POLITICO analysis: At $2.3 trillion cost, Trump tax cuts leave big gap

Between new cost estimates and the White House’s own budget numbers, the wheels are coming off Republican claims that President Donald Trump’s tax cuts will pay for themselves by generating increased growth and government revenues over the next decade.

“Not only will this tax plan pay for itself but it will pay down debt,” Treasury Secretary Steven Mnuchin famously boasted in September. But his own department’s analysts now peg the 10-year cost at $2.3 trillion given the administration’s assumption that tax breaks for individuals and large estates will be extended past 2025.

POLITICO’s own calculations, working entirely from data in the 2018 and 2019 budgets, indicate that the added revenues generated by the tax cuts themselves would fall substantially short of matching $2.3 trillion.

For the years 2018 to 2027, the shortfall ranges from $1 trillion to $1.3 trillion. In measuring for 2019 to 2028, the picture Continue reading “POLITICO analysis: At $2.3 trillion cost, Trump tax cuts leave big gap”

The only certainty in Trump’s budget: Oceans of red ink

The biggest single difference between President Donald Trump’s new budget and his first one nine months ago is this: The White House can no longer hide the immense deficits it would create, not after the tax cuts and military buildup Trump championed and secured.

Documents released Monday show a pronounced drop in total government receipts from 2018 to 2022 when compared with the revenue numbers the White House presented for the same years last May. That includes about $740 billion less from corporate, estate and individual taxes in the same five years, a number that tracks with what the Joint Tax Committee had warned of in December.

The result is to exacerbate the nation’s already tenuous fiscal situation. Even if Trump were to get all the spending cuts he wants, plus his ambitious 3 percent growth, deficits over the next decade would total $7.1 trillion. That’s twice what the Continue reading “The only certainty in Trump’s budget: Oceans of red ink”

The real reason for Congress’ shutdown fiasco

The Republican-led government shutdown in 2013 was billed as a fight over Obamacare. The latest disruption was triggered by Democrats’ demands on immigration.

But lost in the headlines is the fact that the biggest common driver in both crises was Washington’s inability to come to grips with what it promised in the Budget Control Act of 2011.

Republicans were alarmed then by the growing federal debt. And after a long hot summer of wrangling, Congress wrote into law discretionary spending caps that promised to save billions while preserving some rough parity between defense and domestic priorities in the annual appropriations bills which keep the government operating.

In the years since, when that spirit is respected, Congress muddles by without breaking down. But when the BCA is ignored, chaos follows. And it’s no accident that this latest shutdown, like 2013 before it, came on the heels of budget plans that sought Continue reading “The real reason for Congress’ shutdown fiasco”

GOP tax law a one-two punch to charities — and American giving

Back in 2011, when Republicans still talked about deficits, a bipartisan budget commission proposed to save tens of billions a year by revamping the charitable deduction for federal income taxes.

The plan was to substitute a 12 percent tax credit available only to those who gave more than 2 percent of their adjusted gross income. The precise numbers were subject to fine-tuning, but the framework set three goals: lower the deficit, put middle-class donors on more equal footing with the wealthy and establish some minimum standard for generosity to qualify for a tax benefit.

This being Washington, the idea went nowhere. But what’s surprising now is how far Republicans are taking the country in the very opposite direction.

For the first time in their lives, millions of middle-class donors will be effectively shut out from claiming any charitable deduction under the GOP’s new tax law. At the same time, the Continue reading “GOP tax law a one-two punch to charities — and American giving”

Tax reform flaws build the case for a new consumption tax

Is the real lesson from tax reform that Americans rely too much on the income tax to fund their government?

Time and again, that box has proven too small a revenue pot to do all that it’s asked by tax writers. And this leads to decisions, however well-intentioned, that contribute to distortions down the road.

Most other industrial nations lighten the load on their income tax by combining it with some form of consumption taxes — a hard sell in today’s Washington. But given the partisan carnage of this latest tax fight, the uncertain result, and very real debt crisis facing the nation, is it time for both parties to start looking at other options?

“Everybody else has managed to lower their corporate rates but they have done so by relying on consumption taxes which are less harmful to economic growth than income taxes,” said Michael Graetz, a former Treasury Continue reading “Tax reform flaws build the case for a new consumption tax”

Trump budget: Long on wishful thinking, short on shared sacrifice

President Donald Trump’s new balanced budget plan is a little like his famous hungering for a Purple Heart.

As a candidate last summer, Trump allowed that he had always coveted the military decoration for those wounded in combat. But when given his chance to earn one as a young man, Trump avoided the draft in the Vietnam War.

The pattern repeats itself now in the president’s budget, where he again takes the path of wishful thinking without showing much commitment to shared sacrifice.

For example, fully $2 trillion of Trump’s deficit reduction plan rests in large part on what many contend are overly optimistic economic assumptions. At the same time, the president doesn’t hesitate to demand very large savings from programs for the poor and disabled — all ahead of the policy debate over how to actually reform these benefits.

To understand the stakes, one good starting point is to Continue reading “Trump budget: Long on wishful thinking, short on shared sacrifice”

The GOP’s responsible taxman

As a former White House budget director, Sen. Rob Portman still cares about deficits. But as a pro-trade Ohio Republican, he’s every bit as anxious to enact long-sought corporate tax reforms to spur industrial investment back home and lift worker wages.

Where to draw the line is the big question. And amid all the crosscurrents among Republicans these days on rewriting the tax code, Portman best captures the search for a path that gives tax writers flexibility without abandoning all deficit discipline.

Toward this end, Portman has worked for months behind the scenes with staff from the Senate Finance and Joint Taxation Committees. He hopes to have something to show by June or early summer but cautions that his goal even then is to outline the potential for consensus — not to exclude competing options.

“We’re not trying to do our own thing,” he said in an interview. “It’s not Continue reading “The GOP’s responsible taxman”

Trump follows Ryan into same dangerous budget trap

For all the tough talk, Donald Trump’s new budget could be dubbed Ryan-Lite. And if Republicans seem queasy in Congress, it’s because they lived through this movie not long ago and it didn’t end well.

Indeed, just four years ago Speaker Paul Ryan, then chairman of the House Budget Committee, proposed almost exactly what Trump wants now: big increases for the military combined with tens of billions in cuts to non-defense programs. The House went along, and within months the whole appropriations process collapsed, setting the stage for a costly government shutdown in the fall of 2013.

Now Trump wants the GOP to try again — only this time he openly substitutes his own ideology for deficit reduction.

With Ryan, the appropriations cuts were always a way to pressure President Barack Obama to make changes Republicans wanted to achieve savings from entitlement programs like Medicare. But Obama’s not around to Continue reading “Trump follows Ryan into same dangerous budget trap”

Ex-GOP leader Bob Michel, face of decency and public service, dies

Former House Republican Leader Bob Michel, who helped shepherd Ronald Reagan’s agenda through Congress only to be pushed aside by the rise of Newt Gingrich a decade later, has died at the age of 93.

Elected first in 1956, the Illinois lawmaker spent 38 years in Congress — more than half in his party’s leadership. No House Republican has held the Republican leadership post longer, and Michel’s death is sure to trigger a host of memories, all the more relevant because of what Washington has become in the years since.

Indeed, it’s difficult to overstate how much the transition from Michel to Gingrich in 1994 impacted first House Republicans and then all of Congress as the fabric of civility soon fell apart and both political parties became more polarized.

"It’s day and night," said Thomas Mann, a political scientist and long time student of Congress. "I see that transition — Continue reading “Ex-GOP leader Bob Michel, face of decency and public service, dies”

Child migrants lose major case in federal court

Child migrants suffered a major setback in the federal courts on Tuesday, but Congress and the White House also found themselves lectured to from the bench for failing to do more to help the juveniles, thousands of whom have been thrown into deportation hearings without defense counsel.

At one level, the ruling by a three-judge panel on the U.S. 9th Circuit Court of Appeals is a clear victory for the Justice Department. It effectively dooms a long-awaited federal district court trial, scheduled to begin in November in Seattle, on the children’s right to counsel.

But at a second level, Justice’s win had a hollow ring, as two of the three judges wrote a concurring opinion that repeatedly invoked the words of former Attorney General Eric Holder that the government has a “moral obligation to insure the presence of counsel” for the children.

“What is missing here. Money and resolve Continue reading “Child migrants lose major case in federal court”

Trump’s Vietnam draft past sheds light on ‘sacrifice’ debate

When Donald Trump talks about his “sacrifices,” I think of Richard from Trump’s own Queens, New York, who was killed in my infantry company in Vietnam in 1969.

As the medic, I had to go out and get him in a tough stretch of fighting in which several others were killed. And his death has always haunted me because it was so very quick and he was so very new — having come only a month before.

Military records tell me now that Richard was 21 and would have been drafted in the same period when Trump, then 23, was enjoying a friendly medical deferment in Queens because of bone spurs in his feet. The New York billionaire has always insisted that he was prepared to serve if he had not gotten a high number in the draft lottery in December 1969. But all the evidence shows Trump played the Continue reading “Trump’s Vietnam draft past sheds light on ‘sacrifice’ debate”

Lawyerless child migrants caught in legal quagmire

Child migrants from Central America got more sympathy than help last week when the U.S. 9th Circuit Court of Appeals heard arguments on a landmark case testing the children’s right to counsel in deportation hearings.

The three-judge panel in Seattle didn’t want to be seen as turning its back on the young migrants’ plight. But neither was it feeling bold enough to take on Congress and statutory rules that have made it so difficult for the children to get their day in federal court.

The entire tone of the hearing spelled trouble for a major class-action lawsuit brought by migrant rights attorneys on behalf of the children — a case now pending less than a mile away in the U.S. District Court in Seattle. That trial is set to begin Nov. 7, but an adverse ruling from the higher panel could bring the entire two-year effort crashing Continue reading “Lawyerless child migrants caught in legal quagmire”

Federal judges urge compromise on lawyers for unaccompanied children

Unhappy with the choices before them, a three-judge federal appeals court panel urged the Justice Department and migrant-rights lawyers to work together more to try to reach some resolution on the question of legal counsel for children before the immigration courts.

"We’re not a policy body but nothing precludes the parties from talking about solutions while the court considers its decision,” said Judge Margaret McKeown on Thursday, as she closed the nearly hour-long proceeding before the U.S. Ninth Circuit Court of Appeals in Seattle. By her side, Judge Milan Smith echoed this view, all but pleading with both sides to establish an agreed-upon test case that will get around any jurisdictional issues that have so stymied any clear court resolution of the children’s rights.

“I’ve been on this court 10 years and I must confess that among the most complicated of all the laws I deal with is the Continue reading “Federal judges urge compromise on lawyers for unaccompanied children”

Top appeals court to take up landmark child migrant case

A landmark child migrant case comes before the U.S. 9th Circuit Court of Appeals next week in Seattle, where a three judge panel will hear oral arguments as to the right of juveniles to an attorney in deportation proceedings.

The stakes are far-reaching for thousands of children from Central America. And the case illustrates the flip side of President Barack Obama’s much more publicized battles with Congress and the courts over immigration policy.

Indeed, there’s strong evidence that the White House made a calculated decision in 2014 to sacrifice the rights of the children in hopes of saving Obama’s larger plan using his executive powers to shelter millions of migrants already in the U.S.

The midterm elections were just months away, and fearful of a backlash after the surge in border crossings that spring and summer, the administration directed the courts to greatly accelerate the pace of arraignments Continue reading “Top appeals court to take up landmark child migrant case”

What Trump could learn from Ryan, and vice versa

Time and again, the populist appeal of Donald Trump is said to be that he speaks his mind and “tells it like it is.”

But so much of the Trump-driven pressure on Speaker Paul Ryan (R-Wis.) now seems in the opposite direction: Don’t speak your mind, don’t tell it like it is.

The same young wonk from the Midwest — too pure to support a bipartisan farm bill just three years ago—is now expected to embrace the rough-talking New York billionaire who violates so much of what Ryan learned from his mentor, the late Rep. Jack Kemp (R-N.Y.).

If this were happening to some jaded speaker in his last years in office, it might be written off as business as usual. But Ryan is in his 40s and will have to live with whatever compromises he makes.

It’s really the stuff of a Washington novel. Or Continue reading “What Trump could learn from Ryan, and vice versa”

Court order revives child migrant battle

A federal court order handed down this week gives new life to a long-running battle over whether child migrants have a due process right to legal counsel in deportation proceedings.

U.S. District Court Judge Thomas Zilly is tentatively proposing to certify a class action lawsuit that would cover all defendants under 18 who lack the financial resources to obtain an attorney and are potentially eligible for asylum. Zilly would confine the proposed class to only cases within the boundaries of the U.S. Ninth Judicial Circuit, but that encompasses much of the West, including California and Arizona, which have very much been at the heart of the immigration debate.

Since Zilly’s proposed certification is only tentative, it could yet be revised. And the Reagan appointee has already shown an abundance of caution in handling the lawsuit, filed in the summer of 2014.

Nonetheless, the class outlined by the judge Continue reading “Court order revives child migrant battle”

Cuts to job training, vet care stoke anger in 2016

In searching for meaning in this year’s elections, a lot can be learned by looking at two budget numbers: medical care for veterans and job training for displaced and low-skilled workers.

Each is some measure of how Washington cares for the casualties of its decisions, whether in war or trade. And each poses its own Catch-22 that helps explain the alienation many working-class voters are now showing toward their government.

In the case of veterans, there’s a huge disparity between how their medical care is budgeted vs. how the government financed the wars in which the same men and women were wounded.

In the past 15 years, Congress has approved more than $1.5 trillion in emergency or “contingency” appropriations for war-related costs in Iraq and Afghanistan — all money counted outside any budget limits. But medical services under the Department of Veterans Affairs are classified as “non-defense” spending — Continue reading “Cuts to job training, vet care stoke anger in 2016”

Great Plains Indian healthcare is ‘malpractice’ says Sen. Barrasso

Senate testimony Wednesday painted a grim picture of the poor healthcare afforded Great Plains Indians — caught in a federal system plagued by substandard medical facilities and persistent problems in attracting health professionals.

Despite promised reforms, three Indian Health Service hospitals in the four-state region are listed as seriously deficient by inspectors from the Centers for Medicare and Medicaid Services — leading to the sudden pre-Christmas closing of a critical emergency room facility in South Dakota.

And the IHS itself told senators that the Great Plains area currently has over 250 vacancies for healthcare professionals and a physician vacancy rate of 37 percent.

Wednesday’s hearing before the Senate Committee on Indian Affairs followed on a Republican-led staff investigation begun last summer amid new complaints from tribal members. “What we found is simply horrifying and unacceptable,” said Chairman John Barrasso (R-Wy.), himself a trained physician and surgeon. “In my view Continue reading “Great Plains Indian healthcare is ‘malpractice’ says Sen. Barrasso”

Under 16 and ordered deported — with no lawyer

<p>Newly released government records show the heavy cost imposed on the very youngest of the child migrants from Central America after President Barack Obama chose to accelerate their deportation hearings in the summer of 2014.</p><p>In the first 13 months, nearly 2,800 removal orders were issued by immigration judges for children who were afforded no defense lawyer and only a single hearing. In at least 40 percent of these cases, the defendant was 16 or younger.</p><p>The new numbers come from a Freedom of Information Act request filed by POLITICO with the Justice Department and provide a first look at the birthdates for thousands of juveniles prosecuted from mid-July 2014 through Aug. 31 of this year.</p><p>In this period, the data show that at least 392 children, all 14 or younger and without defense counsel, were ordered removed after a single hearing before an immigration judge.</p><p>The total jumps to Continue reading “Under 16 and ordered deported — with no lawyer”

The new Indian wars in Washington

<p>Custer’s long gone, but a hostile Supreme Court and divided Congress are still playing havoc these days with Indian tribes trying to get some of their lands back.</p><p>“With all due respect, there’s not anybody on the court who knows very much about Indians or Indian law,” says Rep. Tom Cole, an Oklahoma Republican who hails from the Chickasaw tribe. It’s little better in the House and Senate where the growth in Indian gaming has so poisoned the well that getting any relief for the tribes is harder and harder.</p><p>The immediate issue is how Congress should respond to a 2009 ruling in which the justices narrowed the mandate of the Indian Reorganization Act that has guided federal policy since the New Deal. In the process, the court effectively created two new classes of tribes under the 1934 law and cast doubt on decades of land conveyances approved by the Continue reading “The new Indian wars in Washington”