Today is my birthday, the best day of the year for me. I know--ego, but not really. Just an appreciation of life, being alive. Having the opportunity to say thanks to my beloved family and friends who remember.
Happy Birthday, Jack
Today is my birthday, the best day of the year for me. I know--ego, but not really. Just an appreciation of life, being alive. Having the opportunity to say thanks to my beloved family and friends who remember.
Happy Birthday, Jack
The House of Representatives will vote Thursday on a Joint Resolution to fund the operations of the Federal government through Dec. 11. Spending levels will continue for about 10 weeks of so from end of the Fiscal Year on September 30 at about current levels.
The Continuing Resolution caps annual spending at the 2014 $1.012 trillion level.
Congress needs to take this action to avoid another “government shutdown” because it has not passed any of the dozen appropriations measures intended to fund the government for a full fiscal year.
The House has passed seven appropriations bills but the Senate under the screwball leadership of Senator Harry Reid (D-NV) has not yet passed a single one, in fact the Senate has not even taken one vote on any appropriation measure. Pure dereliction.
What does this mean if this date is adopted?
It means this Congress has totally capitulated. Members want to adjourn and will adjourn, likely to return in late November. However, the December 11th date of continuing funding also means Congress will stay around for only a few weeks and it is highly unlikely any major issue will be addressed, that will falls to the next Congress. Of course there will have to be another CR but there will be no drama.
The Resolution in the House kicks any decision on the re- authorization of the Export-Import Bank until June 30, 2015, eliminating this contentious issue for the time being. There are a few issues such as extension of expired tax provisions that need to be dealt with one way of the other and perhaps addition money for action against ISIL.
However, for the most part, it is see you next year.
Congress is back in Washington today. It will be a short stay. The campaign trial awaits and the possibility of passing legislation that deserves attention is remote, make that very remote. The only real pending and needed business is to fund the government’s operations past September 30. It is likely to happen. There is plenty to fight over but nothing to win in the end.
The next two weeks will be filled with the respective Houses considering and maybe even voting on proposals purely political in nature and aimed at putting the opposing party in an uncomfortable position. The tactic usually does not work but it particularly does not work in the Senate as Majority Leader Harry Reid has repealed the concept of democracy by never allowing a free flow of debate and votes. As I recall from the third grade, that is what the Senate was designed to do, debate issues and everyone get a chance to bring up ideas, even if they do not have much support.
As I have said many times, it is all about November 4th.
The other thing going on here is the trials and tribulation of beleaguered President Obama. It seems he has found a strategy (after not having one at all and then having a concept of “managing” the threat) to deal the brutal thugs beheading people in the Middle East. According to leaked information and public statements, the implementation of the strategy to rid the world of this scourge will take as much as three (3) years. When I read that in the newspaper today, I thought it has to be a misprint. When I thought about it for a moment, realizing it comes from a Government that could not exit Iraq fast enough (the consequences of which are being reaped now) ignores its own declaration of red lines and bans Russians from DisneyWorld as a sanction, made me sad.
It made me sad for all those people who will be publically executed, displaced and ruined. It made me sad Mr. Obama is so feckless and reckless. It made me sad our country has become impotent and seems to lead from so far behind; we cannot longer see the behind of the dog in front of us.
I never thought the invasion of Iraq was such a great notion. That is another subject and I do not profess to have the solutions to eliminate ISIL. However, I do think a plan that will take three years to make any progress is absurd, not serious and really a meaningless effort designate to fail. Mr. Obama’s policy in the Middle East and elsewhere has failed; he cannot see the cause and result. He will go to any length to delay, change subjects and not confront the situation. Only pressure and embarrassment have forced him to get a strategy now and a three-year one is all he could come up with.
With the election coming on strong, it is worhtwhile to look forward. What will be done after the election and in the next Congress no matter if the control of the Senate goes to the Republicans?
Under the category of “elections have consequences”, the agenda for a lame duck session look different based on which party controls a majority of seats. This also holds true for the next Congress.
What Will Congress Take Up In September?
There are only a few “must do” issues left in the remainder of the session. The primary one is funding the operations of the government. Currently, funding lasts only to October 1 and it is likely Congress will pass some sort of Continuing Resolution but for how long remains unknown. The CR could push off all decisions until after the elections in a “lame duck session” or push them into next year.
Treatment of expiring tax provisions -- some 50 of them- is another issue needing Congress’ attention, likely in post election session. The House and the Senate have taken very different approaches on the “extenders”.
There are a few other issues, such as Export-Import Bank reauthorization but not enough to keep Congress around after it returns. Of course, foreign and military issues could always pop up on an emergency situation.
Post Election Session
Democrats control Senate- The recalcitrance of Senate Majority Leader Reid (D-NV) in allowing Democrats and ergo the entire Senate to vote on issues viewed as politically risky for Senate Democrats prior to the election will be diminished if Democrats keep control the Senate. Senator Reid may attempt to push through various programs that earlier failed, this may include stalled nominations and there may be some pet areas that can be negotiated with Republicans
Republicans capture Senate- In the event Republicans capture a Senate majority, there would be no incentive for Republicans to cooperate with Democrats except on minor matters and possible consensus bills. Constructive business would likely be centering – at a minimum -- on any must do legislation and addressing a few nuisance items. Republicans can be expected to be very aggressive and this could lead to any early adjournment.
The Next Congress
Democrat Senate-Republican House- If Democrats continue to control the Senate; the 115th Congress is likely to be much like the current 114th. Politics will quickly become more complicated as Republicans will have to defend more than twice the seats as Democrats in 2016 -- Presidential election politics will skewer policy positions and debates. Perhaps, early in the year, there could be some movement on some issues. I have my doubts.
As an unpopular lame duck in his final two years, Mr. Obama is likely to gradually wane from view and influence in spite of his narcissistic nature, as the focus will turn to the national agenda of the respective parties and the candidates
Republicans control both Houses- This is by far the most interesting scenario but it is unpredictable what direction it will follow. Certainly, Republicans have repressed and pent up ambitions on pushing their agenda forward. As note above, there will be attacks on the programs of the last 6 years, including many of Obama’s “executive actions.” Some commentators believe this scenario provides an opening for compromise if the parties engage each other.
Compromise may be true on some issues but look for the Republicans to try to pull back the size and scope government and spending programs. Mr. Obama will use his veto on major changes but Republicans could win some battles.
President Obama will have a bit more than two years left in office after the election. Failing some dramatic change or outside events altering the political landscape, those two years will be dominated by much of what we see now. The Obama team will continue to try to reshape government through extraordinary executive actions and regulations and selective enforcement of laws.
The mid-term election is getting closer. It is clearly dominating the political scene in Washington. Congress will be back in session in a few days but do not expect them to stick around long. The campaign trail is calling!!
With Congress returning only for two to three weeks in September, let us look at the state of play in congressional elections – as the traditional and serious kick-off of the fall elections is on Labor Day weekend.
A total of 471 Congressional seats made up of 36 seats in the Senate, (including three special elections), and all 435 seats in the House will go before the voters on November 4.
The GOP currently controls the House of Representatives with a 17-seat margin -- while Democrats outnumber Republicans, 53-45, in the U.S. Senate (with two Independents joining the Democrat caucus).
For Republicans to take the majority in the Senate, they need to take six seats currently held by Democrats and retain control of all seats currently held by a Republican. For Democrats to assume in the House majority control, a pick up of 17 seats is needed. With Congressional districts drawn as they are now, there really is no reasonable expectation the House will turn Democrat.
Six incumbent senators and 42 representatives are not seeking reelection. Additionally, three senators and six representatives left office early.
Of the 33 Class II Senate seats up for normal reelection, Democrats currently hold 20 and 13 by Republicans. Additionally, three special elections will take place in 2014 to fill vacancies that occurred during the Congress in Hawaii, Oklahoma and South Carolina. No change of party affiliation is expected in these special elections.
For Democrat incumbents, many of their seats up in 2014 are in “red” states carried by Mitt Romney in the 2012 presidential election, including Alaska, Arkansas, Louisiana, Montana, South Dakota and West Virginia. There is a strong consensus among election watchers; Republicans have a solid hold on picking up Democrat seats in Montana, South Dakota and West Virginia.
The 2014 Senate elections are not shaping up to be particularly favorable for the Democrats. While there are still scenarios where they could walk away, breaking even, or even gain a seat or two, those scenarios are somewhat limited. At this point, however, incumbent Democrats in North Carolina, Louisiana and Arkansas are doing better than many pundits anticipated. Still, these seats are in the “toss up” or “leans Republican” categories. Current predictions vary, but seem to center around Republicans picking up between five and seven seats, with the overall range of possibilities a bit wider.
There are 45 Democrat seats deemed safe or not up for reelection as against 46 for Republicans. Included in the Republican total are likely or expected switches from Democrat to Republican in West Virginia, South Dakota and Montana.
Currently, there appears to be a consensus that there 9 tossups-7 Democrats and 2 Republican. Not much margin for error. The tossups are:
If the Republicans hold their 2-tossup seats, then they need to win only 3 of the remaining seven-tossup states held by Democrats, assuming no surprises anywhere else. This is a definite possibility, although each state and candidates have to be examined on an individual basis.
The explanations for this state of affairs centers around three different factors: the President is widely unpopular, the president’s party always loses seats in midterm elections, and the Democrats won a number of seats in 2008, setting them up to defend a large number in 2014. It is, no doubt, more complicated. Many issues -- foreign and domestic -- national and local-economic and social have not been addressed much less resolved by elected officials. There is divisiveness and rancor between both parties in Congress and the Administration does not seem to like either party.
No matter what the results, President Obama will have a bit more than two years left in office after the election. Failing some dramatic change or outside events altering the political landscape, those two years will be dominated by much of what we see now. The Obama team will continue to try to reshape government through extraordinary executive actions and regulations and selective enforcement of laws.
I will make my predictions in October.
I was having a discussion yesterday with an unabashed liberal, who is also a tax novice, about the possible tax inversion proposed by Burger King and the Canadian restaurant chain Tim Horton. I will not go into the mechanics of a tax inversion but it is essentially a mechanism to move the tax venue of a company to a more friendly tax jurisdiction to lower the overall corporate tax burden. It is also the tax topic dejure at the Treasury Department and in Congress.
Using such schemes to lower the taxes of a company I was told was unpatriotic and un-American. Big corporations have plenty of money and it is their obligation and duty to pay more. Furthermore, it is an ungrateful act as this great country provided the foundation to allow these companies to prosper. Good point on that one. The question was put to me; did I support this obvious form of shirking responsibility? Good question.
I relied; I thought it was an unfortunate result of a broken tax system that has not adapted to the new rules of international business.
I made the following points:
None of my points made a difference. I got a repeat of the unpatriotic mantra and the point that more taxes are needed to spend on more social programs. (Which I think means more redistribution to those that do not pay taxes at all) Neither one of us changed our opinion as usual.
Then today, a gift from heaven. Hard to make this up. It is the kind of stuff I pray for, the kind of stuff that is so entertaining because it exposes the hypocritical nature of people.
The deal between Burger King and Tim Horton was announced today. Help financing the transaction will be best-known tax raiser advocate of all—Mr. Warren Buffet and his company Berkshire Hathaway. They will buy $3 billion worth of preferred shares in the new company paying an annual dividend of about 9 percent, according to a version of a story I read. Nice, 9 percent is a good return given current low interest rates.
The deal frees up Burger King to move its domicile to Canada from Miami. I do not know what will be the eventual tax saving, but is bound to be significant once it is accomplished. And here is one more interesting fact, a Brazil-based investment firm controls Burger King and will retain majority control of the combined company. So much for American.
The decision of Mr. Buffet is based on business and I do not blame him for that. But, to embrace the inversion benefits in light of his tax raising posture is hypocritical. Mr. Buffett is an Obama favorite but the White House has targeted raising more taxes as a centerpiece of its policies and lately particularly inversions. However, I doubt the White House will diss their tax raising champion, a White House that named a tax-raising proposal (“the Buffett Rule”) after him.
My friend did not want to discuss this issue this morning. Did not want to be horrified Mr. Buffet could be un-American.
These trends to move companies out of the country and tax policies that lock out investment from reentering the economy are troublesome. I do not moan for these corporate giants. They are so big, they cannot be hurt. However, this trend will continue until the corporate tax system is completely revamped.
In the meantime, as I said, hard to make this stuff up but it is entertaining to see real hypocrites in action.
I am writing an analysis for a client of the various aftermaths of the mid-term elections coming up on November 4th. I look at polls, trends, the quality of the candidates, voting trends, local issues, fund raising, and read the opinions and research of the professionals, talking heads, pundits and assorted gurus. My mission is to give a strategy of what may happen in Congress depending on the election results. It is not all this simple but if Republicans control Congress, things will be much different than if the government remains divided. It will either happen or it will not.
However, besides the election results, the 2016 Presidential campaign starts in earnest-albeit unofficially and artificially- the day after the election. I was thinking about various candidates and eventually came across an article on Hillary Clinton. In essence, the author (a Democrat) was questioning the viability of Mrs. Clinton even though she has many devoted followers and supporters.
I then came across an article on Mitt Romney and how hard he was supporting Republicans all over the country, felt vindicated when compared with the performance of the President. Then the bomb came—Mitt Romney will run again and be the nominee heading the Republican 2016 ticket. Tell me it is not so, not possible.
Mitt Romney is a very talented man, qualified to be President. Probably should have been elected President, particularly seeing the way the government operates or does not operate now. Much of what he said in the 2012 campaign has proven to be true, including the mal intentions of Russia.
The problem is Mitt Romney is the modern day Adlai Stevenson. Romney is a very capable man but not going to win. Stevenson was Governor of Illinois when he received the 1952 Democratic Party's nomination for President even though he had not campaigned in the primaries. Stevenson was defeated in a landslide by the Republican former war leader Dwight Eisenhower. Stevenson was again the Democratic presidential nominee against Eisenhower, and this is the important part he was defeated in an even bigger landslide in 1956. I fear Romney equal Stevenson. There is, of course, the example of Richard Nixon being defeated for President in 1960 and then two years later for Governor of California only to be elected President in 1968 but Romney is no Nixon, thank goodness and political dynamics have changed.
The political process will winnow lots of Republicans out. There are a number of highly qualified people who will contemplate running for President. I hope one is not Mr. Romney. Like the Democrats with Mrs. Clinton, the Republicans need to do something different and not choose Adlai Stevenson redox.
Congress is gone for another 3 weeks or so. The President is on “ vacation” as if it matters at all. So, in a certain respect the country is safe for a while. Safe in a sense that no bad laws can be considered, voted on or in the case of the U.S. Senate never voted on. In a way, the noise level is down, it is almost quiet in town. Traffic greatly diminished, an easy commute. I love Washington in August.
It does not mean any problems are being solved or managed. There is a linty of foreign issues, tinderboxes, wars, killings, and flash points.. Hard to even remember all of them— Obama’s and Secretary Of State Clinton Libya fiasco, the red line joke in Syria, the ill advised total pull out in Iraq leading to chaos, Afghanistan, and unabated nuclear weapon development in Iran. Let’s not forget, Gaza, Kurdistan, ISIL terrorists, Crimea annexation, Ukraine separatist, oh and yeah, the jet liner being shot down. Big consequences paid by Russia supporting that, I think 6 more people were denied visas to Disneyland as our reprisal.
On the home front, more or less of the same. Ten of thousands new illegals have streamed over the border. Whoa, what to do? A killing and subsequent riots in Missouri, a real tragic and symbolic mess. Now, there is a tragedy to exploit.
Federal government still borrowing, deficit still growing. Did I see the Social Security disability fund will be broke next year? Is anyone surprised at that? Let’s not forget the outrageous conduct of the IRS and the bungling and deception of the Veterans’ Administration. Oh yeah, guess what? Health insurance premiums are going up under the Affordable Care Act. I am confused, weren’t we all going to save money?
Mid-term elections are going to happen in about 75 days. Democrats are scared, saddled with the Obama unpopularity, incompetence albatross around their neck. I am not sure the protection of Senate Majority Leader Harry Reid (D-NV) preventing Democrats from voting on most anything will save the 8 or so endangered colleagues that comprised his majority. Republicans are not really offering practical solutions but then again seem to be in better shape nationally. It will be interesting. The country seems bewildered, frustrated and angry.
One thing is for sure; it looks like the 2016 Presidential campaign is under way. I am already tired on seeing, reading and hearing about about Hillary Clinton. More on her later.
Congress limped out of town on Friday. Largely due to the intransience of Senate Majority Harry Reid (D-NV), not much was accomplished in the first eight months of this year. In fact, Senator Reid has made into an art form not allowing any kind of democracy to work. Legislative process, forget it. I find the tactic both dangerous and distasteful. He is shameless and does the country of great disservice.
In any event, The House and Senate are scheduled to be out of session for a five-week August recess, returning Sept. 8. I am not sure how August got 5 weeks but then again it is Washington. One thing is also certain is the country cannot be damaged any further with Congress gone except the President is still on the loose but not doing much constructive. The relevance of Mr. Obama continues to track his dismal performance.
After coming back from the “recess” and I do not say vacation because our elected officials do work hard, but neither chamber is expected to hang around long before recessing for the November elections.
Not to be accused of any thing that could be viewed as responsible, Senate Majority Leader Reid already has indicated the Senate has an adjournment target date of September 23, or in session for a total of about two weeks. Cannot even make it to October.
The House is not any better with a target adjournment date is Sept. 19. Well, why not leave, nothing really to do? The Senate almost never takes up House passed bills. The House has passed 7 appropriations bills; the Senate has not even had a vote on one, nary a single floor vote. None, I mean what are those guys doing?
About the only thing left for this pitiful Congress is to reach an agreement to fund the government beyond the end of the fiscal year on September 30th. Call it a day and then let the country vote.
One thing that can be said at this particular stage in the deliberations of Congress, there is considerable activity. Results, of course, are a different matter.
The House has passed seven fiscal year 2015 appropriations bills: military construction, Veterans Affairs, Legislative, Transportation Housing and Urban Development, Defense, Energy-Water and Financial Services. Meanwhile, the Senate has yet to pass any appropriations bills for fiscal 2015 due to an ongoing disagreement over amendments.
A stopgap measure to keep the federal government operating past September 30 through the midterm elections appears likely.
Legislation to accomplish any type of policy is now almost exclusively attempted in appropriation bill. The House continues to pass a variety of bills but almost all end up in the dead end clutches of Senator Majority Leader Harry Reid (D-NV), never to be considered. Senator Reid has refused to bring up any bill that could be an avenue for Republican amendments, throttling even popular proposals from his won party. This stalemate will continue, leading to an embarrassing end for all.
Republicans are using the only weapon at their disposal, mainly looking to roll back a number of the Obama administration's most contentious regulations by strangling the funding for dozens of rules that Republicans view as overly burdensome, unnecessary or beyond the scope authority.
Most of the attention focused on Environmental Protection Agency (EPA) regulations but the scope of the effort goes beyond and is threaded throughout the appropriation process. While none of the House spending bills will pass “as is,” Republicans hope some of the provisions will find a way into spending legislation needed to keep the government running once Congress formally gives up on the appropriations process.
The Administration, just to complete the tone of the day, is inundated with scandals, investigations, charges of incompetence, adverse foreign events, and a flood of people illegally crossing the border. The list is long, hard to keep track. The President is at historical lows in the polls and it is difficult to see how this trend can significantly reverse itself. However, one thing to always remember is that Mr. Obama still has 2 plus years in office.
Almost every action, movements, decisions is couched in political terms for both parties, each seeking what it thinks is an advantage towards the election in November. While voting is still about 4 months away, Republicans seem to have some momentum and more than likely will retain control over the House and now have a good chance to gain the necessary seats to control the Senate. Therefore, it is important to think about:
We will leave those questions to a later time.
Administration: Feckless foreign policy, dismal poll numbers, public losing any confidence in competence Down Grade: Grade F but still can go lower
Senate: Reid poisoned about everything, Wants out of town. Shameful performance. Soon to be interviewing for new job. Steady Grade: Grade F
House: Just running out clock after a few political votes. Republicans to return next year. Grade Stable: Grade D
I have developed a three-part series on what is wrong with the tax system and suggestions to fix it. Not your usual plan but one making choices to improve the system. Become tax czar with me for a day and suggest your changes with some unexpected ideas.
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Mr. Nutter was previously Tax Counsel to the US Senate Finance Committee and has been involved in several US presidential campaigns.
He has been in private law practice and worked in the former Soviet Union, Europe and Africa for 15 years on private investment and government projects.
He holds a Master of Laws (taxation) from Georgetown University Law Center and a Doctor of Jurisprudence from the University of Arizona College of Law. He has been published in numerous tax journals and magazines.
Reach Jack by e-mail here.