While you were sleeping, the Senate passed the Senate GOP tax bill in the wee hours of Saturday morning on a party line vote of 51-49, with only Senator Bob Corker (R-TN), who is retiring, having the courage of his convictions to vote no. Senate passes tax overhaul, securing major GOP victory:
Vice President Pence presided over the final passage vote. GOP senators, who stayed on the Senate floor until the vote closed after midnight, broke out into applause after Pence announced the bill had passed.
“This is a great day for the country,” Majority Leader Mitch McConnell (R-Ky.) said during a 2 a.m. press conference after the vote.
The headline from The Hill above is typical of the headlines appearing in other media today: a “major GOP victory.” The media makes it appear as if this bill has been enacted and awaits president Trump’s signature. This is reminiscent of president Trump and House Tea-Publicans kegger party at the White House after the House voted to repeal “Obamacare,” only to see it defeated in the Senate.
The Senate GOP tax bill could be voted upon by the House without any amendments, but that is highly unlikely because it contains provisions which are opposed by the radical GOP House Freedom Caucus. This bill is headed to a conference committee where the Senate and House versions of the bill will be reconciled into a conformed bill which both chambers must pass. There is still a chance that this terrible tax bill can be defeated in the next round.
And I would point out to the media that this was a “major victory” for millionaire and billionaire GOP campaign donors, because they are the ones who demanded this terrible tax bill in exchange for their campaign donations and they are the only ones who will ultimately benefit from the GOP tax bill in the end. The U.S. government does not represent the interests of the majority of the country’s citizens, but is instead ruled by those of the rich and powerful. Major Study Finds The US Is An Oligarchy. And the lickspittle GOP servants of corporations and plutocrats who voted for this bill? Millionaires’ Club: For First Time, Most Lawmakers are Worth $1 Million-Plus. They voted to benefit themselves as well, the American people who elected them be damned.
They are empowered by the same ignorant rubes who voted for an obvious grifter and con man who claimed to represent their economic interests and would “make America great again.” Robert Kuttner writes, Trump Ran for the ‘Forgotten.’ Then He Forgot Them.
How does President Trump continue to pass for an economic populist even as his policies and appointees are those of an economic royalist? The Republican tax plans he supports are a prime example: They favor corporations and upper-bracket individuals and rely on the long-discredited “trickle down” theory to offer benefits to workers.
Mr. Trump’s key economic posts have gone to Wall Street veterans. Most recently, he nominated Jerome Powell — a partner from 1997 to 2005 in the Carlyle Group, one of the largest private equity firms — to be chairman of the Federal Reserve.
The president’s other top economic officials are either investment bankers or private equity managers. Gary Cohn, who heads the National Economic Council, and Treasury Secretary Steven Mnuchin both came from Goldman Sachs. Mr. Trump’s commerce secretary, Wilbur Ross, is another prominent private equity operator.
In 2002, Mr. Ross bought several steel factories that had been closed; he reopened them after persuading the steelworkers union to take major cuts. When he cashed out three years later, he made 14 times his original investment of $90 million. According to the economists Eileen Appelbaum and Rosemary Batt, “his three-year investment netted him $4.5 billion — just equal to what retirees lost in their health and pension plans.”
This is an administration run by and for financial engineers. The president’s policies have sought to gut what remains of the Dodd-Frank Act and other legislation that protects consumers from financial wrongdoing, most recently in his assault on the Consumer Financial Protection Bureau.
Despite Mr. Trump’s campaign promises to eliminate the carried-interest loophole — which taxes the fees of private-equity fund managers and other investment managers at low capital gains rates instead of at higher income tax rates — the House and Senate plans leave it intact.
Mr. Trump’s administration rewards what we might call an “extraction economy.” Rather than adding value, financial engineers often extract as much as they can — from operating companies that they buy, strip and sell as well as from consumers, borrowers, workers and other taxpayers.
Private equity epitomizes financial engineering. The very term “private equity” is a sly rebranding of what used to be called “hostile takeovers” or “leveraged buyouts.”
For the most part, private equity companies don’t contribute equity capital. They do the opposite — loading up the enterprise with debt, paying themselves large fees, cutting jobs and wages and extracting cash, rather than investing in the health of the enterprise. When an operating company is stripped of assets and loaded with debt to the point that it can’t continue, private equity owners then use the bankruptcy code to exit and move on, having already taken exorbitant profits.
Much of the undertow on wages and job security is a result not just of global competition or automation but also of private-equity ownership of some $4.3 trillion worth of operating companies, in sectors that include retailing, hospitals, nursing homes, newspapers, rental housing, private prisons, for-profit child care, payday lenders and private universities, employing well over 10 million workers and affecting millions of others. These, as it turns out, are the industries in which Trump voters often work.
The operating companies, taken into and out of bankruptcy, are household names, like Toys “R” Us, Radio Shack and Albertsons. But the maze of private equity firms, with names like Carlyle, Cerberus and Blackstone, are not.
When Mr. Trump was elected, his story was that the Wall Street influence would be offset by self-proclaimed economic nationalists, such as the chief strategist Stephen Bannon and the trade negotiator Robert Lighthizer. Mr. Bannon had counseled bringing back manufacturing, investing heavily in infrastructure, getting tough with China and taxing the rich. Economic nationalism, Bannon-style, might actually deliver something tangible to Mr. Trump’s base.
Today, Mr. Bannon is long gone from the White House, busy settling scores with Mitch McConnell. Getting tough with China on trade issues has taken a back seat to enlisting Beijing’s cooperation on North Korea. After a blitz of corporate lobbying, Nafta renegotiation drags on. The power struggle at the White House between the nationalists and the globalists from Goldman is being won by the usual suspects.
Why don’t Trump voters get that they are being had? Four basic reasons, I think.
First, there is oft-remarked displacement of pocketbook grievances by cultural resentments. But there are three other, more subtle causes.
For starters, the sources of economic assault on regular people are opaque. Investment banking and private equity are cloaked in obscurity. The health, safety, labor, environmental and financial regulations being gutted are intelligible only to specialists.
Also, Americans famously identify upward. Most don’t mind if billionaires get tax breaks as long as they get a little something, too.
Last, despite their tough resistance to the tax bills, Democrats often blur differences. Several key top officials of both the Clinton and Obama administrations came from Wall Street, and then went back to Wall Street. Mr. Obama’s Treasury secretaries, Jack Lew and Timothy Geithner, went to work for private equity companies.
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Will Trump voters connect these several dots? I doubt it, unless Democrats will offer something persuasively better.
What the Septuagenarian Ninja Turtle, Senate Majority Leader Mitch McConnell, pulled in the Senate was a mockery of the democratic legislative process and is legislative malpractice. It was the heavy-handed act of an authoritarian (Oligarchy) regime.
This tax bill was drafted by Senate GOP leadership in secret without Democratic input, committee hearings, stakeholder or public testimony or input (both stakeholders and the public are opposed to this terrible bill), and was just introduced last week, with only a markup before the Senate Finance Committee which reported out the bill on a party-line vote, so that it could be rushed to a vote by the end of this week before anyone could discover what is actually in it.
And none of the GOP senators who voted in favor of this bill can honestly say that they actually read the bill or even knew what was in it because illegible handwritten changes were being made in the margins of the draft bill reported out by the Senate Finance Committee. Read the Senate GOP’s 479-page tax bill (Scribd). Dems rip GOP over handwritten changes to tax plan:
Senate Democrats on Friday ripped Republicans for making last-minute handwritten changes to a version of the tax reform legislation mere hours before the chamber is expected to vote on it.
“They are scribbling changes in the margins. What could possibly go wrong,” Sen. Brian Schatz (D-Hawaii) tweeted, with a photo showing a column of scribbled notes next to a section of the lengthy bill.
The version of the bill Democrats are criticizing does not include a final GOP amendment that hasn’t been filed yet.
“Trying to review the #GOPTaxScam but they are making hand-written changes to brand new text as we speak – can anyone else read this?” tweeted Sen. Dick Durbin (D-Ill.), sharing the same page of the law.
Durbin also criticized the process on the Senate floor, saying the GOP wrote out the bill “in longhand” and provided an illegible “work product” to lobbyists before handing it over to the senators voting on it.
Multiple senators criticized the GOP for making handwritten changes, including Sens. Bob Casey (D-Pa.), Bob Menendez (D-N.J.) and Jon Tester(D-Mon.). House Minority Leader Nancy Pelosi (D-Calif.) also joined the criticism.
Finally, the Congressional Budget Office (CBO) the Senate GOP tax plan will increase the deficit by more than $1.4 trillion over a decade. CBO: Senate tax bill increases deficit by $1.4 trillion:
The legislation, according to CBO, would have the largest deficits between the 2019 fiscal year and the 2022 fiscal year.
The finding comes as GOP senators have largely ignored warnings that their tax plan would increase the deficit. Republicans argue that economic growth will more than make up for any increases to the national debt.
Blind faith in the trickle down tax fairy, unicorns and rainbows. God save us.
This fight is not yet over. There is still a reconciled conformed bill which both chambers must pass. There is still a chance.