF to justify almost every military intervention that Washington has undertaken. The two major exceptions are the Iraq War of 2003–2011, for which President George W. Bush sought and received a specific AUMF, and the intervention in Libya, which saw President Barack Obama waving away his lack of authorization by citing support from the United Nations and other international bodies. Both misadventures show why it's important for Congress to assert its role in the war-making process. In the first case, the Iraq-specific AUMF helped to define the administration's rationales and goals for war, and it placed members of Congress on the record for or against the conflict. This made it easier to hold the administration accountable to its own terms, and it gave voters some insight into their representatives' stances. The lack of an AUMF in Libya, on the other hand, made it even more difficult for Congress to exercise substantive oversight of the conflict. It also ensured that there would be little to no accountability for anyone in the Obama administration for the failures in the Libya campaign and the mess the U.S. helped to make. Unfortunately, if a Republican-controlled Congress was unable to exert any oversight over the wars of a Democratic president they campaigned against in almost every other policy domain, and who said he welcomed a new AUMF, it's even less likely to do any of those things with a Republican president in charge. This is particularly disappointing given that both Obama and the 114th Congress knew pretty early last year that there was a 99.99 percent chance the next president would be either Donald Trump or Hillary Clinton. Obama spent the campaign warning Americans that Trump was "uniquely unqualified" for the office of the president, while Republicans had spent years up to that point investigating Clinton's blunders in Libya and elsewhere. Yet they did nothing to impose those missing limits. Even after the "uniquely unqualified" Trump was elected, Obama made no effort to impose any limits on his successor. Instead he declared that the 9/11 AUMF also covers U.S. operations in Somalia. As he has elsewhere in the war on terror, Trump then ramped up the intervention. At this point Trump, who on the campaign trail said he'd be open to an AUMF—Trump took a lot of positions on the campaign trail, not all of them consistent with one another—may be the only one who could make congressional oversight or limits on the war on terror possible. Not by supporting for such a move again (that's highly unlikely) but by alienating members of Congress enough that they finally assert their constitutional role. The most recent effort to pass a new AUMF is being led by Sens. Tim Kaine (D-Va.) and Jeff Flake (R-Ariz.), who last tried to pass a new AUMF in mid-2015.[...]

The Real Insult to the Troops Is Rudderless Military Adventurism

Wed, 18 Oct 2017 15:57:00 -0400

(image) Several pundits, members of Congress, and former Obama officials have worked themselves up over President Donald Trump's latest perceived slight to military families. But the far greater and more persistent slight comes from a rudderless U.S. foreign policy whose pointless military interventions lead inevitably to needless deaths.

Had Trump not botched the landing so tremendously on calling the families of the four soldiers killed in Niger two weeks ago, the incident, and America's presence in the landlocked West African country, would have been forgotten by most Americans.

Instead, we've plunged into a he-said/she-said over what exactly Trump told the widow of one of the soldiers killed in Niger. The widow's congresswoman, Democrat Frederica Wilson, was in the car while Trump was on speakerphone and claims he told the woman her husband "knew what he signed up for." Trump denies it; the soldier's mother backs up Wilson's account. All of which ignores the question of what exactly the U.S. is doing in Niger in the first place.

U.S. operations in Niger, ongoing since the Bush II era, have been a bipartisan failure of strategy and accountability. Troops were first sent to Niger in 2005 to "assist" French and local counterterrorist efforts. The Bush administration never bothered to seek congressional authorization, nor to claim that the post-9/11 authorization for the use of military force (AUMF) covered the effort. When Obama sent additional troops to the country in 2013, that move came with no congressional input or substantive public debate either.

Most members of Congress are more comfortable getting outraged at Trump being a boor than asserting their constitutional role in making U.S. war policy. The best way to honor soldiers' sacrifices is to put some limits on America's war machine.

For 16 years now, successive presidents have used the post-9/11 AUMF to wage war around the world. The U.S. deployed troops first to Afghanistan—now home to the longest war in American history—and then to the Philippines, Georgia, Yemen, Djibouti, Kenya, Ethiopia, Eritrea, Iraq (for the ISIS mission), Syria, Somalia, and who knows where else.

The only member of Congress to vote against the AUMF was Rep. Barbara Lee (D-Calif.), who warned presciently that the bill would be a blank check for the executive branch to wage war around the world. Her most recent effort to set an expiration date on the 2001 AUMF was killed by the House Republican leadership without a debate or a vote on the floor.

Congress' unwillingness to check the executive's military actions is far more disrespectful to the troops than anyone's careless words can be on their own, even the president's.

Congressional Republicans Aim to Loosen Rules Restricting Export-Import Bank Cronyism

Wed, 18 Oct 2017 13:46:00 -0400

Congress is trying to open a huge loophole in the rules governing the Export-Import Bank, one of the federal government's most crony-capitalist institutions. The bank gives taxpayer-backed guaranteed loans to corporations doing business in foreign countries. But thanks to a reform adopted in 2015, it can't give loans of more than $10 million without the consent of three of the five members of its board of directors—a stumbling block, since the agency's board has been largely vacant for the last two years. With President Donald Trump's nominations to Ex-Im Bank stalled for now, the corporatists have been looking for a workaround. Their solution: If the rules are a problem, change them. Rep. Charlie Dent (R-Pa.) along with 30 other Republicans have proposed a bill to let the Ex-Im Bank remove the three-out-of-five rule. "The bank is a critical lifeline for many manufacturers, large and small, in maintaining their competitiveness in international markets and it is past time that its doors are open," said Dent in a released statement. These are common claims in defense of the agency. In reality, only 25 percent of the Ex-Im Bank's activities go towards small businesses. Most of its financing goes to large corporations. Many of the companies that have benefited in the past from the Export-Import Bank have remained steady on their own two feet without its assistance in the last two years. Apparently, they don't have trouble finding lenders in the private sector. Less than 1 percent of small business jobs in the American economy rely on Ex-Im Bank. Ten companies account for over 60 percent of the agency's resources. Boeing alone gets 40 percent, leading many to nickname Ex-Im "Boeing's bank." This isn't the first time Rep. Dent has attempted to make it easier for Ex-Im Bank to make loans without a quorum. In July 2016 he added an amendment to an appropriation bill with similar aims. In July 2017 he made a similar attempt. Last month he tried again, only to be thwarted by the House Financial Services Committee. Dent has now announced his intent to retire from Congress, but he seems intent on giving the bank a boost before his term ends in 2018. Other Republicans see the Im-Ex Bank differently. Rep. Justin Amash (R-Mich.) attempted to eliminate the Ex-Im Bank this past summer, but he wasn't able to get the votes. Former Rep. Scott Garrett (R-N.J.), Trump's recent nominee to the board of the Ex-Im Bank, has been a sharp critic of the credit agency over his 15 years in Congress. In a 2015 speech, Garrett called Ex-Im Bank "corporate welfare" and "a bank that embodies the corruption of the free enterprise system." Trump was also critical of the agency when he was campaigning for president. Once he got the job, his tune changed. His predecessor did a similar flip-flop. It remains to be seen if the same will be true of Garrett.[...]

Congress Could Let All Patients Have the 'Right to Try' Without Going Through the FDA's Complicated Application Process

Tue, 03 Oct 2017 17:25:00 -0400

It is a rare thing to see Congress pass a law that increases personal freedom. Yet that is exactly what it could do later this fall if the House follows the Senate's lead on a so-called "Right to Try" bill. The law would allow individuals with terminal illnesses, without having to first get permission from the Food and Drug Administration, to try drugs that have not been approved. Since 2012, 37 states have adopted "right to try" laws, giving patients to access experimental treatments that have cleared the first phase of the FDA's trials, with the permission of a doctor. Passing a law at the federal level would be important for residents of those remaining 13 states, but would also help steer FDA policy, advocates say. "Right to try is about the terminal patients who don't fit into a control group, who can't afford to travel or move to another country, and who simply want permission to seek the same treatments that other patients—sometimes patients in the same medical facility—are already receiving," says Naomi Lopez Bauman, director of healthcare policy for the Goldwater Institute, an Arizona-based free market think tank that has largely spearheaded the state-level Right to Try movement. The U.S. Senate in August passed—by unanimous consent—Senate Bill 204, a right to try bill sponsored by Sen. Ron Johnson, R-Wis. That bill, and a similar proposal sponsored by Rep. Morgan Griffith, R-Va., were the subject of a hearing hosted Tuesday by the House Committee on Energy and Commerce. There is no immediate timetable for either bill to receive a vote on the House floor, and Tuesday's hearing made clear that right to try legislation faces more opposition in the lower chamber than it did in the Senate. "The legislation being proposed could expose critically ill patients to greater harm," worries Rep. Frank Pallone, D-N.J., minority chairman of the committee. Other Democrats expressed similar worries, even while expressing sympathy for patients who are asking little more than for government to get out of the way during the final days of their lives. There are "very legitimate frustrations with the current system," for allowing patients access ot non-FDA-approved drugs, admitted Rep. Gene Green, D-Texas. But those problems are not a good reason to remove the FDA from the process, Green said. Currently, the FDA runs a so-called "expanded access" program for terminally ill patients who cannot get into drug trials for various reasons. According to a Government Accountability Office report published in July, FDA had approved 99 percent of the 5,800 requests made from 2012 through 2015 by patients seeking access to the program. Lack of access, then, is not the problem, but time is. Patients with terminal illnesses can wait as little as a few hours to as long as 30 days for the FDA to respond to a request to try a new drug, according to the GAO, and that wait could ending any slim hope of finding a successful treatment. If you think dealing with bureaucrats is awful when you're standing in line at the DMV or applying for a passport, imagine having to go through that same process when your life is on the line. Under Scott Gottlieb, the newly appointed commissioner of the FDA, the administration has moved to slash the amount of paperwork necessary to get patients enrolled in expanded access programs. Earlier Tuesday, Gottlieb announced further reforms to streamline the experimental treatment review process for patients and doctors. The FDA "believes difficult decisions about individual treatment are best made by patients with the support and guidance of their treating physicians," Gottlieb told the committee Tuesday. Those welcome changes do not accomplish as much as a federal right[...]

House Passes Bill Making Abortion After 20 Weeks a Federal Crime

Tue, 03 Oct 2017 08:36:00 -0400


Update: On Tuesday afternoon, the bill passed the House 237 to 189.

Third time's a charm? The U.S. House of Representatives is considering "The Pain-Capable Unborn Child Protection Act," a bill to ban abortion after 20 weeks, for the third time since 2013. But this time, the White House has signaled full support for the bill.

Under the new legislation (H.R. 36), abortion after 20 weeks pregnancy would be a crime except in cases where the life of the mother is at risk or the pregnancy is a product of rape or incest. Pregnant women who find out after the cutoff that they are carrying an nonviable fetus (i.e., one that cannot survive outside the womb) would still be forced to carry the fetus to term.

While women seeking an abortion after 20 weeks would not be criminalized under federal law, anyone who performed or agreed to perform an abortion on someone more than 20 weeks pregnant would face five years in federal prison, a fine, or both. "A woman who undergoes a prohibited abortion may not be prosecuted for violating or conspiring to violate the provisions of this bill," it states.

The failure to directly criminalize women may seem like a bright spot. But in this way the bill not only restricts women's control over their own bodies and reproductive futures but also takes a pass at their agency, declaring us too morally or intellectually inferior to know what we are doing and be held responsible for our decisions. In fact, under Republicans' new proposal, a woman who seeks out an abortion after 20 weeks and finds a doctor to do it may then sue the abortion doctor in civil court.

From a philosophical standpoint, it's bullshit—but from a political point, it makes sense. Republicans know that if they start throwing women in jail for terminating their pregnancies, they would lose a lot of centrist support; not so if they can make this about punishing evil "abortionists" that prey on poor pregnant women.

In a statement Monday, the Trump administration said it "strongly supports H.R. 36, the Pain-Capable Unborn Child Protection Act, and applauds the House of Representatives for continuing its efforts to secure critical pro-life protections."

But while conservative representatives and President Trump may be enthused about the proposed abortion ban, the Senate has indicated that now is not the time. On Monday, Republican Sen. John Cornyn (R-Texas) said taking up the abortion bill was "not a near-term priority."