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Washington Report September 29, 2017

29 Sep 2017

Washington Report September 29, 2017

GOP Framework … Tax Reform … Life & Death Of Graham-Cassidy …. The Myth Of McConnell … Alabama Blueprint … Dem Blueprint … The Divider-In-Chief … It’s Not About The Flag … Little Rock at 60 … Apology Tour … Facebook’s Frankenstein Problem … and other news of the week.

For those of you who haven’t heard, I’m pleased to announce the appointment of Will Stone as President of Capstone National Partners. Will joined Capstone’s D.C. office in early 2016 and we are all thrilled that he has agreed to take the lead in Capstone’s future growth. Click here to read the full announcement.

Best,

Joyce Rubenstein
Capstone National Partners

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GOP Framework To Revamp The U.S. Tax Code

WashPost “Republican leaders on Wednesday proposed slashing tax rates for the wealthy, the middle class and businesses while preserving popular tax deductions that encourage buying homes and giving to charity, hoping to unify the party behind a proposal to revamp the U.S. tax code. But the nine-page framework they released to kick off negotiations left many key questions unanswered, including how they plan to avoid adding trillions of dollars to the government’s debt. The framework leaned heavily on limiting taxes paid by the wealthiest Americans, such as the alternative-minimum tax, and opposition to these changes from Democrats suggest it will be a battleground as negotiations intensify. Republicans were also careful not to identify numerous tax breaks they might remove, focusing instead on promises to lower rates.”.

Politico “Senate Republicans pivot … to a massive tax overhaul, according to draft budget legislation released Friday. The budget document is a key precursor for any tax bill, setting out procedures that will allow the legislation to pass with a simple 51-vote majority rather than the usual 60-vote supermajority. According to the draft released Friday, the Senate Finance Committee and House Ways and Means Committee will have until Nov. 13 to draft tax bills that cost no more than $1.5 trillion in lost revenue.

“Republicans believe they will offset that lost revenue with increased economic growth prompted by the tax plan. The Senate GOP budget is set to balance in 10 years, assuming average economic growth of 2.6% — the same assumption made in the pending House budget, according to the draft.”

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Most Experts Disagree

“Not only will this tax plan pay for itself, but it will pay down debt.”
– Treasury Secretary Steven Mnuchin on tax reform

The national debt topped $20 trillion for the first time ever this month, yet Senate Republicans agreed to a budget deal that would allow them to pass as much as $1.5 trillion in tax cuts without spending reductions or revenue offsets to pay for them. “Senate Majority Leader Mitch McConnell (R-Ky.) has repeatedly called the debt ‘unsustainable’ and ‘alarming,’ even going so far as to say in 2013 that it ‘makes us look a lot like Greece.’ Yet McConnell was the one who held the meeting in his office to broker the red-ink deal,” Heather Long notes.

THAT TOOK ABOUT TWO SECONDS NYT’s “Republicans’ release of a sweeping plan to rewrite the tax code has set off a scramble among Washington lobbyists and trade groups to protect valuable tax breaks and other long-ingrained provisions. The plan’s scant details make it hard to know what, exactly, is on the chopping block. But within hours of the plan’s unveiling on Wednesday, flash points emerged over measures that supporters said could hurt the housing market, raise borrowing costs and increase the tax burden on families in high-tax states.

FACT CHECK: “Gary Cohn (Trump’s Chief Economic Advisor) says a typical American family earns $100,000 a year — here’s how much they really make,” CNBC “In actuality, the average American family makes $74,000 a year before taxes, or about $26,000 less than that, according to the Bureau of Labor Statistics. The median American family income is roughly half of Cohn’s estimate, or only about $55,000. And some critics are seizing on Cohn’s assertion that, with $1,000, a family ‘could renovate their kitchen, they could buy a new car.'” Trump’s Tax Cut Fate in the Hands of These Six Key GOP Senators“: “Bob Corker … John McCain … Rand Paul … Pat Toomey … Orrin Hatch … Susan Collins”. (Bloomberg)

Republican Tax Plan Hits First (of many) Hurdles

WSJ “A day after announcing their ambitious tax plan, Republicans debated scaling back one of their largest and most controversial proposals to pay for lower tax rates: repeal of the individual deduction for state and local taxes. …The fight over the state and local deduction, with more than $1 trillion at stake over a decade, is an early signal of the bruising battle ahead for Republicans trying to pass a tax bill that hasn’t garnered Democratic support and that faces narrow GOP margins in the House and Senate. It is the most obvious case of a bloc of pivotal lawmakers holding a specific concern, but it won’t be the only one. ‘The notion that you fix this and then it’s smooth sailing?’ Mr. Roskam (R-IL, Ways & Means) said. ‘How naive.'”

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Life & Death Of Graham-Cassidy

Politico “The decision on Tuesday not to vote on the Graham-Cassidy bill marked the fourth Obamacare repeal bill failure since the summer began. .. it ran into the same hurdles that killed every other GOP health plan. Ultimately, a number of Senate Republicans remain wary of transforming the U.S. health system in such a haphazard process — especially with plans to make deep cuts to Medicaid and roll back protections for people with pre-existing conditions. What hasn’t changed is that there are three hard “nos” against Obamacare repeal: Sens. John McCain of Arizona, Rand Paul of Kentucky and Susan Collins of Maine, not to mention other quietly skeptical senators. In fact, Graham’s best friend, McCain, turned out to be more out of reach than the moderate Murkowski. The Arizona senator left a closed-door meeting of Senate Republicans on Tuesday holding an article listing the problems his state would see if the bill became law, as he grumbled to reporters about the rushed process to write the bill.

“There was no point. Everyone knows where I am,” McCain said Tuesday in an interview. “I’ve said incessantly I want hearings, I want votes, I want input.”

NEXT STEP A pair of deal-making senators is inching toward a bipartisan agreement to fund Obamacare’s insurance subsidies and provide some certainty to health insurance markets just two days after the GOP’s latest Obamacare repeal effort failed. “Senate Health, Education, Labor, and Pensions Committee Chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.) are moving toward a plan to stabilize Obamacare in the short term after meeting on Wednesday. Though they have not yet clinched a deal, their progress could ignite a new battle over how or whether to improve the law. ‘Maybe by the end of next week, we will go and hand a piece of legislation to Sen. [Mitch] [Mitch] McConnell and Sen. [Chuck] Schumer,’ Alexander said on Thursday..

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The Myth Of McConnell, Political Super Genius

“The Senate majority leader has been coasting on an inflated reputation for too long. This week exposed just how little he has achieved” … “For the uninitiated, the Myth goes something like this: A calculating Kentuckian, he sees three steps ahead while playing eight-dimensional chess on his solved Rubik’s cube with one hand, while using the other to hold an inside straight close to his vest, which is embroidered with Masonic secrets that only he can read and that unlock true mastery of the Senate, along with eternal enlightenment, for good measure. “In the Myth of McConnell, grand achievements are conjured out of last-minute, crisis-driven exercises in can-kicking-like extending the U.S. borrowing authority and government funding-all things that used to happen routinely before McConnell became leader of the Republican Caucus and unleashed his unique brand of unprecedented obstructionism on the Senate, manufacturing the very crises that made the last-minute deals necessary. Meanwhile, humdrum political events, like winning reelection in a deep red state in a strong year for Republicans-as McConnell did in 2014-are recast as achievements of Machiavellian brilliance.” Great Read … Read Politico Magazine Article.

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Regulating Silicon Valley

“Silicon Valley has long enjoyed a hands-off approach from regulators and has become a major lobbying force in Washington in order to keep things that way, but that attitude appears to be shifting quickly. Last week Sens. Amy Klobuchar (D-Minn.) and Warner urged colleagues Thursday to support a bill that would create new transparency requirements for platforms that run political ads online akin to those already in place for TV stations … Lawmakers from across the political spectrum — from Sen. Cory Booker (D-N.J.) to Sen. Ted Cruz (R-Tex.) — have called for more scrutiny into the market power of technology companies over the last few months.” (WashPost)

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The Big Picture

TRUMP BEGINS TO ALTER AMERICAN LIFE Reuters “Even without delivering on his biggest campaign promises, President Donald Trump has begun to reshape American life in ways big and small. Over his first nine months, Trump has used an aggressive series of regulatory rollbacks, executive orders and changes in enforcement guidelines to rewrite the rules for industries from energy to airlines, and on issues from campus sexual assault to anti-discrimination protections for transgender students.

While his administration has been chaotic, and his decision-making impulsive and sometimes whimsical, Trump has made changes that could have far-reaching and lingering consequences for society and the economy. Some have grabbed headlines but many, no less consequential, have gone largely unnoticed amid the daily controversies and Twitter insults that have marked Trump’s early months in office. Under Trump, oil is flowing through the Dakota Access Pipeline. Arrests of immigrants living illegally in the United States are up. More federal lands are open for coal mining. The administration has left its mark in smaller ways, as well. Trump has rolled back or delayed Obama-era rules and regulations that protected retirement savings … made it harder for companies that violated labor laws to land federal contracts and restricted what internet service providers could do with their customers’ personal data.

Those kinds of low-profile policy shifts are far from the dramatic change promised by the headline-loving Trump, who won the White House with a vow to fundamentally reshape Washington. But the effects can be just as real.”

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Insurgent Wins In AL

Politico “Insurgent Roy Moore’s rout of incumbent GOP Sen. Luther Strange in Alabama’s special election Tuesday has senior Republicans bracing for a wave of resource-draining primaries across the map that could undermine their best-laid plans to defeat Democrats in 2018. Moore’s win — over an incumbent who benefited from +13 million in spending by a super PAC aligned with Senate Majority Leader Mitch McConnell — is certain to provide fuel for conservative challengers lining up to take on sitting senators in states like Arizona, Nevada and Mississippi. The result was a major setback for President Donald Trump, who went all-in for Strange in a state where the commander-in-chief is overwhelmingly popular. And it emboldened Trump’s former chief strategist, Steve Bannon, who said the Alabama race is the opening front in a pitched midterm war against GOP incumbents — and an opportunity to undermine his nemesis, McConnell. After the race was called, Bannon stood backstage with Moore as the victorious candidate prayed.”

Alabama Blueprint

“We’re going to war,” “This is not a pillow fight, this is a fight fight.”
-Bannon said in an interview.

‘Alabama Victory Provides Blueprint for New Bannon Alliance’ NYT’s “Stephen K. Bannon and two of his longtime benefactors are putting together a political coalition designed to ensure that the victory of a Republican insurgent in the Alabama Senate primary this week was just the beginning of the surprises that await the party establishment. … [T]he Bannon-Mercer alliance is likely to be a potent factor in widening the divisions laid bare by the Alabama race and the intraparty battles that have crippled the Republican agenda in Congress. It could put Mr. Bannon and the Mercers on a collision course with not just the Republican establishment but with other donor-driven political organizations, including the one built by the billionaire brothers Charles G. and David H. Koch – and potentially with Mr. Trump.”

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Dem Blueprint

“Bernie backers give Dem incumbents a pass in 2018” Politico “Democrats have long been terrified that the Sanders-Clinton slugfest of 2016 would set off a prolonged civil war in the party, forcing incumbents to fight off primary challengers from the left in Senate and gubernatorial races. It hasn’t happened. In a surprising reversal of the post-2008 dynamic – when Republicans were shut out of power, then saw a raft of tea party primary challengers take on their incumbents – Democrats have largely been spared of that predicament. … ‘What Democrats right now care about more than anything is winning,’ veteran Democratic pollster Jefrey Pollock said of divisive Democratic primaries. ‘I don’t think the ultra-progressives have abandoned their principles – not at all – but I think they looked at the challenge and said, ‘This is not the right place.'”

Arizona

Democratic Rep. Kyrsten Sinema (pronounced Cinema) officially launched a Senate bid Thursday, ending months of speculation about whether she would challenge Arizona Republican Jeff Flake, an outspoken Trump critic. Flake also faces what is shaping up to be a tough primary challenge from former state Sen. Kelli Ward. (Arizona Central)

 

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The Supremes

The Supreme Court agreed to hear another challenge to organized labor and the mandatory payment of fees to public employee unions by nonmembers, after justices deadlocked on the issue last year following Justice Scalia’s death. Now, conservative groups say they are hopeful Neil Gorsuch will provide the tiebreaking vote.(WashPost)

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Most of America Is Deteriorating

Axios Economic prosperity is concentrated in America’s elite ZIP Codes, but economic stability outside of those communities is rapidly deteriorating. That’s the stark conclusion in one of the most sobering pieces we have run in the eight months since we launched.

  • What that means: U.S. geographical economic inequality is growing, meaning your economic opportunity is more tied to your location than ever before.
  • A large portion of the country is being left behind by today’s economy, according to a county-by-county report released this morning by the Economic Innovation Group, a non-profit research and advocacy organization.

Key findings:

  • New jobs are clustered in the economy’s best-off places, leaving one of every four new jobs for the bottom 60% of ZIP Codes.
  • Most of today’s distressed communities have seen zero net gains in employment and business establishment since 2000. In fact, more than half have seen net losses on both fronts.
  • Half of adults living in distressed ZIP Codes are attempting to find gainful employment in the modern economy armed with only a high school education at best.
  • The healthier the economy, the healthier the person: People in distressed communities die five years earlier.

The map: The fastest growing Western cities (such as Gilbert, Ariz., and Plano, Texas) and “tech hubs” (Seattle, San Francisco, Austin) dominate the list of the most prosperous cities in the country. Cities that were once industrial powerhouses in the Midwest and Northeast, like Cleveland and Newark, are now more likely to be on the distressed end of the spectrum.

  • The cycle: Fewer new companies are forming than ever before, which disproportionately hurts distressed communities. The new businesses that do get started are often located in thriving communities where educated workers are. So talented people are forced to leave places with little economic opportunity — even if they have personal and family reasons to stay — to move to those where there is opportunity.

This isn’t a Republican or Democratic problem. At every level of government, both parties represent distressed areas. But the economic fortunes of haves and have-nots have widened the political chasm, which hasn’t been addressed by substantial policy proposals from either side.”

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The Great Divider-In-Chief

Most divisive president in recent history … WashPost/ABC News Poll September 24, 2017
President Donald Trump faces deep challenges on international and domestic issues alike, with a job approval rating mired in historic lows, a broad sense he’s done more to divide than unite the country and a high level of public distrust that he’ll act responsibly in dealing with North Korea.

  • ON NORTH KOREA … the public by a wide 62-37 percent does not trust Trump to act responsibly in handling the situation. Compare that with trust in U.S. military leaders; at 72 percent, it’s about double the level of trust in their commander-in-chief.
  • AT HOME … His approval rating is the lowest of any president at eight months in office in polling back 71 years. The public by 66-28 percent says he’s done more to divide than to unite the country, considerably worse than the highest “divide” scores for his two predecessors, Barack Obama and George W. Bush, both 55 percent. And despite his “drain the swamp” promise, Americans by 59-39 percent say Trump has not brought needed change to Washington, 6 percentage points more than Obama’s worst rating on this gauge, which came after nearly two years in office.

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It’s NOT About The Flag

Donald Trump set off a national controversy over the role of politics in sports on Friday when he called for the firing of professional football players who protest racism and police brutality by kneeling during the national anthem before each game. “Wouldn’t you love to see one of these NFL owners, when somebody disrespects our flag, to say, ‘Get that son of a bitch off the field right now. Out! He’s fired. He’s fired!” said Trump at a rally for Alabama Senate candidate Luther Strange.

The Atlantic “At one stroke, thanks to an attempted vulgar display of strength, Trump changed the playing of the anthem and the display of the flag from a moment where all but the most radical Americans could unite to one where millions of well-meaning Americans could and did legitimately believe that the decision to kneel [or lock arms] represented a defense of the ideals of the flag, not defiance of the nation they love.

Following Trump’s inflammatory remarks after Charlottesville, Steve Bannon argued that racial politics redounded to benefit the president. Now, a Trump adviser tells Jim Acosta that the president is “winning the cultural war” and had “just made millionaire sport athletes his new” Hillary Clinton. And it may well be that this incident helps Trump not only with his core supporters but with other Americans as well, at least in the short to medium term.”

WashPost “Trumps Problem isn’t with athletes being political. It’s with athletes speaking out against racism.”

Little Rock Nine – Sixty Years Ago

The New Yorker “Sixty years ago, Central High School in LIttle Rock, Arkansas became a flash point in the nascent civil-rights movement when Governor Orval Faubus refused to abide by the Supreme Court decision in Brown v. Board of Education. Faubus famously deployed the state’s National Guard to prevent nine African-American students from attending classes at the high school.In the midst of the crisis, … Louis Armstrong … who was scheduled to perform in the Soviet Union as a cultural ambassador on behalf of the State Department, cancelled the tour—a display of dissent that earned him the scorn and contempt of legions of whites, shocked by the trumpeter’s apparent lack of patriotism. As the historian Penny Von Eschen notes in “Satchmo Blows Up the World,” students at the University of Arkansas accused Armstrong of “creating an issue where there was none,” and joined the procession of groups cancelling Armstrong’s scheduled concerts.” (interesting, isn’t it?)

Axios “… on September 25, 1957 … The lead that day by AP reporter Reman Morin: “Hardened paratroopers, in battle dress and with bayonets at the ready, brought nine Negro students quietly into Central High School Wednesday in a new climax to the hate-filled struggle over integration in Little Rock.”

  • Why it matters …”Six decades later, the sacrifice of those black students stands as a symbol of the turbulence of the era, but also as a testament to an intractable problem: Though legal segregation has long ended, few white and minority students share a classroom today.”

Thought bubble: Just 60 years! This astonishing scene was in the lifetime of so many people we know.”

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Apology Tour

WashPost “Bowing to pressure from Republicans on Capitol Hill and public criticism from President Trump, Tom Price announced Thursday that he will partially reimburse the government for the costs of his flights on charter planes in recent months @$51,887. He said he will no longer take private charters at taxpayer expense and plans to cooperate with the HHS inspector general, who last week launched an investigation into his travel practices.It came out last night that Price also used military aircraft for trips to Africa and Europe this spring, and to Asia in the summer, at a cost of more than $500,000 to taxpayers [bringing] the total cost to taxpayers of Price’s travels to more than $1 million since May. BTW, one of Price’s recent predecessors, Kathleen Sebelius, who served for five years under Obama, said she never took a military plane on her many trips overseas; she always flew commercially.”

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Speaking of Emails

Meanwhile, it’s come out that multiple White House officials – including Trump’s son-in-law and senior adviser Jared Kushner – have used private email accounts for gov business. Now the White House has reportedly launched an investigation into it.

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Trouble In Puerto Rico

“The Trump administration declared Thursday that its relief efforts in Puerto Rico are succeeding, but people on the island said help was scarce and disorganized while food supplies dwindled in some remote towns eight days after Hurricane Maria devastated the U.S. territory of 3.4 million people. President Donald Trump cleared the way for more supplies to head to Puerto Rico by issuing a 10-day waiver of federal restrictions on foreign ships delivering cargo to the island.”

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The Machines Are Running The Asylum

BuzzFeed “Mark Zuckerberg Can’t Stop You From Reading This Because The Algorithms Have Already Won” … Should Zuckerberg or Twitter CEO Jack Dorsey be summoned to Congress and peppered with questions about the inner workings of their companies, they may well be ill-equipped to answer them. Because while they might be in control of the broader operations of their respective companies, they do not appear to be fully in control of the automated algorithmic systems calibrated to drive engagement on Facebook and Twitter. And they have demonstrably proven that they lacked the foresight to imagine and understand the now clear real-world repercussions of those systems — fake news, propaganda, and dark targeted advertising linked to foreign interference in a US presidential election.” At the NYTs, Kevin Roose described it as Facebook’s Frankenstein problem — the company created a monster it can’t control. And in terms of responsibility, the metaphor is almost too perfect. After all, people always forget that Dr. Frankenstein was the creator, not the monster.

Read Entire Article Here.

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More Dangerous Than Nukes

Among tech industry critics, every advancement from Alexa to AlphaGo to autonomous vehicles is winkingly dubbed as a harbinger of a dystopian future powered by artificial intelligence. Tech moguls like Tesla and SpaceX founder Elon Musk and futurists like Stephen Hawking warn against nightmarish scenarios that vary from the destruction of the human race to the more likely threat that our lives will be subject to the whims of advanced algorithms that we’ve been happily feeding with our increasingly personal data. In 2014, Musk remarked that artificial intelligence is “potentially more dangerous than nukes” and warned that humanity might someday become a “biological boot loader for digital superintelligence.”

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Do I Even Know You Anymore?

Powerful Read. Click Here.

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