Category: “Dead Skunk in The Middle of The Road”

President Donald Trump has officially granted the Department of Defense the legal authority to abolish the collective bargaining rights of its civilian labor unions representing some 750,000 workers.

Gutting the unions would provide “maximum flexibility,” Trump wrote in a memo published Thursday in the Federal Register, which was first reported by Government Executive.

Trump signed the memo three weeks ago, invoking “national security” to justify granting the Defense Department an exemption from the law giving all federal workers the right to unionize.

“When new missions emerge or existing ones evolve, the Department of Defense requires maximum flexibility to respond to threats to carry out its mission of protecting the American people,” Trump wrote in the memo. “Where collective bargaining is incompatible with these organizations’ missions, the Department of Defense should not be forced to sacrifice its national security mission.”

The 1978 Civil Service Reform Act contains a provision that allows a president to exclude agencies from engaging in collective bargaining with workers via written order in some circumstances, including “an emergency situation.”

Trump’s assault on unions contradicts his frequent claims to his base of supporting voters that he is a champion of the working class. A 2017 White House memo encouraged “eliminating employee unions” as part of a wide-ranging effort to weaken organized labor. Trump’s budget for fiscal 2021 would require federal workers to pay more for a cut in retirement benefits.

It’s not yet clear what Defense Secretary Mark Esper will do.

Labor leaders, workers and politicians have railed against the declaration.

“Denying … Defense Department workers the collective bargaining rights guaranteed to them by law since 1962 would be a travesty — and doing it under the guise of ‘national security’ would be a disgrace,” Everett Kelley, national secretary-treasurer of the American Federation of Government Employees, said at a legislative conference earlier this month, according to The Washington Post. “This administration will not stop until it takes away all workers’ rights to form and join a union — and we will not stop doing everything we can to prevent that from happening.”

The president’s official schedule shows him spending two and a half hours Sunday evening at a “Super Bowl LIV watch party” at Trump International Golf Club in West Palm Beach. Tickets sold for $75 each, but were only available to members of the club — the initiation fee for which reportedly runs about $450,000, with annual dues costing several thousands of dollars more.

“Well, obviously there are no TVs in the White House, so what alternative did he have?” quipped Robert Weissman, president of the liberal group Public Citizen. “He could have saved money by chartering a plane and flying club members to watch the game at the White House.”

In response to a query, White House press secretary Stephanie Grisham defended Trump’s trip and attacked HuffPost: “The premise of your story is ridiculous and false, and just more left-wing media bias on display. The president never stops working, and that includes when he is at the Winter White House.”

Her phrase “Winter White House” refers to Mar-a-Lago, the for-profit resort in Palm Beach that is several miles east of the golf course and that doubled its initiation fee from $100,000 to $200,000 after Trump was elected in 2016. Trump frequently mingles with guests at social events there.

On Saturday, for example, Trump appeared at a dinner at Mar-a-Lago arranged by the “trumpettes,” a group of his female supporters. The dinner did not appear on the president’s publicly released schedule, and in any case was a campaign event, not an “official” one.

When a pool reporter asked the White House on Saturday what work Trump did over the weekend, the reply was that he had calls and “meetings with staff.” The president did not attend a rally on Saturday for Venezuelan leader Juan Guaido, whom the United States and other governments have recognized as the legitimate president of that country. That rally began while Trump was still at his golf course, and attending it could have made him late for the start of the Trumpettes’ dinner.

Trump promised during his presidential campaign that he would separate himself from his businesses if he won. However, he reneged on that vow, as well as on his promise to release his tax returns.

On his most recent financial disclosure form, which was filed last May, Trump claimed he had received $12,325,355 in income from the West Palm Beach golf course over the previous year. It’s unclear how accurate that is, given Trump’s tendency to file widely varying figures to different government authorities.

He told the U.S. Office of Government Ethics in his 2018 financial disclosure, for example, that his Scotland golf courses are worth more than $50 million each, even as he told authorities in the United Kingdom that they had a combined net debt of $65 million.

In any event, money spent at Trump hotels and golf courses flows directly to the president, as he is the sole beneficiary of a trust that now owns his family business. U.S. taxpayers have been the source of at least a few million dollars that have gone to the Trump Organization in the form of hotel rooms, meals and other expenses for Secret Service agents and other government employees who have stayed on-site with Trump in Florida, New Jersey, Scotland and Ireland.

“When Donald Trump announced that he would break decades of precedent and hold onto his business, many were afraid it was to find ways to keep making money on the side of his work as president,” said Jordan Libowitz with the group Citizens for Responsibility and Ethics in Washington. “Turns out the presidency is more like a thing he does on the side to help make money for his business.”

This weekend’s trip to Mar-a-Lago was Trump’s 28th to the property since becoming president. Saturday’s and Sunday’s golf outings at the West Palm Beach club brings his total to 79 days there since taking office and 244 total golf days at properties that he owns.

Taxpayers’ total tab for his golf hobby, meanwhile, climbed to $130.4 million.

That figure and the $3.4 million for each Mar-a-Lago trip are based on a HuffPost analysis that included the costs of Air Force transportation, Coast Guard patrols, Secret Service security and other expenses, as detailed in a January 2019 report from the Government Accountability Office of Trump’s first four visits to Mar-a-Lago in early 2017.

Trump frequently criticized former President Barack Obama for golfing too much and promised during his campaign that he would be too busy to take any vacations at all, let alone play golf. Instead, he is on pace to play more than twice as much golf as Obama did ― at a cost three times that of Obama’s, because he insists on playing so many rounds at his courses in Florida and New Jersey, which require expensive flights on Air Force One. Obama mostly played golf at military bases within a short drive of the White House.

“Trump is and always has been a con man. In 2016, he said that, unlike Obama, he’d never golf and he’d never take personal trips outside the White House,” said former Rep. Joe Walsh (R-Ill.), who is challenging Trump for the 2020 Republican nomination. “In addition, Trump is using taxpayer money to personally enrich himself because virtually all of his travel is to Trump properties. That is the swamp Trump pledged to drain. Trump is the swamp.”

Taxes are going up. Maybe not soon, but the mushrooming national debt will eventually leave Washington no choice but to hike taxes. And the longer we wait, the more it will hurt.

The Congressional Budget Office recently forecast annual federal deficits of more than $1 trillion for 2020, and each of the next 10 years. By 2030, CBO says, the deficit will hit $1.7 trillion. Economists generally think a fiscal deficit of around 3% of GDP is healthy and manageable. U.S. deficits over the next decade will average 4.8% of GDP.

Annual deficits spiked during the Great Recession, when tax receipts plunged and stimulus spending soared. The $1.4 trillion deficit in 2009, at the nadir of the recession, was the worst on record.

Deficits fell sharply as the economy recovered, however, and hit a post-recession low of $442 billion in 2015. Then they ticked up again, mostly because of runaway health spending on Medicare and Medicaid. Then came the Trump tax cuts, which went into effect in 2018.

Those tax cuts pushed corporate tax revenue to the lowest levels ever as a portion of federal revenue. Tax revenue from individuals has gone up slightly, because of economic growth. But it would have gone up more without the Trump tax cuts, or with cuts limited to middle- and lower-income workers, say. The twin effect of depressed federal revenue and health care costs growing faster than the economy are driving those trillion-dollar deficits.

This isn’t a crisis today, even though some economists thought it would be by now. But widening deficits at this level aren’t sustainable, either, because they’ll crowd out private investment and depress productivity. Growing interest payments on all that debt will leave less and less for highways, airports and everything else taxpayers expect after mandatory health and retirement spending.

Will Americans tolerate the sharp cuts in social programs and defense that are one way to close this gaping budget gap? Eh, maybe, a little, possibly. But tax hikes will be part of the prescription too, and the Brookings Institution’s Hamilton Project recently published a comprehensive list of the soundest options. Here are five types of tax hikes that would reduce Washington’s indebtedness:

A new inheritance tax. The average tax rate on income is 15.8%. On inherited wealth, it’s just 2.1%. The estate tax is meant to limit the growth of family dynasties and an American aristocracy, but it’s so weak and riddled with loopholes that it barely raises any revenue at all any more. A new inheritance tax would tax wealth received by an heir as normal income. There’d be an exemption threshold, so those subject to the tax would probably be paying at the top rate of 37%. At an exemption threshold of $2.5 million, this tax would raise $34 billion per year, according to the Tax Policy Center. At a lower threshold of $1 million, it would raise $92 billion. That’s a start.

A wealth tax. Policymakers and politicians have gotten interested in wealth taxes because the richest families in America earn most of their money from investing, rather than working. And there are several ways to defer and sharply reduce taxation on investments, which leaves the wealthy paying lower tax rates than ordinary working stiffs. Democratic presidential candidates Bernie Sanders and Elizabeth Warren both favor a wealth tax to fund programs such as free college and government-paid health care.

The Hamilton Project proposes four types of wealth taxes that vary by the type of assets taxed and the exact method of taxation. Starting thresholds range from $8.25 million in net worth to $25 million. But each tax would raise a hefty $300 billion per year or so, and each would cut the estate tax provision that eliminates capital gains taxes on profitable investments passed on to heirs. There’s one crucial catch: Some experts think a wealth tax could be unconstitutional, which basically guarantees a legal challenge.

A value-added tax. This is the mother of all taxes, the quickest way to raise vast sums if ever needed. All developed nations except the United States have a VAT, which is a tax levied at various levels of production for goods and services. Prices typically rise and consumers end up paying much of the tax, but businesses adjust, which helps make this an efficient tax. There would need to be provisions protecting low-income consumers, small businesses and other vulnerable parties. But many other nations have devised proven protections. A 10% VAT would raise around $1 trillion per year and “provide an enormous pool of resources to address social and economic problems,” according to the Hamilton Project report. Some of that money could be spent on economic stimulus programs, to assure rising prices don’t cause a recession.

A financial transaction tax. Sanders and Warren like this tax, too, which would put a fee of 10 basis points, or 0.1%, on trades of stocks, bonds and derivatives. There are concerns about unintended consequences, such as higher costs on ETFs and mutual funds held by mom and pop investors, and a new incentive to move money offshore. So the Hamilton Project recommends a 4-year phase-in period, with the tax starting at 2 basis points and regulators monitoring markets closely for negative repercussions. They could make changes if problems crop up. Hong Kong, France, Italy and the United Kingdom impose similar taxes, with no obvious drawbacks. It could raise $60 billion per year once fully implemented.

Higher corporate taxes. The trick here is to capture more revenue from the corporate sector without driving corporate money overseas or wrecking incentives to do business in the United States. One approach would be to work with other developed countries to establish provisions that make tax rates comparable among nations and prevent the kind of profit shifting corporations have practiced during the last 20 years, to take advantage of low rates in places like Ireland and Luxembourg. Raising the corporate tax rate might work, from the new level of 21% set by the Trump tax cuts to 25%, say, or 28%. But that would have to be paired with other tax incentives for things like new investment and research and development, to assure businesses stayed put in the United States. A well-designed set of corporate tax reforms could raise $110 billion per year, while boosting economic growth by stimulating investment. Makes you wonder what they’re waiting for in Washington.

Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” 

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