April 28, 2017

Trumpdon'tcare the Sequel

This week, House Republicans unveiled their second attempt at repealing and replacing the Affordable Care Act (ACA). The Administration was pushing for a quick vote, including possibly on Saturday which is the 100th day of Trump’s presidency. This time, House Republican leadership recognized that the votes weren’t there (yet). Rep. Tom MacArthur (R-N.J.) of the Republican Tuesday Group (the moderates) proposed an amendment to H.R. 1628, the American Health Care Act that he reportedly drafted with input from the House Freedom Caucus (the conservatives). It makes H.R. 1628 significantly worse. The amendment basically eliminates the “community rating” requirement by allowing companies to apply for waivers from it. Under the ACA, health insurance companies cannot charge different rates in the same coverage area based on the individual circumstances of each person. For example, a woman cannot be charged more than a man just because she can get pregnant and a man cannot. Someone with diabetes, high blood pressure, asthma or allergies cannot be charged more than someone without these medical conditions. By opting out of the “community rating” requirement an insurance company could charge these individuals for the full cost of treating their medical conditions.

The amendment also lets states apply for waivers so they can opt out of the requirement that people with pre-existing conditions must be treated the same as everyone else. Keep in mind, a pre-existing condition can be a chronic illness or something significantly more serious.

States can also seek waivers from the “essential health benefits” requirements of the ACA. This aspect of the law mandates that insurance companies cover essential services such as pregnancy or mental health care. The MacArthur amendment would allow states to basically implement their own definition of what should be considered an “essential health benefit” which would mean that many basic health care services might not be covered. It also requires the federal government to act on the waiver request within 60 days. If no action is taken, the waiver is automatically granted.

Republicans don’t have the votes yet on this amendment but they are getting closer.

Reforming the Tax Code – in One Page

On Wednesday we got a peek at what the Trump Administration’s so-called tax reform plan looks like. I’d like to be clear that I am certainly open to legitimate, thoughtful tax reform. As a former tax attorney, I understand fully there are many aspects of the tax code that can and should be modernized. What we saw this week shouldn’t even be called a tax reform plan because it was a one page outline with virtually no details. In fact, officials could not even answer the basic question of what this “plan” would mean for the bottom line of a family of 4 making $60,000 a year.

The Trump tax outline would reduce income tax brackets from 7 to 3: 10%, 25% and 35%. The corporate tax rate would go from 35% to 15%. The estate tax and the alternative minimum tax would both be eliminated. The proposal doubles the standard deduction for individuals (currently $6,350) and married couples (currently $12,700). It eliminates a number of personal deductions, including the one for state and local taxes.

The bipartisan, highly respected Committee for a Responsible Federal Budget estimates that Trump’s tax “reform” outline would cut taxes by $5.5 TRILLION dollars over the next 10 years. That’s $550 Billion per year, or about 25% of all the taxes raised currently from the income, corporate and estate tax combined. Here is another way to look at that amount: it equals about 20% of the entire GDP of the USA. The organization goes on to conclude that “America can’t Afford a $5.5 Trillion Tax Cut” … and … “Growth Can’t Pay for this Tax Cut”. Here is their commentary for your review.

Since there isn’t any actual legislation, just this thin outline, I don’t expect a vote to happen soon. Although with this White House, anything is possible.

Net Neutrality

On Wednesday new FCC Chairman Pai announced that a vote would be held May 18th on a Notice of Proposed Rulemaking regarding whether or not to eliminate net neutrality rules. After that vote, which we expect will be in support of eliminating those rules, a public comment period will open before a final vote is taken. Under current rules, internet service providers are treated like public utilities, or common carriers. This means they must treat all internet content the same. They cannot create so-called fast lanes, charging more money for faster content delivery. Reversing net neutrality rules would make it harder for everyone to access certain internet content. Only big businesses would be in a position to pay more money for easier access. It places small companies at a serious competitive disadvantage. We will be adding this issue to Behind the Curtain after the vote if, as we anticipate, the FCC votes to move forward with this plan.

France Election Update

The good news for democrats everywhere is that almost 80% of the French people did NOT vote for Marine LePen, an anti-immigrant and anti-globalist demagogue who recently announced France was not responsible for wartime persecution of Jews. Her father, Jean-Marie Le Pen, founder of the National Front party, had called the Holocaust a “detail.” Official history accepts full responsibility and memorials everywhere in France speak of crimes carried out by “Nazi barbarism” with the “active complicity of the Vichy Government.”

Mme LePen finished second to Emmanuel Macron, founder of the centrist En Marche movement. He is sometimes described as an “outsider,” although he served in and resigned from the Cabinet of outgoing President Francois Hollande, a Socialist who chose not to run for a second term.

Within an hour of the polls closing, two of the losing candidates: Benoit Hamon and Francois Fillon, as well as most major figures in the two previously dominant parties, endorsed Macron. He is now polling over 60% for the second round, and polls were very accurate in predicting results of the first.

Anything can happen in politics anytime, anywhere, but it looks as if the next President of France will support the European Union, NATO, global trade, international cooperation, a somewhat scaled down public sector, and a definition of national identity like our own, which emphasizes shared values like liberty and equality rather than ethnic origins.

Copyrights

On Wednesday the House considered H.R. 1695, the Register of Copyrights Selection and Accountability Act of 2017. This legislation changes the process for selecting and confirming a Register of the Copyright, who is responsible for overseeing the U.S. Copyright Office. This office falls under the direction of the Library of Congress. Under current law, the Librarian of Congress appoints the Register of the Copyright. Under H.R. 1695 the President will appoint a nominee to this position who would then require Senate confirmation. I do not think that this change is necessary. It could significantly delay the appointment of a Register and slow down the modernization process currently underway at the library. It also raises questions about how this change would impact library employees. I voted NO. The legislation passed and the entire vote is recorded below:

Opening Fannie and Freddie’s Books

On Thursday the House considered H.R. 1694, the Fannie and Freddie Open Records Act of 2017. This legislation simply requires the Government-Sponsored Enterprises Fannie Mae and Freddie Mac to comply with the Freedom of Information Act when they are under receivership or conservatorship. Both have been under federal government conservatorship since 2008. I voted YES. H.R. 1694 passed and the entire vote is recorded below:

Omnibus

Today the House passed H.J. Res. 99, Making Further Continuing Appropriations for Fiscal Year 2017. This Continuing Resolution (CR) funds the federal government for one week. The current CR expires at midnight tonight. One of the reasons another extension is necessary is because President Trump was insisting on including funding for his wall along the Mexican border which was opposed by all Democrats and some Republicans. The President dropped that demand but details on other issues are still being finalized. I voted YES. H.J. Res. 99 passed and the entire vote is recorded below:

Behind the Curtain — More House and Trump Administration Actions You Don’t Want to Miss

Here are this week’s additions. If you need to catch up or share with friends, you can find the full list here.

68. On April 20, 2017 the Federal Communications Commission (FCC) voted to eliminate price caps in the business broadband market by imposing a new standard that characterizes certain local markets as competitive even though only one broadband provider is operating. This will make it easier for broadband companies to raise prices in regions where they already have a monopoly, particularly in rural areas.
69. On April 20, 2017 the Federal Communications Commission also voted to ease a limit on television station ownership. The current rule establishes how stations are counted in market share and places specific limits on companies owning television stations. One restriction is that they can’t have the ability to broadcast to more than 39% of U.S. households. Concentrated ownership of television stations limits consumer programming options and can hurt local news editorial operations.
70. On April 26, 2017 we learned that Ivanka Trump had established a new entity, ostensibly to provide capital to female entrepreneurs. According to multiple news reports, some countries and corporations have already contributed to it. This is another in a long line of conflicts for the first daughter. She is a federal government employee, owns global businesses, and is now soliciting money for a private venture from sovereign nations and regulated corporations. This raises many questions - is this new venture a nonprofit, a foundation? Does she draw a salary, use her government position to raise money? Is this new entity tax-exempt?
71. On April 26, 2017 a Justice Department lawyer argued an immigration case before the Supreme Court. In an exchange with Chief Justice John Roberts we got another troubling look at the Trump Administration’s attitude towards immigration. The Department of Justice (DOJ) insisted that even a trivial or meaningless misstatement on a citizenship application could result in the revocation of citizenship even 20 years later, if it came to light. The DOJ actually insisted after a question from Chief Justice Roberts that if someone knowingly went 5 miles over the speed limit and didn’t include that on their application, their citizenship could be revoked. This is a telling window into the heartless attitude of this Administration toward immigrants. It’s worth noting that Melania Trump was paid for some modeling work she did while in the U.S. on a visitor’s visa. That activity is not permitted under that visa category. It does not appear that the First Lady disclosed this information on her citizenship application.

What’s Up Next

The next House votes are scheduled for Monday May 1st. The House is expected to consider legislation funding the federal government beyond May 5th. On May 2nd, the House Financial Services Committee will hold a markup, the process by which a congressional committee debates and amends proposed legislation. The subject of the markup is the Financial CHOICE Act, more appropriately named the WRONG CHOICE Act, the Republican effort to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act. The latter was passed into law following the 2008 financial crisis which led to the worst recession since the Great Depression.