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“Moneyed Elites Get Richer The Old-Fashioned Way; Stealing”: Preferential Tax Treatment For The Narcissistic Money Manipulators

With the 2016 presidential campaigns in full swing, the burdens of the working middle class have taken center stage. And believe it or not, there is bipartisan support from the frontrunners on a key issue brought up over and over again. Donnie Trump is for it. Hillary Clinton is for it. Jeb Bush is for it. Bernie Sanders is for it. Even Barack Obama is for it. And the American people are overwhelmingly for it.

The “it” that’s drawing such broad support is the idea of ending a ridiculous tax loophole that was written by and for the richest, most pampered elites on Wall Street. An obscurely titled “carried interest” tax break allows billionaire hedge-fund hucksters to have their massive incomes taxed at a much lower rate than the one retail workers, Main Street businesses, carpenters, and other modest-income people must pay.

Keep that carried interest tax loophole in mind when I tell you this number: 158,000. That’s the number of kindergarten teachers in America. Their combined income in 2013 was $8 billion. Here’s another number for you: 25. That’s the number of America’s highest-paid hedge fund operators whose combined income in 2013 was $21 billion. Yes, just 25 Wall Street greedmeisters hauled off $13 billion more in pay than was received by all of our kindergarten teachers — the people we count on to launch the education of the next generation.

Which group do you think is rewarded by law with the lowest rate of income tax? Right: the uber-rich Wall Streeters! Incredibly, Congress (in its inscrutable wisdom) gives preferential tax treatment to the narcissistic money manipulators who do practically nothing for the common good. Even flamboyant celebrity narcissist Donnie Trump sees through the gross inequality of this tax scam: “The hedge fund guys didn’t build this country,” The Donald recently barked. “These are guys that shift paper around, and they get lucky. The hedge fund guys are getting away with murder.” Indeed, while dodging through this loophole, they pay about half the tax rate that kindergarten teachers are assessed. In effect, Wall Street’s puppets in Congress let this tiny group of moneyed elites steal about $18 billion a year that they owe to the public treasury to finance the structure and workings of America itself.

This privileged treatment of pampered paper- and money shufflers over people who do constructive work in our society adds to America’s widening chasm of inequality. It’s so unfair and unpopular that even Donald, Hillary, Jeb, Bernie and others are saying that it has to go. So it’s bye-bye, loophole, right?

Ha — just kidding! Trump can mouth all he wants, but no animal hath such fury as a hedge funder whose special tax boondoggle is threatened. Trump had barely gotten the word “unfair” out of his puffy lips before the tax-loophole profiteers deployed battalions of lobbyists, PR flacks, and front-group operatives out to defend their precious carried-interest provision. One group, with the arcane name of Private Equity Growth Capital Council, rushed a dozen Gucci-clad lobbyists to Capitol Hill to “inform” lawmakers about the virtues of coddling Wall Street elites with tax favors.

Of course, “informing” meant flashing their checkbooks at key members of Congress. After all, even the loudest blast of political talk is cheap — and it’s the silent sound of a pen writing out a campaign check that makes Washington World keep spinning in favor of the rich.

Sure enough, Rep. Paul Ryan (R-WI) and Sen. Orrin Hatch (R-UT) , the two lawmakers who head Congress’ tax-writing committees, quickly announced that — the will of the people aside — there would be no repeal of the hedge-fund loophole anytime soon. The inequality that is presently ripping our society apart is not the result of some incomprehensible force of nature, but the direct result of collusion between financial and political elites to rig the system for the enrichment of the few — i.e., themselves — and the impoverishment of the many. There’s a word for those elites: thieves.

 

By: Jim Hightower, The National Memo, September 30, 2015

October 1, 2015 Posted by | Carried Interest Loophole, Economic Inequality, Hedge Fund Managers, Wall Street | , , , , , , | 2 Comments

“The Right’s Collective Amnesia And Fantasia”: Former Republican Senator Admits The Obamacare Court Challenge Is Built On Lies

For months, when the Affordable Care Act was still swimming upstream through the legislative process, President Barack Obama and Senate Democrats courted Senator Olympia Snowe, a Republican from Maine, thinking she would respond rationally to enticements and provide Democrats bipartisan cover to reform the U.S. health insurance system.

Their efforts ultimately failed. Snowe, like every other Senate Republican, voted against the health reform bill in 2009 and 2010, and then joined Republicans in their various efforts to undermine or repeal the law, until she retired in 2013.

But now it looks like all the time Democrats wasted on negotiating with Snowe, and allowing her to help shape the legislation, has paid off. Snowe has, to my knowledge, become the first contemporaneous Republican senator, current or former, to acknowledge that a Supreme Court challenge meant to cripple Obamacare is built on a tissue of lies. If the Court sides with Obamacare opponents, her comments will become incredibly relevant to the ensuing political shitstorm.

“I don’t ever recall any distinction between federal and state exchanges in terms of the availability of subsidies,” Snowe admitted, according to New York Times health reporter Robert Pear.

“It was never part of our conversations at any point,” said Ms. Snowe, who voted against the final version of the Senate bill. “Why would we have wanted to deny people subsidies? It was not their fault if their state did not set up an exchange.” The four words, she said, were perhaps “inadvertent language,” adding, “I don’t know how else to explain it.”

There are two intersecting argumentative threads that one must untangle to really understand King v. Burwell. The first, specialized one addresses the question of what the text of the Obamacare statute means. Does it, in all its interlocking, cross-referenced parts, provide authorization for the IRS to issue subsidies to all exchanges? Or does it prohibit those subsidies in the three dozen states that have availed themselves of federal fallback exchanges, through Healthcare.gov? Only the most cribbed reading of the law—literally less than a sentence of the whole text—suggests the latter.

The second thread is, if anything, even more straightforward: What were the framers of the Affordable Care Act trying to do? Were they trying to stitch together a harmonious system across all state borders, with subsidies available everywhere? Or were they trying to coerce states into setting up their own exchanges by threatening to withhold subsidies from their citizens, and impose chaos on their insurance marketplaces? There is no evidence to suggest that the goal of the Affordable Care Act was the latter.

These threads invariably become entwined for two reasons. First, if Congress was trying to create an incentive for states to set up their own exchanges, then its failure to provide those states clear notice of the threat in the law raises serious constitutional concerns. But also, judges have consciences and intellectual standards, too, and may in some cases allow their understanding of the political history of the Affordable Care Act to influence the way they think about what the text of the law actually conveys. This explains why conservatives have been engaged in a year-long campaign to revise the history, and assert that the framers of the ACA knew all along that threatening the states would leave the law vulnerable to ruin, but did it anyway.

Pear’s article largely elides the textual question—if anything, it proceeds from the assumption that Obamacare opponents have a better legal case than they really do. But at the same time, it is devastating to the spin that Republicans are putting on the ACA’s history to bolster the plaintiffs in King.

Here, for instance, is Snowe’s erstwhile colleague, Senator Orrin Hatch, who served with Snowe on the committee that drafted Obamacare, claiming that the law’s drafters, not its enemies, are falsifying the historical record to influence judges.

“The Democrats were arguing that the only way to get the states to sign up is to put the pressure on them by making them have to do a state exchange, so it’s kind of disingenuous for them to come in now and say they didn’t mean that,” Hatch told reporter Todd Zwillich in this DecodeDC feature. “I’m not the only one that knows that. Their attitude was, you’ll never get all the states to sign up if you don’t force them. Yeah, I don’t think there’s any doubt in the Democrats’ minds they wanted to do that because they were afraid the states wouldn’t form their own exchanges. Now they’re trying to say they didn’t say that, but they did.”

With respect to King, almost every Republican member of Congress is, like Hatch, caught in the grip of the right’s collective amnesia and fantasia. The spectacle of it is breathtaking to sentient observers of the health reform process, but ultimately meaningless if the Supreme Court does the right thing in June, and rules for the government. If it doesn’t, the textual argument will effectively be over. But, for the purposes of reading such a bad decision into its proper context, addressing the ensuing chaos, and clarifying for the record for the public, the historical argument will take on even greater significance—which makes Snowe’s contribution extremely valuable.

 

By: Brian Beutler, Senior Editor, The New Republic, may 27, 2015

May 28, 2015 Posted by | Affordable Care Act, Health Exchanges, Olympia Snowe | , , , , , , | 1 Comment

“A Hollow Bromide”: Don’t Believe The Hype; Republicans Still Don’t Have A Health Care Plan

With the Supreme Court considering a case that could unravel the Affordable Care Act, leaving some 8.2 million Americans suddenly uninsured and sending premiums skyrocketing, the Republican Party has a comforting message for voters: We have a solution.

“As Supreme Court Weighs Health Law, GOP Plans to Replace It,” blares the headline in Friday’s New York Times. In the article, reporter Jonathan Weisman asserts that “the search for a replacement by Republican lawmakers is finally gaining momentum.”

A legislative scramble is underway. On Monday, Representatives Paul D. Ryan of Wisconsin, Fred Upton of Michigan and John Kline of Minnesota, the chairmen of the powerful committees that control health policy, proposed what they called an “off ramp” from the Obama health act that would let states opt out of the law’s central requirements.

On the other side of the Capitol, Senators John Barrasso of Wyoming, Lamar Alexander of Tennessee and Orrin G. Hatch of Utah, all Republicans, offered their own plan this week to provide temporary assistance to those who would lose their subsidies and new freedom to all states to redesign their health care marketplaces without the strictures and mandates of the health care law.

So are Republicans really ready to finally advance a health care reform bill of their own?

Probably not.

While the House and Senate groups both laid out broad visions for new health care laws, neither offered any sort of details on how their plans would actually work. Saying that “we would provide financial assistance to help Americans keep the coverage they picked for a transitional period,” as the Senate Republicans promise, sounds great. But until they explain how much financial assistance they would provide, or how long the transitional period would last, it is a hollow bromide. Similarly, the House Republicans’ plan to form “a working group to propose a way out for the affected states if the court rules against the administration” sounds great — but Americans still have no idea what, exactly, the way out would be.

Of course, it’s possible that Congress will fill in the details in the coming weeks. But it’s incredibly unlikely. After all, Republicans have literally been promising a detailed alternative to the Affordable Care Act for six years, and so far it’s not much closer to reality than it was in 2009. Why should this time be any different?

Even if Republicans did coalesce around a health care plan of their own, it’s almost impossible to imagine a significant reform passing both the House and Senate. The GOP already has deep divisions on health care policy, and they are likely to intensify as the 2016 elections draw nearer. Republicans who face tough re-election fights will be loath to vote on a controversial measure with such high political stakes (a side effect of the GOP’s all-out war against President Obama’s health care policy).

Put simply: If the Republican Congress could barely come together to avoid a self-inflicted shutdown of the Department of Homeland Security, there is no reason to believe that they could pass a massive reform bill on the most radioactive issue in politics.

Republicans have plenty of good reasons to pretend that they have a solution to the disaster that would ensue if the Supreme Court guts the Affordable Care Act. But until they prove otherwise, the latest batch of Republican Obamacare replacements should be viewed as no more likely to become law than their countless predecessors. And if the Supreme Court does rule against the Obama administration in King v. Burwell, no help will be on the way for the Americans who would lose their insurance.

 

By: Henry Decker, The National Memo, March 6, 2015

March 8, 2015 Posted by | Affordable Care Act, King v Burwell, SCOTUS | , , , , , , , , | Leave a comment

“A Lesson Not Learned”: There’s Another Shutdown Fight In Washington. Republicans Will Lose This One, Too

Congressional Republicans are in a tough spot. Funding for the Department of Homeland Security expires on February 27, but conservatives are demanding that any DHS funding bill also block President Barack Obama’s executive actions on immigration. That’s unacceptable to Senate Democrats, who filibustered the legislation three times last week.

And now we’re stuck. Some Republican senators are urging their House colleagues to accept a “clean” funding bill that doesn’t block Obama’s unilateral actions, but that’s unacceptable to House Republicans. “The House did its job,” Speaker John Boehner said Wednesday. “Now it’s time for the Senate to do their work.” No one is quite sure how this will end. “I guess the lesson learned is don’t put yourself in a box you can’t figure out a way to get out of,” Republican Senator Shelley Moore Capito said.

The exact outcome may be unpredictable, but this impasse wasn’t.

Think back two months ago, when Congress needed to reach an agreement to fund the entire government. Conservatives were still seething at the president for taking executive action on immigration and wanted to use the government funding deadline as leverage to enact concessions from Obama. Republican leadership, on the other hand, was terrified that another government shutdown would be a political disaster for the GOP, just as they regained full control over Congress. And, they argued, Republicans would have more leverage in the 114th Congress, having won the Senate in November. The compromise was to fund the government through the rest of the fiscal yearwith the exception of the Department of Homeland Security, which was funded only until February 27.

Conservatives weren’t happy with the deal, but Boehner’s job was safe. More importantly, the Republican leadership had limited the political downside of a potential shutdown. Now, it wouldn’t be a full government shutdown, just one department. Given the Tea Party’s fury at Obama, that was a huge victory for Boehner.

But even though the current impasse was the best case scenario for Republicans, they still are in a tough position. The practical effects of a DHS shutdown are relatively minor, since most of DHS’s employees are classified as essential and thus would continue to work in the case of a shutdown. But the political implications of it are much worse. Obama can criticize the GOP for putting the U.S.’s national security at risk. “I can think of few more effective ways for Republicans to re-surrender national security as an issue to Obama than by taking the Department of Homeland Security hostage like this,” The New Republic’s Brian Beutler wrote in December. And that’s exactly what Obama has done in recent weeks. As February 27 approaches, Obama and other Democrats will only amplify that message.

Republicans are already trying to avoid blame for a DHS shutdown. “If there’s a shutdown, it wouldn’t be because of us,” Republican Senator Orrin Hatch said Tuesday. “The Democrats are filibustering it. I don’t know how we get blamed for that this time.” Hatch is rightDemocrats did filibuster the House-passed legislation on three separate occasions. But Republicans will probably take the blame. That’s how the politics of the filibuster work. The minority uses it to obstruct legislation and the majority takes the blame. Americans know that Republicans control both chambers of Congress. They aren’t paying attention to parliamentarian rules.

In all likelihood, this will end the same way every funding fight ends these days: Republican leadership will eventually bring up a clean bill and it will pass with mostly Democratic votes. That’s long been the GOP game plan. It’s also possible that Republican leadership will see this fight, with its relatively small stakes, as a good opportunity to build credibility with the Tea Party by standing up to Obama and refusing to pass a clean bill.

Neither of those outcomes are good for the GOP. But this is what happens when one ideological group has outsized control over a party and wants to pick funding fights that they are certain to lose.

 

By: Danny Vinik, The New Republic, February 12, 2015

February 15, 2015 Posted by | Dept of Homeland Security, Government Shut Down, Republicans | , , , , , , , , | Leave a comment

“Foot-Dragging Tedium Can Become Dangerous”: Senate Republicans Are Already Frustrated With John Boehner’s Crazy Caucus

There’s an any-port-in-a-storm quality to Speaker John Boehner’s piloting of the House, and nothing illustrates that better than Republican squabbling over whether and how to fund the Department of Homeland Security.

Why is the Department of Homeland Security about to run out of money? Because back in December, conservatives wanted to use a government funding deadline to pick a big fight with President Obama over his deportation relief policies, and rather than risk a shutdown, or wrest the till back from the hardliners, GOP leaders decided to give them whatever they could cobble together. What they came up with was a harebrained scheme to fund all government operations except for Homeland Security through the end of the fiscal year. Meanwhile, they extended DHS funding through February only, and promised to fight Obama’s deferred action programs in the context of a narrower threat to shut down the department that enforces immigration policy.

The problems with this strategy were obvious from the outset. As I observed at the time, denying DHS an appropriation wouldn’t freeze Obama’s deportation programs, because the agency implementing them is self-financing. In fact, denying DHS an appropriation wouldn’t accomplish very much at all; as a national security hub, most of its functions are considered essential, and thus exempt from the kinds of closure protocols that apply to national parks and Social Security administrative offices.

The upshot is that Republicans are threatening to infuriate DHS employees and their allies, weaken DHS functionality, and, in a losing p.r. campaign, surrender the mantle of national security back to Democratsall unless Obama agrees to rescind his own executive actions. As muggings go, this isn’t much different than screaming, “Your money or my life!” No less an immigration hardliner than Representative Steve King understands that the plan has always amounted to capitulation.

But having promised a brawl, Boehner must now go through the motions, which look more and more contrived as prominent Republicansparticularly in the Senatestep in to admit that they will fund DHS, come what may.

This week, John Cornyn, the number two Senate Republican, told CNN “we’re not going to take any chances with the homeland.” Cornyn is showing his cards here, but he’s also putting the House’s strategy up for ridicule. Because House Republicans must proceed as promised, Cornyn et al must now pledge not to incur the mostly-imagined risk that his House counterparts are supposedly inviting. When Republicans let appropriations lapse in 2013, and DHS was just one of the many agencies ensnared in the shutdown, domestic security wasn’t the core political concern. By centering the fight around DHS alone, though, conservatives have left themselves no choice but to swallow Democratic demagoguerytheir strategy is premised on the notion that Obama will relent when the threat to national security becomes too great. There are no national park closures to obscure the fact that the fight is over something called the Department of Homeland Security, and you gain no leverage by threatening to withhold funds from DHS, if you admit that withholding funds from DHS doesn’t really accomplish much.

Senate Republicans have other political concerns as well.

Dean Heller, a Republican senator from Nevada, worries that forcing a fight with Obama over immigration policy, in the context of an appropriation, invites the risk that certain members lapse into referring to affected immigrants “in a way that is offensive.” Mark Kirk of Illinoisa vulnerable incumbentbelieves any “government shutdown scenario” would be “a self-inflicted political wound for Republicans.”

Where Senate Republicans would like to avoid deadline-driven fights altogether, Boehner promises to drag them into those fights at the behest of conservatives, even when he knows he can’t win. His inability to admit the obvious, while Republican senators feel unencumbered, reflects the dramatically different pressures a House speaker and a Senate majority leader face. The strategic rift thus isn’t limited to DHS, but will emerge any time Senate Republicans see political dividends in a compromise that House hardliners won’t accept.

To avoid an embarrassing, damaging lapse in highway funding, for instance, senate Republicans, including Orrin Hatch, who helms the tax writing committee, are warming to the idea of replenishing the highway trust fund by increasing the gas tax. Collapsing gas prices have made the prospect of a higher gas tax less punitive, and lent an obvious idea bipartisan support.

Naturally, Boehner can’t accept this.

At least not yet. The logic of a higher gas tax might become more appealing to him as the funding deadline nears, just as we assume the logic of extending DHS funding cleanly will overwhelm him before too long. As a template for addressing pressing national business, taking symbolic stands like these is more tedious than dangerous. But foot-dragging tedium can become dangerous when the pressing business is increasing the debt limit or responding to unanticipated crises.

 

By: Brian Beutler, The New Republic, January 14, 2015

January 17, 2015 Posted by | Congress, House Republicans, Senate | , , , , , , , | Leave a comment

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