ThinkProgress

Senator Corker Kickback’ sends Republicans scrambling in advance of tax vote

What happened? Bob Corker, and many others, want answers.

Sen. Bob Corker, R-Tenn. (Credit: AP Photo / J. Scott Applewhite)

Judd Legum             December 17, 2017

Bob Corker, a Republican Senator from Tennessee, is retiring. He has made a show of criticizing Trump’s agenda, and he was the only Republican to vote against the Senate version of the tax bill, citing deficit concerns. Independent analysis shows the bill would increase the deficit by about $1.5 trillion over 10 years.

A PORTION OF CORKER’S PRESS RELEASE EXPLAINING HIS VOTE AGAINST THE SENATE TAX BILL

After they passed their respective chambers, the Senate and House bills were then sent to a conference committee where senators made more changes, although nothing was altered that would significantly change the bill’s impact on the deficit.

That’s why it was inexplicable that Corker announced his support for the legislation that came out of conference. He didn’t try to argue the new bill was any better for the deficit. Or even that there were changes made to the bill that made it more palatable to him. Rather, he just stated that “every bill we consider is imperfect” and he would vote for it.

Corker made his announcement two hours before the text of the tax bill was made public. In the 503-page text was a new provision that was not in the House or Senate legislation. It would specifically benefit real estate investors who operate “pass-through” businesses. This group includes President Trump — and also Bob Corker, who “has millions of dollars of ownership stakes in real-estate related LLCs that could also benefit” from the new provision.

The savings to Corker could be substantial, according to the Center for Economic and Policy Research.

Dean Baker@DeanBaker13: Senator Corker does considerably better with the Republican tax bill than a married couple earning $30,000, with two kids http://cepr.net/blogs/beat-the-press/swamping-the-drain-with-senator-bob-corker-and-the-republican-tax-bill …

Corker then contacted the International Business Times and said the new provision did not influence his position on the bill because he hadn’t actually read it before announcing his vote. “I had like a two-page summary I went through with leadership. I never saw the actual text,” Corker said.

Corker initially told IBT that the new provision “sounds totally unnecessary and borderline ridiculous” but later admitted he doesn’t “really know what the provision does to be honest. I would need an accountant to explain it.” Last year, Corker made up to $7 million from real estate pass through companies he owns.

His story, however, hit a snag when Sen. John Cornyn (R-TX), the Senate Majority Whip, told ABC News that the provision that benefits real estate investors was added as part of an effort to “cobble together the votes we needed to get this bill passed.” When asked if the provision was added specifically to secure Corker’s vote, Cornyn dodged the question.

Now Corker is in the hot seat. On Sunday night, he sent a letter to Senate Finance Committee Chairman Orrin Hatch (R-UT) and asked him to “provide an explanation of the evolution of this provision and how it made it into the final conference report.”

“I think that because of many sensitivities, clarity on this issue is very important and hope that you will respond in an expeditious manner,” Corker added.

With John McCain (R-AZ) heading back to Arizona to tend to medical issues, Corker’s vote could prove decisive in the Senate, which is expected to vote on the legislation early this week. Meanwhile, #CorkerKickback is trending on Twitter.

Really American

Los Angeles Times   Op – Ed

America still hasn’t reckoned with the election of a reckless con man as president

President Trump speaks in Pensacola, Florida on December 8th. (Dan Anderson/EPA-EFE)

Ariel Dorfman     December 17, 2017

I’m tired of hearing about how Russia intervened in the recent U.S. election and tired of the talk about collusion, and I’m especially fed up with the speculation that all this will doom the Trump presidency.

My weariness is not due to a lack of indignation at how a foreign country covertly helped a reckless con man become president. And I would certainly celebrate if the uncovering of crimes forced President Trump to abandon the White House and slink back to his tower. But I fear that the Russia investigations — and the hope that they will save the republic — are turning too many opponents of this administration into passive, victimized spectators of a drama performed by remote actors over which they have no control.

The psychic, intellectual and emotional energy expended on this issue would be better employed, I believe, by addressing a more fundamental concern: What was it, what is it, in our American soul that allowed the Russians to be successful?

Russians voting in Michigan, Pennsylvania and Wisconsin [didn’t hand] the election to the Republican candidate by a bit more than 80,000 votes.

Those were not Russians voting in Michigan, Pennsylvania and Wisconsin, handing the election to the Republican candidate by a bit more than 80,000 votes. They were American men and women. As were the 62,984,825 others who decided that such a troublesome, inflammatory figure expressed their desires and dreams. Trump could be impeached or resign, or his policies could simply implode under the weight of their malice, divisiveness and mendacity, and the country would still be defined and pressed by the same conditions and dread that enabled his rise. America would still need to engage in a process of national self-scrutiny to fathom how such a nightmare could have been avoided, how it can be prevented from happening again.

Such a process will prove arduous and gut-wrenching. I should know. As a Chilean who is now also an American citizen, I went through a similar grueling quest to comprehend the origins of another political disaster: the 1973 overthrow of the Chilean people’s peaceful revolution and its leader, Salvador Allende. I had to learn that attributing that tragedy to foreign entities did not alleviate or overcome it.

In 1973, a military coup against Allende, the democratically elected president of Chile, terminated an extraordinary experiment in social and economic justice. The assault was aided and abetted by the United States. For many years after the coup, I dwelled on Washington’s responsibility for the brutal dictatorship of Gen. Augusto Pinochet.

And yet, some years after Pinochet’s depradations forced me to flee Chile with my wife and our first son, I stopped automatically alluding to America’s role in my country’s misfortune. I continued to be outraged by the invasion of our sovereignty, which had also occurred in places as diverse as Guatemala, Iran and Indonesia. But I realized that obsessing about what America had done was delaying a more imperative obligation: to minutely, painfully, collectively examine what had gone awry in my own land. How could our attempt to build a nation free of exploitation have paved the way for a tyrannical regime?

It took many years for the self-criticism to bear fruit, but without it the followers of Allende could never have built a coalition with the Christian Democrats, many of whose members were fierce opponents of the revolution’s radical measures. They had at first thoughtlessly welcomed the coup. Our coalition beat Pinochet in a 1988 plebiscite and then voted into office a center-left president two years later. Since then, Chile has organized five more presidential elections. Yet another will take place Sunday, and whatever its outcome, Chileans can be certain that our democracy is robust enough not to be fooled by foreign intelligence agencies.

As an immigrant who has embraced America as his home, I would hope that my compatriots here might be inspired by the way Chile went about healing its wounds. Our confusion and angst forced us to look deep inside our despair, and deeper still into the enigmas and abyss of history in search of a response to the Pinochet tragedy. The fundamental ethical work went beyond politics and intellectual theories to more personal, more intimate, more piercing territory. Chileans had to think ourselves out of our crisis.

Such a process of inquiry and exorcism began in the U.S. soon after the election, with no lack of culprits to blame. And yet so far the multiple, conflicting theories and explanations for Trump’s startling victory have not produced a common national narrative that might unify the opposition and point the way forward.

Now, every desperate American must gaze in the mirror and interrogate the puzzled face and puzzling fate that stares back: What did I do or not do that made the cataclysm possible? Did I ignore past transgressions that corrode today’s society: the discrimination, the sexism, the violence, the authoritarianism, the intolerance, the imperial ambitions, the slavery and greed and persecutions that have darkened America’s story? Did I overestimate the strength of our democracy and underestimate the decency of my neighbors? Was I too fearful, too complacent, too impatient, too angry? Whom did I not talk to, whom did I not persuade? What privilege and comforts, what overwork and debts, kept me from giving my all? What injustice or humiliation or bigoted remark did I witness and let pass? How can I help to recover our country, make it once more recognizable, make it luminous and forgiving?

We must vigorously protest the president’s craven actions, but above all we need to acknowledge that what ultimately matters is not what a foreign power did to America, but what America did to itself. The crucial question of what is wrong with our country, what could have driven us to this edge of catastrophe, cannot be resolved by a special counsel or a Democratic takeover of the House of Representatives or spectacular revelations about Russia’s interference.

Our inevitable moment of reckoning should be seen as an opportunity rather than an obstacle. Thomas Paine, that foreigner, that immigrant, that subversive who loved America, said it best in December of 1776, as his adopted homeland’s inaugural revolution was in danger of being defeated: “Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph.”

I cannot guess whether we will be spirited enough to find the consolatory answers to our crisis. What I do not doubt, as America cries out for a second and much needed revolution, is that a long night of searching lies ahead of us.

Ariel Dorfman is the author of “Homeland Security Ate My Speech” and the forthcoming novel “Darwin’s Ghosts.” He lives with his wife Angélica in Chile and in Durham, N.C., where he is professor emeritus of literature at Duke University.

Newsweek

Donald Trump’s New York real estate friends love his tax bill – it will make them even richer

By Graham Lanktree     December 17, 2017

It is no surprise that many of President Donald Trump’s closest friends in the world of New York real estate are in love with the tax bill that Congress are trying to pass before the Christmas break—it could make them all even richer than they are already.

The bill promises to lower corporate tax by 14 percent, as well as slashing personal taxes for real estate moguls. The tax breaks will add more than $1 trillion to U.S. national debt, according to government and independent analysis, and will be paid for (in part) with $400 billion in cuts to Medicare and other entitlement programs over the next decade.

But New York real estate mogul Steve Witkoff—who counts President Trump as a personal friend—says the bill will grow businesses like his, and that money will trickle down and turn the U.S. economy into a powerhouse, increasing average American’s wages and paying down the debt.

U.S. President Donald Trump smiles as he arrives to speak about tax reform legislation in St. Louis, Missouri, U.S. November 29, 2017.KEVIN LAMARQUE/REUTERS

“I think you’ve got to create all those conditions that get the private sector to want to invest,” Witkoff tells Newsweek. “The president’s game plan is more growth. Let’s add several trillion more dollars of GDP, expand the tax net, lower the amount that you pay, but expand it.

“More tax revenue means we’re going to pay down the deficit.”

Witkoff became friends with Trump in the 1990s when he was building up his billion dollar real estate empire and Trump was buying up properties in Manhattan. Two decades on, Witkoff owns 51 properties—including large buildings in London, Miami, and New York—and has a home in Miami Beach where he lives four months of the year.

He believes his buildings are part of the solution to get the American economy growing at the 4 percent rate Trump has promised. In August, Wikoff activated a new nine-story, 18,000-square-foot billboard in Times Square that can reportedly make as much as $35,000 per minute. It is attached to a luxury hotel due to be completed in 2017.

Read more: Trump’s hotels are losing money as room rates plummet

Witkoff says the bill will be a shot in the arm for contractors: “I think that the more incentives you create for construction to occur—those are amazing jobs, construction jobs are high paying jobs—I think you’ve got to create all those conditions that get the private sector to want to invest.”

But not everyone agrees. New York City’s Chief Financial Officer, Comptroller Scott M. Stringer—who safeguards the financial health of the city’s residents—issued a report that said Trump’s tax plan would harm all but the wealthiest New Yorkers.

“The notion that this tax plan will pay for itself is a fiction. This is faith-based economics—and it’s not rooted in facts or data,” Stringer, told Newsweek.

“If Congressional Republicans were serious about tackling the debt, they wouldn’t blow a trillion dollar hole into the budget with a massive tax cut for the wealthy that we cannot afford,” Stringer continued.

History, he says, makes clear this plan would never pay for itself and won’t help average Americans. As an example, following President Ronald Reagan’s trickle down economic policies in the 1980s, manufacturing workers wages have remained stagnant for more than 30 years. The tax bill has a giant hole in it and is built on bogus assumptions, Stringer says, calling it a  “back-door” to slashing social safety net programs that help working Americans just to make up for the tax shortfalls it creates.

Stringer’s report found that under Trump’s tax bill “the highest income earners in New York (the top 1 percent) would see average tax cuts of over $100,000—far in excess of the average 1 percent cut for families with incomes under $100,000.”

Witkoff is proud to identify himself as a member of the one percent—the wealthiest Americans—who he says share his support for Trump’s tax bill. He is also good friends with billionaire real estate tycoon Howard Lorber, one of Trump’s closest friends, who he says shares a similar view of Trump’s tax bill. A spokesperson for Lorber declined to comment when contacted by Newsweek.

Vector Group CEO Howard Lorber departs after meeting with U.S. President-elect Donald Trump at the Mar-a-lago Club in Palm Beach, Florida, U.S. December 30, 2016.JONATHAN ERNST/REUTERS

Witkoff and Lorber were among a cadre of New York real estate developers who attended a lunch with Trump at Trump Tower on June 8, 2016 during the 2016 election. After the lunch—which came just a day before Donald Trump Jr.’s infamous meeting there with a Russian lawyer now being probed by Robert Mueller—many of the attendees donated heavily to Trump’s campaign.

At the time it looked certain Trump would become the Republican Party’s nominee for the presidential race and he began raising money from his friends to build his campaign. Before the meeting, Trump told Bloomberg he was gathering together “the biggest real estate people in the country.”

Also invited was Trump’s longtime friend, billionaire Richard LeFrak, and the current and former chief executives of Vornado Realty Trust, Steve Roth and Michael Fascitelli. In all there were more than 20 people who represented New York’s movers and shakers. The lunch lasted about two hours.

Witkoff said the general topic of conversation at the meeting was how to get the economy going again, but said: “I don’t remember the details.” He recalled that the threat of terrorism was also discussed but that “the larger discussion point just as much was the economy, and that’s what people were talking about.”

Five days after the gathering, on June 13 Witkoff donated $200,000 to the Trump Victory PAC, a joint fundraising committee between Trump’s campaign, the Republican National Committee (RNC), and 11 state Republican committees, according to Witkoff and Federal Election Commission (FEC) donation filings.

Trump’s campaign immediately got $94,600 and the rest was handed out the various state Republican parties between September and October during the election.

In the past, Witkoff had given large sums to Hillary Clinton, New York Senator Chuck Schumer, and the Democrats, as well as Republicans Mitt Romney, John McCain, and Rudy Giuliani. But in 2016 he gave solely to Trump and Republicans. When asked why he made the donations to Trump, Witkoff said “I contributed because he is my friend.”

Lorber made a nearly identical donation the same day as Witkoff, FEC filings show. Real estate mogul Fascitelli donated $50,000 a day later on June 14. Fascitelli’s colleague Roth donated $235,102 on July 7.

LeFrak, who Trump has said will help spearhead his infrastructure program, donated nearly $200,000 two days after the lunch on June 10 that went to the RNC and state Republican parties.

Vornado Realty Trust founder Steve Roth (2nd R) and LeFrak CEO Richard Lefrak (R) join U.S. President Donald Trump as he delivers remarks on his potential infrastructure proposals during an event at the Rivertowne Marina in Cincinnati, Ohio, U.S. June 7, 2017.JONATHAN ERNST/REUTERS

Sources that spoke with The Washington Post December 7 said that LeFrak is worried parts of the tax plan will have a negative impact on wealthy New Yorkers and had pressed Trump at a fundraiser at the end of November for changes that would allow them to continue deducting their state and local taxes from their income. Trump was vague on his answer, one anonymous attendee said.

This week White House press secretary Sarah Sanders explained that wealthy donors, including the president himself, use campaign contributions to buy access to powerful lawmakers with the hope they will give attention to their pet issues.

Sarah Huckabee Sanders explaining from the White House podium that wealthy donors, including the president himself, use campaign contributions to buy access to powerful lawmakers in the hopes that they will carry water for them on pet issues.

“That’s the reason that often special interests control our government more than the people do. And that’s one of the reasons that this president ran to be president.” she said.

Witkoff says he wouldn’t try to influence Trump on the tax bill. “I can tell you that never once did I, or would I, make a telephone call with regard to my own self interest,” he said. “Any tax legislation, in my view, that gets passed is good for the country—I mean any tax legislation that somewhat reflects the current Congressional plan.”

Yet the plan as it stands gives preferential treatment to wealthy Americans like Witkoff says Comptroller Stringer with its 20 percent reductions on levies for “pass-through” income that benefit people with large real estate portfolios, and by repealing the inheritance tax on large fortunes.

The latest version of the plan will see the tax rate for America’s highest income earners fall from 39.6 to 37 percent. “We don’t need the money,” wrote Michael Bloomberg, a billionaire and former New York mayor, of the bill on Friday, calling it “pure fantasy to think that the tax bill will lead to significantly higher wages and growth, as Republicans have promised.”

Stringer couldn’t agree more. “At a time of massive inequality, this bill fortifies it by pickpocketing everyday Americans,” he says. “It’s no surprise this bill treats real estate investments much better than it treats some other forms of income.”

“Meanwhile, our knowledge economy and many professional services—which are a very big and important sector of the New York City economy—would be punished in this tax bill,” he added. “It’s a plan that includes a carve out for the real estate industry allowing them to deduct interest while other industries won’t benefit from this provision. Simply put, it’s a terrible plan for New York, but it’s great for Donald Trump’s businesses.”

Senate and House Republicans announced Friday that they’ve been able to reach an agreement that consolidates the two versions of the tax bills they passed in late November. They are set to vote on the final bill next week.

Associated Press

GOP betting that its fix for US economy will defy warnings

Paul Wiseman, AP Econ. Writer,  Associated Press December 17, 2017 

WASHINGTON (AP) — The tax overhaul of 2017 amounts to a high-stakes gamble by Republicans in Congress: That slashing taxes for corporations and wealthy individuals will accelerate growth and assure greater prosperity for Americans for years to come.

The risks are considerable.

A wide range of economists and nonpartisan analysts have warned that the bill will likely escalate federal debt, intensify pressure to cut spending on social programs and further widen America’s troubling income inequality.

Congress is expected to vote this week on the bill, the most far-reaching rewrite of the U.S. tax code since 1986. It would shrink corporate taxes, prod companies to return trillions in profits they’ve kept overseas, cut taxes on wealthy estates and drop tax rates — but only temporarily — for individuals.

It puts its faith in the prospect that lower taxes will make corporate America turn more generous and spend more expansively.

“This is a bet on our country’s enterprising spirit, and that is a bet I am willing to make,” Tennessee Republican Sen. Bob Corker said Friday after dropping his previous opposition to higher deficits and throwing his support behind the bill.

In pushing the plan through a divided Congress — no Democrat in either the House or Senate backs it — Republicans have insisted that the economic virtues they envision from the tax-cut package outweigh the risks that many analysts are warning about.

“This is going to be one of the greatest gifts for the middle income people of this country that they’ve ever gotten for Christmas,” President Donald Trump said Saturday as he prepared to leave the White House for the weekend. “Jobs are going to come pouring back into this country.”

The legislation would add at least $1 trillion to federal deficits that were already sure to swell as baby boomers retire and draw on Social Security and Medicare. And the tax-cut’s gains are skewed toward wealthy taxpayers, who historically are less inclined to spend additional money than are households of more modest means. One likely result is that corporations and rich individuals will widen the economic gap between themselves and everyone else.

Even the political calculus for the Republicans looks questionable: A Quinnipiac University poll found that American voters, convinced that the benefits will flow mainly to corporations and the wealthy, oppose the plan 55 percent to 26 percent.

But Republicans have characterized the brew of tax cuts as an economic elixir. The job market appears healthy. But the pace of economic growth, though it’s perked up the past two quarters, has been underwhelming for years. From 2010 to 2016, U.S. growth averaged 2.1 percent a year, a pittance compared with the 3.2 percent average annual growth from 1948 through 2016.

Like its counterparts in Europe and Japan, the U.S. economy has been slowed by a slump in worker productivity, a vital ingredient for a robust economy. U.S. productivity — worker output per hour — trudged ahead at an average annual rate of just 0.6 percent a year from 2011 to 2016, down sharply from a post-World War II average of 2.1 percent.

The more productive that workers are, the more their employers can afford to pay them. And the more that workers are paid, the more they can propel consumer spending, the economy’s primary fuel.

Republicans say their corporate tax cuts offer a solution to the productivity slump. Their plan will cut the corporate tax rate from 35 percent to 21 percent. Multinational corporations would receive a one-time tax break on profits they’ve kept overseas, thereby encouraging them to return the money to the United States. Companies could write off the full cost of new equipment.

The thinking is that these changes would induce companies to invest in equipment, software and plants that would make their workers more productive. As these workers became more efficient, the thinking goes, they would be rewarded with higher pay. An effusive White House predicted in October that the average American household would enjoy a $4,000 raise.

Rising wages could ease another big economic problem: a shortage of workers. The percentage of Americans who are either working or are looking for work has declined as the vast baby boom generation retires. To grow at a healthy pace, an economy steady needs a steady infusion of workers.

“To the extent this heats up the economy, that will help draw people back into the labor force,” says Phillip Swagel, a University of Maryland economist who served in President George W. Bush’s Treasury Department.

But it’s more than just an aging population: Even working-age Americans — ages 25 to 54 — are less likely to work than they used to, in part because so many blue-collar jobs have disappeared.

Douglas Holtz-Eakin, president of the conservative American Action Forum and former director of the Congressional Budget Office, and other supporters of the tax plan don’t deny that the tax plan will elevate deficits. But they insist that it will be worthwhile. They argue that companies will use their windfalls to hire, expand, invest and raise pay — and thereby energize the economy.

“The calculation at one level is pretty simple,” Holtz-Eakin says. “We’re going to have larger deficits, and that is worth it for the growth we’re going to get.”

But most nonpartisan economists have expressed doubts that the plan will give the economy much of a jolt. They recall that wages actually fell after Congress cut the corporate tax rate in 1986.

What’s more, though the corporate tax cuts would be permanent, the tax cuts for individuals would expire after 2025. And a change in how the government accounts for inflation would lift many individuals into higher tax brackets over time. If Americans had to pay higher taxes, they would be less likely to spend and boost the economy.

Beyond everything else, the timing of the Tax Cuts and Jobs Act of 2017 could work against it. Today’s economy doesn’t need much help. The unemployment rate is at a 17-year low of 4.1 percent. Many employers are already complaining that they can’t find enough qualified workers. And in a vote of confidence in the economy, the Federal Reserve has just raised short-term interest rates for the third time this year.

So a stimulus from a big tax cut could overheat the economy and potentially ignite inflation.

“You throw deficit-financed tax cuts on a full-employment economy, and you’re playing with fire,” says Mark Zandi, chief economist at Moody’s Analytics. “It’s going to get pretty toasty out there this time next year.”

Reagan Economist Says Trump’s Tax Cuts Won’t Help Economy.