Co-published by International Business Times
On August 15, President Trump revoked an Obama-era order that directed federal agencies to revise flood maps and evaluate flood-avoidance rules for taxpayer-funded projects.
As Hurricane Harvey churned toward the Texas Gulf Coast last week, meteorologists, climate scientists and lay weather nerds on Twitter marveled at the crisp, detailed images of the storm sent to earth by a brand-new satellite. The nation’s first Geostationary Operational Environmental Satellite, GOES-16, had been launched from Cape Canaveral, Florida 11 days after the November election, and has since transmitted high-resolution pictures of smoke from Canadian wildfires, of the August 21 North American eclipse and of a major fog event that spread out over the Midwest and Eastern U.S. But it’s been the images of hurricanes — Hilary, Gert and now Harvey — that have most mesmerized and thrilled weather forecasters, who for the first time have been able to see the storms develop from tropical wave to threatening hurricane almost in real time.
GOES-16 scans the earth every 15 minutes and tracks active storms at intervals as short as 30 seconds. It tracked Harvey as far back as August 17, when it was a tropical storm with 40 mile-per-hour winds approaching St. Lucia Island in the Caribbean.
“This new satellite will save lives,” said Todd McNamara of the U.S. Air Force 45th Weather Squadron, in a NASA video released last year.
If President Trump’s budget blueprint for fiscal year 2018 passes muster in Congress, however, the agency behind GOES-16, the National Environmental Satellite, Data and Information Service, could be facing lean times. Weather satellites take years to design and build, weeks to successfully launch (GOES-16 was delayed when Hurricane Matthew skimmed the Florida coast last year), and a well-funded staff of scientists to interpret and distribute data. The satellite agency, a division of the National Oceanic and Atmospheric Administration (NOAA), already gets less than it asks for every fiscal year. Trump has proposed cutting its roughly $2 billion budget by 18 percent.
A proposed budget in the U.S. House of Representatives would cut the satellite program even more steeply, by 23 percent, although the Senate budget only asks for a six percent reduction. The White House Office of Management and Budget insists the funding is enough to maintain the “current generation” of satellites. But the lack of commitment to the program reflects the administration’s ongoing hostility toward any science and research that might advance our knowledge of the earth’s climate — even when that research clearly saves lives. Here are four other ways that Trump’s priorities could make managing future disasters more difficult — and dangerous — in the U.S.
Canceling New Flood Risk Standards On January 30, 2015, President Barack Obama signed an executive order establishing a Federal Flood Risk Management Standard, an effort to shore up the nation’s defenses against the potential torrential rain and sea-level rise associated with the warming atmosphere. The order updated a 40-year-old order crafted before climate was an unavoidable issue, and directed federal agencies to revise flood maps and evaluate flood-avoidance rules for taxpayer-funded projects. It would have meant, according to the Association of State Flood Plain Managers, “that projects funded with taxpayer dollars do not have to be rebuilt time and again as we deal with increased rainfall and storm events.” On August 15, in an executive order streamlining infrastructure priorities, Trump revoked the order. Trump has also revoked two other Obama executive orders related to climate — one that helped states and local governments coordinate better with the federal government, and Obama’s June 2013 Climate Action Plan.
Burdening the U.S. Coast Guard As Houston’s streets turned to rivers and families clung to their rooftops, the U.S. Coast Guard had 20 helicopters, 21 boats and six shallow-water rescue teams working nonstop to save stranded residents. By Tuesday, its forces had pulled more than 3,000 people from rising floodwaters. Trump has strained the service with trips to Mar-A-Lago, which require Coast Guard protection (just one helicopter reportedly costs $180,000 a day). Even still, his draft budget in March proposed a roughly 10 percent cut to the Coast Guard’s already meager $10 billion budget. After bipartisan protests, the funding was restored.
Staffing Problems If you’re looking for a job in the federal government, the National Hurricane Center is still looking for a director, according to the NOAA website. Trump has yet to pick a nominee to head up NOAA, and several positions remain open at FEMA. A Government Accountability Office audit of the National Weather Service, completed in May, found that unit managers there reported that the hiring backlog at the agency, which began during the 2013 government shutdown and subsequent hiring freeze, has contributed to “stress, fatigue and reduced morale” among employees.
Cuts to FEMA It has long been in the offing that the nation’s emergency management agency, established by President Carter in 1979, should shift more of its burden to state and local governments. The White House blueprint proposes doing that dramatically, eliminating $667 million in state and local grant funding.
Budget negotiations will continue until the money runs out at the end of September, at which point Trump has vowed to shut down the government unless Congress agrees to allocate $1.6 billion needed for a border wall. But perhaps it’s not such a good time to prevail upon the American taxpayer for such projects. Harvey’s assault on Southeast Texas — a predictable disaster according to a devastating report by ProPublica and the Texas Tribune late last year —will take years of recovery, rebuilding and examination of our national priorities. It has at least changed the conversation in the short term. Depending on its aftermath and the research that follows, it may have changed it for good.
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Erwin Chemerinsky and the Case Against Trump
The constitutional scholar discusses Donald Trump’s tumultuous first year, and what may lie ahead. “It’s very frightening to me,” Chemerinsky tells Capital & Main.
Since Donald Trump took office once year ago, perhaps no American has called into question the legal and ethical behavior of the president with more persistence and authority than Erwin Chemerinsky. One of the country’s preeminent constitutional scholars, and the dean of the University of California, Berkeley’s law school, Chemerinsky has sounded the alarm from day one of Trump’s administration – most strenuously over the president’s alleged daily violation of the emoluments clause of the Constitution. Those provisions bar the president from receiving any form of payment from a foreign government, and also from receiving any payments beyond the salary of the chief executive. Last month, a federal court dismissed a lawsuit that Chemerinsky and other leading legal authorities had helped prepare seeking to stop the president from accepting any further payments – that decision is currently being appealed.
Capital & Main sat down with Chemerinsky at his UC Berkeley office to discuss Trump’s tumultuous first year, and what may lie ahead.
Capital & Main How would you assess Trump’s first year in office?
Chemerinsky It’s so much worse than I could have ever feared. I don’t think that we’ve ever had a president who has less respect for the Constitution. It’s reflected in what he expresses with regard to freedom of the press, it’s reflected in the fact that on a daily basis he’s violating the emoluments clause of the Constitution by receiving benefits from foreign governments, benefits from the United States government beyond his salary. It’s reflected in his immigration policies, his travel ban, his efforts against sanctuary cities. It’s very frightening to me.
What does it say about the rule of law in this country that we have a sitting president who, in your view, has been in violation of the Constitution every single day that he’s been in office?
Chemerinsky Before taking office the president-elect said that he was going to take steps to try to comply with the emoluments clause. None of that ever happened. What’s troubling to me is Congress seems largely unconcerned about it and so far the courts haven’t stepped in.
Is there evidence that any of the president’s decisions have in fact been influenced by payments that his business interests have received?
Chemerinsky China gave to President Trump some very valuable licenses on trademarks. He’d been trying to get them from China for years before being elected as president. He received them and then he changed his policy with regard to China. Maybe it was a coincidence, but certainly one followed the other.
Some critics observed that the countries that were selected for the immigrant and refugee travel ban did not include any countries where President Trump’s business organization had properties and interests.
Chemerinsky It’s at least ironic that when you look at the seven countries initially listed in the travel ban, none had Trump interests there. Of course there was also no linkage between terrorists of any of those countries and yet the countries where you could link past terrorist acts to people from those nations, like Saudi Arabia or Indonesia, were not on the list, and those are places where Trump had investments. The travel ban has gone through two more iterations and that continues to be so — Trump doesn’t have any interests in North Korea or Chad, and they find themselves on the list, but the countries where Trump does have interests don’t find themselves on the list.
One other example that is just astounding: The Trump administration has allowed offshore drilling now in all states that have coastal areas except for one — Florida. Of course that’s where Trump has coastal property. Maybe it’s a coincidence, but doesn’t this show exactly the kind of self-dealing that the Constitution’s emoluments clauses were meant to prevent?
Is there a case to be made against President Trump on obstruction of justice?
Chemerinsky I think that there is significant evidence that President Trump engaged in obstruction of justice. He told the Russians that he fired James Comey for purposes of trying to end the investigation with regard to Russia.
If anybody tries to interfere with an ongoing federal investigation, that’s obstruction of justice. The crime that Richard Nixon would have been impeached for, if he didn’t resign, was telling the FBI not to investigate Watergate because it was a CIA matter. Well, that’s exactly what President Trump apparently tried to do — keep the FBI from investigating.
We also have more evidence that President Trump tried to interfere with the investigation of Russian interference in the election. All of this is the basis for strong concern with regards to obstruction of justice. My prediction is what we’ll see next is the implication of Donald Trump Jr. and Jared Kushner. The question is, will it reach to the president? Will it reach to the vice president?
Do you believe that there is a credible case to be made for invoking the 25th Amendment based on concerns about Trump’s mental health?
Chemerinsky I think that Donald Trump’s engaged in erratic behavior. I don’t think that he’s shown himself to be mentally ill or physically ill in a way that would justify the 25th Amendment to this point in time. There’s a thing called narcissistic personality disorder — maybe it’s that. But I don’t know if all politicians don’t fall into that to a greater or lesser extent.
Are there any other grounds for legal or constitutional concern about the president?
Chemerinsky My greatest concern for the next three years of the Trump presidency is whether there’s going to be a moment where a court issues an order and Trump says, “We’re going to ignore it.” When the courts first enjoined the initial version of the travel ban, there were rumblings from Trump that maybe the administration would just ignore the court order. My worry is once the president takes that position, if he does, then there’s nothing to stop him from locking up you or me or anybody else. Once the president says I’m going to ignore a court order then there’s nothing left of the rule of law.
Does Trump’s pardon of former Arizona Sheriff Joe Arpaio lay the groundwork for him to pardon anyone who’s indicted and convicted as a result of the Mueller investigation?
Chemerinsky The president is allowed to pardon anyone accused or convicted of a federal crime. I think the pardon of Joe Arpaio shows that President Trump has no shame, that he’s not hesitant to use it even in an instance where there was a violation of law. Joe Arpaio was ordered by a court to stop racial profiling. He ignores that court order and continues to engage in it. A judge finds him in criminal contempt, and before the judge even sentences, President Trump says, “I regard Joe Arpaio as a hero, I’m going to pardon him.” Will he do it with regard to the Mueller investigation? We don’t know.
How do you assess Neil Gorsuch’s performance on the Supreme Court?
Chemerinsky Since coming on to the court on April 6, 2017, Gorsuch has voted together with Clarence Thomas a hundred percent of the time. To put this in context, the last year Justice Scalia and Justice Thomas were on the court together, they voted together 87 percent of the time. Gorsuch so far has been at the farthest right part of the court. Maybe he’ll be different as months and years go by, but for the first nine months of his time on the court, no one has been more conservative.
Do you have concerns that the standards for what is legal and ethical behavior by a president have been damaged by this president in just one year?
Chemerinsky It’s impossible to know what the long term consequences of that are going to be. Is Trump going to lose to a mainstream Democrat or Republican in 2020 and we’ll regard this as a blip? Or is this the start of something much more apocalyptic?
The United States form of government isn’t going to be here forever. Every form of government is here until it’s not. I believe that the institutions of government can withstand the Trump presidency, but I know many are afraid that this is the start of something that is very different than we’ve ever seen before.
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Study: California Economy Unhurt by Progressive Policies
A new report shows that California, with its higher minimum wage, Medicaid expansion and ambitious climate policy, has done better than 19 Republican-led states with lower taxes and fewer regulations.
Reducing carbon emissions, raising low-wage workers’ incomes and increasing access to health insurance have not, as critics warned, led to job stagnation and lower GDP.
In a direct rebuke to anyone using the term “job-killing regulations,” a recent study shows that a group of progressive policies enacted since 2011 have had no negative impact on the California economy. If anything, the report, “California is Working: The Effects of California’s Public Policy on Jobs and the Economy since 2011,” shows that California has done better than several states that have lower taxes and fewer regulations.
The report’s author, University of California, Berkeley Labor Center researcher Ian Perry, examined 51 progressive policy measures – including environment, safety net, taxation, infrastructure and housing – that Perry coins the “California Policy Model,” or CPM. These policies include laws that provide a path to a higher minimum wage, expand Medicaid as part of the Affordable Care Act, raise taxes on corporations and promote California’s comprehensive and ambitious climate policy.
Perry chose 2011 as a starting point because that’s when Democrats captured majorities in the legislature as well as the governor’s office. Also that year, Proposition 25, which let Democrats approve a state budget with a simple majority vote rather than a two-thirds requirement, went into effect. That opened the floodgates to a wave of progressive policies that have been scorned by conservative politicians, pundits and think tanks.
Perry told Capital & Main that he set out to see whether critics of California’s progressive policies were correct — that, for example, California’s higher minimum wage would increase unemployment, or whether the state’s strict regulations on carbon would send businesses to other states in droves.
To do so, Perry compared wage growth and employment growth in California with statistics from 19 Republican-controlled states. But he also had to create a legitimate control group to weight factors like California’s tech boom, which might have skewed economic results, or a Republican-controlled state’s downturn, which may not have been due to conservative policies. To combat an apples-to-avocados comparison, Perry used a “synthetic control” method to weight data from Republican states to create an alternate California (or alt-California) in which CPM had not been enacted.
Perry found that California – the real California with its CPM – enjoyed higher total employment, private sector employment and GDP than the 19 Republican states and alt-California.
The study, by design, looked at the cumulative impact of policies instead of evaluating specific policies. “Still, one policy stood out to me,” Perry said. “My study found that the expansion of Medicaid through the ACA was one of the more pro-growth policies because it led to a greater demand in health care services and a growth in health industry jobs.”
The biggest takeaway from the study, Perry said, was that policies that make up the CPM – reducing carbon emissions, improving income for low-wage workers and helping more people access health insurance – have not, as critics warned, led to negative economic effects like job stagnation and lower GDP.
“There are warnings from conservatives that [progressive policies] will slow down economic growth, but California is a big piece of evidence that the fears are unwarranted,” Perry said.
Kansas, which went all in on supply side economics under Governor Sam Brownback, showed that the converse is true, that cutting taxes can sometimes kill growth, Perry said.
In a Washington Post op-ed, Jared Bernstein, chief economist to former Vice President Joe Biden, praised the study. He said that, while it didn’t convince him that there’s a direct line between progressive laws and job growth (a relationship Perry did not set out to prove), the study did, “in tandem with tons of other research, convince me that these progressive interventions do not hurt growth.”
The Berkeley study was released as Republicans on Capitol Hill pushed a tax bill heavily weighted to tax cuts for corporations and wealthy individuals, legislation that a majority of Americans are firmly against.
Despite the report’s generally rosy economic picture, Perry points out that some issues threaten California’s prosperity. First, progressive labor standards need to be enforced to combat rampant wage theft in California’s low-wage industries. Second, the effect of very high housing prices in much of the state could undermine some economic gains.
“High housing prices and lack of supply could force more people to live farther away from their jobs, which would increase carbon emissions and make it harder for [businesses] to attract workers,” he said.
And the possible repeal, or undermining of, the Affordable Care Act, could undo some of the economic benefits of the past seven years, Perry said. Another study from the UC Berkeley Labor Center earlier this year showed that California would have lost more than half a million jobs if the Graham-Cassidy repeal-and-replace legislation had passed.
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2017’s Greatest Hits (and Misses)
The political journey between good intentions and the statute book was twisted even by Sacramento standards in 2017. But there was more — much more.
Working Californians’ biggest hope during Trump Year One: Sacramento’s Democratic supermajorities:
With a Democrat as governor and a legislature controlled by true-blue supermajorities, it seemed only logical for Sacramento to spearhead the Trump resistance. State Senate President pro Tem Kevin de León (D-Los Angeles) and Assembly Speaker Anthony Rendon (D-Paramount) said as much the day after Donald Trump’s 2016 election, vowing to “set an example for other states to follow.” Twelve months later, a modest raft of new laws aimed at blunting the brazen bigotry of Trump immigration policies — including Senate Bill 54, de León’s hard-won sanctuary state bill — and checking the administration’s planet-killing orgy of climate deregulation.
Working Californians’ biggest disillusionment during Trump year one: Sacramento’s Democratic supermajorities:
The political journey between good intentions and the statute book was twisted even by Sacramento standards in 2017. Of the 2,980 bills introduced by state lawmakers, roughly 35 were drafted as “Trump resistance” measures. But by the time the dozen-plus resistance bills made it to the governor’s desk, they tended to be anodyne wisps of their original forms. Senate Bill 6, San Diego Democrat Ben Hueso’s effort to create a legal defense fund for undocumented workers scooped up in ICE raids, became so toothless that Hueso retitled his “Due Process for All Act” as the “Expanding Due Process Act.” A no-brainer by state senators Mike McGuire (D-Healdsburg) and Scott Wiener (D-San Francisco) designed to force Trump to release his tax returns before getting on the state’s 2020 ballot earned a Brown veto. Most controversially, perhaps, Rendon tabled SB 520, a sweeping Medicare for All-styled measure by state senators Ricardo Lara (D-Bell Gardens) and Toni Atkins (D-San Diego), before it even received a hearing.
2017’s wannest excuse for a sanctuary state act:
It once virtually banned all state and local law enforcement cooperation with ICE agents. But the bill signed into law by Jerry Brown, which had promised to be the sharpest state rebuke yet to Trump’s mass deportations, now looked strangely familiar. That’s because to get the governor’s signature, the California Values Act had to first pass muster with the powerful California Sheriffs’ Association. The compromise gives ICE full access to prisons and jails, allows police and sheriffs to share databases and to detain and transfer people to ICE if they have been convicted of any crime from a risibly broad list of 800 “hold offenses” recycled from 2014’s California Trust Act. Those include the very serious offenses of “intentionally processing a milk product that is required to be pasteurized without pasteurization, manufacturing a milk product in an unlicensed plant, providing milk product for manufacture or resale to an unlicensed person, or falsifying records required.”
2017’s most unsurprising (if most ignored) Rx for national and California Dems:
Just over 46 percent of California’s registered Democrats turned out for Bernie Sanders in the 2016 presidential primary. That’s nearly the same percentage that pre-election polling for the November vote indicated was motivated by anti-Hillary feelings — presumably disgust over four more years of the romance between Clinton-Obama “New Democrats” and Wall Street — rather than anything remotely pro-Trump. Unfortunately, that lesson was lost on state Democrats when they gathered in May and selected Los Angeles County Democratic chair Eric Bauman as state party leader — in spite of Bauman’s financial ties to Big Pharma. Progressive challenger Kimberly Ellis, who narrowly lost a vote plagued by irregularities, charged that a “clear conflict“ had developed among “those nestled in power.” That diagnosis was echoed in postmortems that urged the disentangling of Democrats — “ideologically and financially — from Wall Street, the military-industrial complex and other corporate interests that put profits ahead of public needs.”
California’s most badly bungled headline of 2017:
The news in November was all about the great Silicon Valley sigh of relief that blew down from Palo Alto like a laissez faire Santa Ana wind: California’s Department of Motor Vehicles had issued its long-delayed driverless vehicle testing regulations that would allow autonomous vehicles on California highways. A potential global market of at least $42 billion by 2025, panted the L.A. Times business pages. But for 3.1 million U.S. truckers (who represent represent two percent of total employment), there was little to cheer. In May, Goldman Sachs became the latest to predict that autonomous vehicle technology will disrupt trucking jobs — one of the last middle-class occupations that doesn’t require a high school diploma — into obsolescence at a rate of 25,000 a month, or 300,000 a year. A far more apropos headline would have been, “Just Say No.”
2017’s poster child for neoliberalism: Elon Musk. Again.
Everything that’s wrong with Silicon Valley’s virulently anti-communitarian, anti-regulatory ethos seems to eventually get uttered by California’s favorite South African-born billionaire bad boy, Elon Musk. And in 2017, Musk did not disappoint. In February, the entrepreneur announced the creation of a new tunnel boring company and its first for-profit venture — digging an express tunnel that will bypass L.A.’s legendarily impenetrable rush hour traffic by connecting Musk’s Bel-Air home with his Space X headquarters in Hawthorne. Those lucky enough to be Elon Musk could see their morning hour commute cut to six minutes. Lest there be any confusion about who the free market best serves, this month Musk tweeted his Marie Antoinette-esque distaste for public transit and its twin aims of affordability and accessibility.
How a Reporter Got a Corker of a Scoop About the GOP’s Tax Bill
At first David Sirota thought there was no hidden story behind the Republican tax bill. Then a tax lawyer called — it turned out there was plenty to reveal, thanks to the last-minute addition of a special loophole.
Senator Corker’s defense was, “I didn’t know about the provision because I didn’t read the bill that I’m voting for.”
As the House and Senate moved toward approving the final version of the GOP tax bill, the International Business Times (IBT) revealed in an explosive story Friday that a loophole slipped into the bill in the final minutes will directly enrich President Donald Trump and his son-in-law Jared Kushner, as well as wealthy senators and key members of Congress, including the provision’s writers.
Controversy swirled around the timing of the measure and the fact that deficit hawk Senator Bob Corker of Tennessee abruptly switched his vote in favor of the bill, whose tax cuts the Congressional Budget Office estimated will add $1.4 trillion to the deficit by 2027. Corker had been the lone Republican holdout in the Senate and had previously voted with Democrats against the bill. He has millions of dollars invested in real estate-related limited liability companies (LLCs) that could see a $1.1 million payday from the loophole. David Sirota’s IBT reporting quickly went viral as Corker’s apparent cushy accommodation was splashed across social media under the hashtag #CorkerKickback.
Capital & Main spoke to Sirota for a blow-by-blow account of the developing story, its implications and its consequences.
IBT had been closely following the debate over how the tax measure would treat income passed through a tax shelter known as an LLC, a “pass-through” tax entity because profits pass through to its owners who report them on their personal tax returns. The Senate version had limited tax cuts to pass through LLCs that actually employ people — the “job creators.” The House version has been far broader.
“We took a look at the key tax writers on committees that oversaw the bill as well as leadership,” Sirota said. “And we got a list of their real estate-related LLCs, and a day before the final bill came out, we put together this story about who could benefit. We found that between the conference committee, the Ways and Means Committee, the Finance Committee and the two leaders of the House and Senate, there were 13 members of Congress who owned and were earning income from real estate or from real estate-related LLCs. And depending on whether the final tax bill adopts the House version or the Senate version, they would stand to make a lot of money.”
IBT reported that the members of Congress — including House Speaker Paul Ryan — have between $36 million and $163 million invested in real estate-related LLCs. Between $2.6 million and $16 million in “pass through” income from those investments would benefit from the new provision.
Which version of the pass through would end up in the final tax bill would be determined by the joint House and Senate conference committee. At 5:30 p.m. on Friday, the committee released a final version that appeared to follow the Senate approach, the more rational version, according to tax experts Sirota spoke to.
“At 5:45 we were sort of like, ‘Okay, I don’t think there’s much to really write,’” Sirota said. “‘It looks like they kind of got it out.’ But I said, ‘I’ll talk to a couple of tax lawyers who have been following this.’ And what do you know? One of them comes back to me at 6:15 and is like, ‘You know, they added this one extra line that’s not in either of the bills. It talks about depreciable assets. This is the loophole.’ He said something along the lines of, ‘It’s narrow enough that it shows intent for a specific kind of investment vehicle.’”
Senator “John Cornyn on his Twitter feed is promoting a lobbyist’s talking points to defend this bill.”
The original House tax cut on pass-throughs, Sirota explained, was broad enough to argue that it was merely an ideological, across-the-board tax cut rather than something that picked specific winners and losers. But the additional line was included with one intent in mind. That line carved out a particular tax windfall for owners of rental-income generators like apartment buildings or commercial office complexes, depreciable property with few or no employees.
“That’s when we realized this is an absolutely enormous story,” Sirota said.
The real estate-specific windfall immediately raised the question of whether the LLC pass-through had been part of a deal aimed at influencing Corker to switch. When asked to comment on the pass-through for a followup story, Corker didn’t seem to be familiar with it, Sirota said.
“He called it ‘ridiculous,’” Sirota said. “But then he called back — he must have talked to somebody — and he said, ‘You know, I’m not sure I want to criticize it that way. You know, I need more information. I haven’t really read it. I’ve only read a summary of the bill. I haven’t read the bill.’ Which is, of course, another story: You’re the key vote on a $1.5 trillion [deficit] bill, and you’re announcing your support for it, admitting that you didn’t even read it. So your defense is, ‘I didn’t know about the provision because I didn’t read the bill that I’m voting for.’ That became another sort of huge story about how [Republicans] are rushing the bill through without even the pivotal vote having read it.”
What followed Sirota’s story was a firestorm of public outrage on social media. Under mounting pressure, Corker wrote a letter to Utah Republican Orin Hatch, the head of the Senate’s tax-writing committee, supporting the narrative that he didn’t know anything about the pass-through by asking for clarification of the provision, where it came from and how it got in the bill. To take the heat off Corker, Hatch replied on Monday, insisting that he had authored the loophole. Hatch added that Corker and his staff never contacted the tax-writing committee about the bill, in effect publicly admitting that a key swing vote on the tax bill wasn’t even communicating with the staff or the members of the panel writing it.
However, the Hatch alibi could not withstand new reporting that revealed Corker’s chief of staff, Todd Womack, had been investing heavily in a real estate LLC in the run-up to the bill and also stood to profit from the provision. Worse, Texas Republican Senator John Cornyn, in a Sunday appearance on ABC’s This Week, admitted that the decision to include the pass-through came from an effort to “cobble together the votes we need to get this bill passed.” With Cornyn suddenly under attack himself, his office aggressively tried to backpedal.
“They were upset that anybody viewed it that way,” Sirota noted, “but you can read the transcript. It was very clear that’s exactly what he said. It’s incredible: Cornyn is now defending the provision on his Twitter feed — I swear to god, you cannot make this up — by sending out an article written by a bank lobbyist who is lobbying on this provision. So John Cornyn on his Twitter feed is promoting a lobbyist’s talking points to defend this bill.”
But Sirota noted that the neither self-enrichment nor massive, deficit-hiking tax giveaways to corporations and the richest Americans are new. Republicans have been redistributing the country’s wealth upwards since the days of Ronald Reagan. What actually is precedent-setting about this tax bill, he said, is how explicit it is.
“There’s no pretense in this bill,” Sirota said. “There was a thing the Republicans put out in their summary when the bill came out. I tweeted out the graphic. It was sort of in a section about trying to prevent people from using their LLCs to put their wage income into their LLCs. They called it ‘safeguards’ — and I’m paraphrasing here — ‘We have put safeguards in to make sure that the business income taxes not go to wage earners.’ They are very crystal-clear that this is a tax bill not for workers. This is a tax bill for corporations and business owners. That is the ideology. They’re actually open about that. They want the public to know.”
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State Senator Predicts “Sledgehammer Time” If GOP Tax Bill Passes
Holly Mitchell, a leading legislative advocate for children and low-income Californians, says the state may return to the days of budget cutting if the current Congressional Republican tax plan becomes law.
State Senator Holly Mitchell (All photos by Joanne Kim)
Holly Mitchell, the state Senator who represents Los Angeles’ heavily blue-collar 30th District, has been called by one colleague the “social conscience of the entire Senate.” A personable policy wonk whose career included a stint as chief executive of Crystal Stairs, a child development nonprofit, Mitchell chairs the Senate Budget Committee — the first African-American woman to do so. She recently sat down in Pico-Fairfax with Capital & Main at the Paper and Plastik Cafe to talk about the possible effects of the Republican tax bill on California’s poor.
Capital & Main: Taking the temperature between now and New Year’s, what’s your prognosis for the House and Senate tax bills?
Senator Mitchell: The GOP tax plan is a redistribution of wealth from the poor to the rich or semi-rich. It gambles away the health care of poor people and this is unacceptable.
I’m so disappointed with the work of the [U.S.] Senate Budget Committee. I can’t imagine being a legislator, getting a report from the Congressional Budget Office that says the things it says about these bills — and voting to pass it. Did they ignore it? Did they not care?
One Senator, when interviewed, expressed concern about the bill’s potential to make the deficit skyrocket. When asked if that was enough to make him not vote for it he said, “I’m not sure. I’m still working on it.”
Senator Mitchell: The whole point of having the support of fiscal analysts and the Congressional Budget Office, with their independent status, is to provide you with critical data to help you make a decision. How can you say, “Oh yeah, that’s bad, but I’m not sure if I’m going to go forward on this or not”? Politics is continuing to trump — lowercase T—what’s best.
Is Sacramento concerned?
Senator Mitchell: Am I concerned? Yes! But I think what I’m more concerned about now is the Healthy Families Program.
This is the entitlement for California families who aren’t poor enough for Medi-Cal — but don’t earn enough to have private insurance.
Senator Mitchell: It provides care for about two million kids [and] requires federal reauthorization. And [Congress] has not reauthorized it. That could have immediate impacts on California’s budget. It’s a separate process [from the federal tax bills] but they have already missed the deadline.
It’s also been said that the tax proposals could undermine affordable housing construction in California because they would affect the credits and tax breaks that developers receive.
Senator Mitchell: Yes, which are critical for developments to pencil out. Given how far behind we are in terms of our housing-unit need, it would be devastating. L.A. County has done amazing things — voters have said yes to Prop M, yes to Prop HHH. All of that could be compromised — this delicate balance where developers can come in, get these credits to build affordable units. We’re already behind the eight ball in terms of our need. This would be yet another blow.
Defenders of the tax bill say everybody will get their taxes cut initially. Then by 2027, according to the Congressional Budget Office, middle- and low-income people will experience a net loss.
Senator Mitchell: They claim that they’re protecting “the middle class” — folks who make $100,000 and over. But that’s not how we define the middle class in California—here the salary threshold is much lower. What they claim is good news, I think, masks the bad news. And they’re rushing it through the process.
What steps are needed to analyze and create a response for a new federal tax plan’s effect on California?
Senator Mitchell: It will be a process. Unlike [the U.S. Senate], I will rely on our Department of Finance, the Legislative Analyst’s Office, the Senate Budget Committee staff to have discussions, to have a full budget hearing.
What’s your sense of the tax proposals’ potential effect on the state’s economic health?
Senator Mitchell: How we earn income as a state government could be severely impacted. We are socking money away into rainy-day funds to try to prepare for the time at which our recovery will slow down — [but] we couldn’t save enough to prepare for these [federal] proposals and the kind of hole they could blow in the state’s general fund.
What’s your plan if California does take a financial hit?
Senator Mitchell: As budget chair, I would be forced, as painful as that would be, to go back to the days of cutting. We may not be able to use a scalpel. It may be sledgehammer time — it would be devastating. In terms of the trend we’ve experienced with investments in K through 12, early education, the investments we have made in the last couple of years in the University of California and Cal State University systems — all these investments that we’ve made to expand access to services, would be impacted.
We fund Opti-Cal and Dental-Cal [for eye and dental care] — those are the kinds of core, basic human services that we could potentially have to roll back again. Medi-Cal funding helps undergird and support our overall health-care delivery system. If that went away, everything would be compromised.
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How the GOP Tax Bill Would Hurt Californians
The current House tax bill bestows Californians with incomes in the top one percent more than half of its cuts by 2027. It passed 227-205, on a mostly party line vote.
Changing the mortgage-interest deduction is not the only land mine in the House bill that would directly impact Californians.
No crowds of outraged demonstrators descended on Capitol Hill chanting, “Cut Corporate Taxes! Cut Corporate Taxes!” And scathing nonpartisan analyses uniformly showed that the biggest cuts in the GOP tax plan go to the wealthy and to corporations, while many middle- and lower-income families will face increases.
Nonetheless, the U.S. House version, giving Californians with incomes in the top one percent more than 50 percent of the cuts by 2027, passed 227-205, on a mostly party line vote with 13 Republicans opposing it.
The Senate’s version of the tax cuts is wending its way through that chamber, and the House bill will no doubt be changed substantially when a conference committee meets to reconcile the two versions if and when the Senate bill passes.
As matters now stand, the House version is the only one before the public, and it contains a bit of possibly welcome news for some taxpayers. It doubles the standard deduction from $6,350 to $12,000 for individuals and from $12,700 to $24,000 for married couples. The theory behind that change is that more taxpayers would likely take the standard deduction if it is higher than itemized deductions like mortgage interest. But mortgage interest is a deduction many Californians have come to depend on. And changing it is not the only land mine in the House bill that would directly impact Californians.
“Students would be taxed on income they literally don’t have. They will be even deeper in debt, or won’t be able to go to school.”
U.S. taxpayers can now deduct interest paid on mortgage loans up to $1 million for one or more homes. The House bill and the Senate’s current version slashes the cap to $500,000, and eliminates the deduction for second homes. That provision would disproportionately hit residents of states with high real estate values, like California, where finding a home under $500,000 in most urban markets is very difficult.
National Mortgage News estimates that five of the top 12 real estate markets that would be hardest hit by slashing the mortgage-interest deduction are in California.
The House bill also caps property tax deductions at $10,000 while the Senate is considering eliminating the deduction altogether.
Real estate organizations like the National Association of Home Builders have come out strongly against slashing the mortgage interest deduction, saying it would diminish incentives for buying a home.
The lowest income Americans now have some help with affording housing through a federal low income housing tax credit funded by tax-exempt private activity bonds issued by state or local governments. Those bonds are loaned to private companies to finance projects like affordable multifamily housing and for infrastructure projects, like roads and bridges.
If the final tax overhaul keeps the House’s removal of that exemption, money from investors, mostly banks, will dry up, according to Diane Yentel, president and CEO of the National Low Income Housing Coalition.
Only three of 14 members of California’s Republican delegation voted against
the House’s tax overhaul.
However, Yentel said she doesn’t have an issue with cutting the mortgage interest deduction but with how the savings will be used. “The problem is the House bill would use the savings from slashing the [deduction], which would be $95 billion over 10 years, not to support low-income renters, but to give tax cuts to the wealthiest Americans.”
Housing inequality is a huge problem in California, she said. “For every 100 extremely low-income renters that need housing in California, only 21 units are available. In Los Angeles, it’s 16 for every 100.”
Yentel’s organization has proposed federal renters tax credits and more funding for the National Housing Trust Fund.
Jonathan Kaplan, a senior analyst at the California Budget and Policy Center, agreed with Yentel that the mortgage-interest deduction needs reform and that any reform should generate funds to lessen housing inequality in California.
“Not only are the benefits of cutting the [deduction] going to corporations and the very wealthy, it would raise taxes on many homebuyers, and create disincentives for moving in an already difficult market,” Kaplan said. “That in itself will also exacerbate California’s housing affordability crisis.”
In a cost-sharing arrangement between the state and federal governments, individuals can now deduct state and local property taxes, and either state and local income taxes or sales taxes. The House GOP tax overhaul eliminates state and local tax deductions for all Americans.
More than five million California households claim state and local tax deductions on their federal returns, according to the California Budget and Policy Center. Someone with a gross income of $60,000 who owes $5,000 in California tax, now would pay federal taxes only on $55,000. Under the GOP plan, that individual would pay federal taxes on the entire $60,000, essentially being double taxed.
The House GOP tax bill eliminates the $7,500 federal tax credit for people who buy a hybrid or battery electric vehicle.
The center estimates that eliminating state and local tax deductions would not only raise taxes on millions of Californians, but would put a burden on local governments to fund services like schools and public safety.
“State and local governments will no longer be able to say, ‘We need to raise taxes in order to pay for schools, but don’t worry because you can take a portion of that off your federal taxes,’” Kaplan said.
The House bill affects higher education in three ways. It eliminates the student loan deduction that reduces taxable interest on loans for up to $2,500. It also eliminates a $2,000 lifetime learning credit.
Possibly the biggest hit to students is that tuition waivers would be considered taxable income. This would affect many graduate students who receive reduced or free tuition in addition to a small stipend.
“These are significant tax increases on students,” said Kaplan. “These students would be taxed on income they literally don’t have. They will be even deeper in debt, or won’t be able to go to school.”
Just over a million Californians file tax returns with a student loan interest deduction, amounting to $1 billion, Kaplan said.
The House GOP tax bill also eliminates the $7,500 federal tax credit for people who buy a hybrid or battery electric vehicle. A recent study by the non-profit environmental organization Next 10 showed that five percent of new car sales in California are electric, and a survey by CleanTechnica showed that California accounted for nearly half of all electric vehicles sold in the U.S. between 2011 and 2016.
Given the hits to Californians in the House tax overhaul, it might be surprising that only three of 14 members of California’s Republican delegation — Darrell Issa of Vista, Tom McClintock of Elk Grove and Dana Rohrabacher of Costa Mesa —voted against it.
Upon passage of the House bill Minority Leader Nancy Pelosi (D-CA) sent a message to California Republicans:
“After their deafening silence, any California Republican who votes for the GOP tax scam will be forced to answer why they care so little for their constituents.”
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Study Shows Limits of Cap-And-Trade in California
California succeeded in lowering greenhouse gas emissions last year. But a new study finds the state’s ambitious cap-and-trade program may have had nothing to do with it.
On November 11, shortly after he began his speech at the United Nations Climate Change Conference in Bonn, Germany, California Governor Jerry Brown encountered jeers and chants from Native American and climate justice activists who denounced fracking and the state’s market-based solutions to greenhouse gas emissions by yelling, “Keep it in the ground.”
A visibly rattled Brown snapped at the protesters, saying “Let’s put you in the ground so we can get on with the show here,” before he softened and thanked them for “bringing the diversity of dissent.”
Brown has been hailed as a climate hero for signing the ambitious California Senate Bill 32, which mandates the statewide reduction of greenhouse gas emissions, as well as his public opposition to the regressive climate policies of the Trump administration. But he’s also drawn scorn for his lack of opposition to fracking, his refusal to close the Aliso Canyon gas storage facility, and for his ardent support of cap-and-trade, which some environmentalists say shouldn’t be the lynchpin of progressive climate policy.
In an email, Jean Su, associate conservation director at the Center for Biological Diversity, one of the groups organizing the Bonn protest, countered Brown’s assertion that cutting oil demand is more urgent than cutting oil supply. “California can’t be a model of climate leadership while oil companies continue to produce millions of barrels per year of some of the dirtiest crude on the planet,” Su said.
Coinciding with the Bonn protest comes a new study examining cap-and-trade, Brown’s signature greenhouse gas trading program. In a report released the day before the Bonn speech, the nonprofit think tank Near Zero found cap-and-trade, a key strategy for achieving reductions in greenhouse gas emissions under Assembly Bill 32, the California Global Warming Solutions Act, has fallen short of its promise.
Cap-and-trade is a market-based program that allows companies to buy and sell credits to emit a certain amount of pollution, based on a state-imposed cap on emissions across an industry. The theory is, companies would want to save money by cutting down on greenhouse gas emissions. Brown has said the program will reduce climate-changing gases by requiring covered facilities to factor the cost of carbon into their business operations. The Near Zero study found that California greenhouse emissions have been cut – by five percent in 2016 alone – but through changes in the mix of sources generating electricity, including hydropower and solar, rather than cap-and-trade.
The study’s lead author Danny Cullenward said research found that the current limits on pollution set by cap-and-trade are far above actual emissions. The result is an oversupply of allowances that keep the price of carbon cheap and, critics contend, give companies little incentive to slash emissions. That build up of unused allowances enables companies “to maintain their emissions farther into the future than post-2020 program caps might nominally suggest,” he wrote in the report’s summary.
Cullenward told Capital & Main cap-and-trade needs to be tweaked in order to meet California’s goal of reducing emissions by 40 percent below 1990 levels by the year 2030. “Emissions have fallen pretty quickly and that’s good news. But a lot of people are saying, ‘See, the cap and trade program is working,’ and our analysis shows that it’s too soon to say that.”
Cullenward added that the promise of cap-and-trade is real, but that there is “more work to do” to make it effective. “The state is pursuing an ambitious 2030 climate target, and regulators expect cap-and-trade to play the single biggest role in reducing emissions.”
Earlier this year, California extended cap-and-trade through 2030.
In an email, Stanley Young, a spokesman for the California Air Resources Board (CARB), disputed Near Zero’s findings that the state’s cap-and-trade program is not driving observed reductions.
Young cited the Los Angeles Dept. of Water and Power as an example that cap-and-trade can directly lower carbon emissions. “From 2013 to 2016, overall CO2 emissions from LADWP’s portfolio of generating resources decreased 26 percent (3.6 million metric tons) due to the increase in renewable energy and use of the carbon cost adder. This represents a 42 percent reduction from 1990 levels, which exceeds Los Angeles’ 2030 goal,” Young explained.
Liza Tucker, a consumer advocate with Consumer Watchdog, said that cap-and-trade is a bust because the “approach is too lax.”
Tucker also criticized the law extending the program because it directs CARB to regulate refineries only through cap-and-trade and prevents local air quality boards from more aggressively regulating industry. “But [the law] bans CARB and other agencies from imposing new greenhouse gas emission reduction obligations.”
The Near Zero report is not the first study showing the limited impact of cap-and-trade. Last year, researchers from the University of Southern California and the University of California at Berkeley found that California’s cap and trade program had not cut greenhouse gasses. Preliminary evidence suggested that cap-and-trade had, in fact, led to an increase in greenhouse gas emissions in several industries.
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Years of Infamy: A New Documentary About the Japanese-American Internment
And Then They Came For Us is not the first film to tell the story of Executive Order 9066. Rarely, however, has any account of this shameful history been presented with such persuasively contemporary urgency.
On February 19, 1942, President Franklin D. Roosevelt signed Executive Order 9066, which authorized the War Department to declare much of the West Coast to be military exclusion zones, resulting in the arrest, removal and incarceration of 120,000 law-abiding residents — including roughly 70,000 birthright American citizens — for the offense of being of the wrong race during wartime. Civil rights vanished for Americans of Japanese descent who were forcibly uprooted and deprived of their property without due process.
Social justice filmmakers Abby Ginzberg and Ken Schneider’s powerful new documentary, And Then They Came For Us, is not the first to tell the story of one of modern America’s most ignominious mass violations of civil rights. Rarely, however, has any account of this shameful history been presented with such persuasively contemporary urgency.
From Ginzberg’s opening shots of protest at San Francisco Japantown’s February 19th Day of Remembrance march, to the film’s concluding call for solidarity between the survivors of 9066 and the Muslim immigrants who now find themselves targeted by yet another baldly racist executive action, it is always harrowingly apparent who is behind today’s clear and present danger to bedrock civil liberties.
In fact, as Ginzberg explained to Capital & Main, it wasn’t until the days following Donald Trump’s 2016 election victory that she became convinced she had a compelling enough hook on which to hang an otherwise oft-told tale. That’s when she saw Trump surrogate Carl Higbie appear on TV and cite the wartime internment as a precedent for candidate Trump’s calls for a “complete shutdown of Muslims entering the United States,” which included surveillance against mosques and establishing a database for all U.S. Muslims.
“I could suddenly see the politics of the film, I could understand its importance to today,” she recalled. “It didn’t become [a] dry history based on post-World War II analysis. It made me get very excited about it and decide that this film had to be done. We needed to find a way to get it out into the world as quickly as possible.”
Her idea was to approach the internment as if it were a breaking news story. By keeping it lean, forgoing lengthy fundraising or complicated locations, the film might get from script to screen while the headlines were still fresh enough to have an impact. That’s when the Jonathan Logan Family Foundation, which funds progressive investigative journalism, ponied up for the entire budget — a rare stroke of fortune in the social justice filmmaking world: “I was able to create a budget, give it to them and say, ‘I will do this film if you pay the bills.’ And they did. We started filming in October of 2016. And we finished it kind of mid- to end-of-April, 2017. For me that is record time.” (Disclosure: The foundation is a financial supporter of this website.)
The heart of And Then They Came for Us lies in the trauma and unreconciled anger of the incarcerated — including the articulate testimony of former camp children like actor-activist George Takei. The experiences of now-deceased adults survive in an extraordinary trove of documentary images taken by photographers hired as government propagandists by the War Relocation Authority (WRA). The photographers, among them Ansel Adams and the magnificent Dorothea Lange, were carefully monitored by minders lest they violate rules against taking photos of camp barbed wire, guard towers and heavily armed military police. The prisoners themselves were forbidden cameras of any kind, and it is ironic that the only images of the Japanese-Americans behind barbed wire are those taken by internee Toyo Miyatake, using smuggled equipment and film.
“We tapped into a reservoir of stories,” said Ginzberg, “and we were able to kind of cobble the film from everybody contributing something. But the two people who lead the film are George Takei and Satsuki Ina, who really have spent a lot of their lives working on this. … A third person, who’s not related at all to George, is Barbara Takei, who’s part of the Tule Lake Committee.” Local authorities, she added, “are now threatening to build an airfield sorta smack in the middle of the Tule Lake camp, which would mean that any notion of sacred space, or being able to [honor] it as a historical site, will go to hell.”
Eschewing the usual newsreel footage, Ginzberg sought — and was given — unrestricted access to recently unearthed and previously unpublished photographs, and research culled by photo historians Richard Cahan and Michael Williams for their 2016 coffee-table tome Un-American: The Incarceration of Japanese Americans During World War II. The book includes 170 images drawn from a 7,000-shot archive of the “evacuation.” Ginzberg mostly narrows that to the work of Adams and Lange. And it is the unwavering gaze of the Lange portraits — part of an almost legendary, 800-image cache that was immediately impounded and “lost” for 60 years by the U.S. Army — that drives home the human scale of the tragedy. Many of Lange’s photos were impounded for too truly reflecting the emotional reality of the camps.
“We try to let the photos in a certain way speak for themselves,” Ginzberg pointed out. “We’re letting people sort of read it in the faces of the Dorothea Lange [images], and something — “magical” is not the right word — but something deep happens in the experience of looking at those photos that are up there a little bit longer than they might be in some other setting. [Audiences are] able to read, as Takei says, the resilience and the stress. And so there’s something happening that becomes a first-person experience.”
In one of the most haunting scenes, internment historian and filmmaker Satsuki Ina, who was born in 1944 at the Tule Lake Segregation Camp near the Oregon border, a maximum security facility reserved for “troublemaker” activists, pensively encounters a Lange portrait of her mother, Shizuko, taken in 1942. Capturing an attractive, immaculately dressed young woman, the picture freezes a moment when her features are visibly drawn in worry as she waits with other first- and second-generation Japanese-Americans on a long sidewalk queue underneath government posters announcing their imminent removal.
Other speakers describe remarkably similar memories of the pain of witnessing their parents undergo the humiliation of gradually being shorn of their freedom and independence. Within a matter of weeks, the WRA froze bank accounts, limited movement and finally stripped internees of their automobiles and other property through forced sales. Los Angeles families were shipped to the Santa Anita racetrack and housed in horse stalls. Orwellian euphemisms ran through a government narrative that spoke soothingly of “evacuations” and “relocation centers,” rather than forced removals and concentration camps.
According to Ginzberg the film has been well received by audiences at the handful of film festivals it has entered since its May premiere. She’s been offering it for sale on the movie’s website for activist groups that have already hosted a number of screenings around the country, and it has played particularly well with teachers. Ginzberg’s strategy is to market the film as a classroom-friendly component (the runtime is 46 minutes) to lesson plans about the incarceration.
“Let’s see if we can’t educate people, organize people and have this film be as relevant as possible to what is going on, particularly with the Muslim travel ban, and then with other really repressive immigration policies.”
The November 27 Los Angeles premiere for And Then They Came for Us, at the Downtown Independent Theater, is sold out. Other screenings can be found at thentheycamedoc.com.
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Robert Reich on Trump’s ‘Dangerous Tax Bill’
“All of this rhetoric about a middle-class tax cut,” Robert Reich tells Capital & Main, “is just an absurd lie when you look at the numbers.”
In little more than six months the Republican-proposed tax bill has grown from a one-page White House press release promising financial relief for middle-class Americans to a colossal amoeba containing everything from massive corporate tax cuts to the repeal of Obamacare. Capital & Main’s Jessica Goodheart recently spoke to economist Robert Reich for part of an upcoming series on corporate responsibility. During Goodheart’s interview, Reich spoke about the current tax proposal that many experts see as a dire threat to the very households its sponsors are pledging to protect. Reich’s comments are excerpted below.
Jessica Goodheart: Do you think that reform-minded CEOs are taking any risks?
Robert Reich: If CEOs were really courageous . . . they would be speaking out right now against the shortsighted and dangerous tax bill that is coming through Congress, even though their own corporations might benefit. Over the long term, everyone will lose.
Some have suggested that the anti-free trade, nationalist movement that Donald Trump represents at home might place pressure on corporate leaders to address the widening wealth and income gap. Do you see that as a possibility?
Reich: Some leading corporations could decide to support specific public policies and reduce inequality, such as higher minimum wages, a bigger earned income tax credit, maybe even a universal basic income. They’re not going to do it individually, as companies, but they might come together and act politically, and lend their political clout to this kind of legislation.
What do you think the prospects for that are right now?
Reich: It’s hard to say. The Republican Party is split between its corporate and Wall Street wing, and its Steve Bannon/nationalist/Trump wing. For the time being, those two wings have come together around getting tax cuts for the corporate, Wall Street wing. What will the Bannon/nationalist/Trump wing want in return? Will they be satisfied with Trump’s tweets and nationalist tantrums? I don’t know.
What role are corporations playing in tax reform efforts, both visible and not visible, to the public?
Reich: Well, most of it’s invisible. Right now, there are lobbyists swarming over Capitol Hill, trying to get the largest tax breaks they possibly can for their companies and industries. You have large business groups like the Chamber of Commerce, Business Roundtable and others who are trying to keep the direction of the bill going in very large tax breaks for corporations, overall.
What the public sees and hears is just the talking points that Republican leaders have put out there in order to mollify the public, and to disguise what’s really going on. All of this rhetoric about a middle-class tax cut is just an absurd lie when you look at the numbers. I mean, the longer this goes on, the more likely it is that most Americans will discover the truth — which is why the Republican leadership wants to move quickly, and get this done before Christmas.
On Monday, Trump tweeted a request that the repeal of the Obamacare health insurance mandate be included in the tax reform proposal. How would that impact Americans, and how do you think it affects the prospect of the bill’s passage?
Reich: The removal of the health mandate would cause four million Americans to lose coverage in the first year, 13 million by 2027, according to the nonpartisan Congressional Budget Office. I don’t see how Senators Susan Collins, Lisa Murkowski and John McCain — who voted against repeal of the Affordable Care Act — could possibly vote for the tax bill with this poison pill inside it.
Yesterday, Trump economic adviser Gary Cohn received a tepid response after asking CEOs at a Wall Street Journal conference whether the tax reform bill would cause them to spend more on growth. Does that surprise you?
Reich: It doesn’t surprise me, because American corporations are flush with cash. If they wanted to invest more in growth, they could have done so already. They’re using their profits to buy back their shares of stock, and pad executive pay. That’s what they’ll do with even more profits that come their way because of the tax cut.
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California Bill Would Bring Climate Change Battle to State Construction Projects
A new bill awaiting Governor Jerry Brown’s signature could use the state’s massive purchasing power as the world’s sixth largest economy to address greenhouse gas emissions far beyond its borders.
With California doubling and tripling down on climate change as a reality in 2017, a new bill awaiting Governor Jerry Brown’s signature could use the state’s massive purchasing power as the world’s sixth largest economy to address greenhouse gas emissions far beyond its borders.
Assembly Bill 262, the Buy Clean Act, would require all state departments and the University of California and California State University systems to buy steel, rebar, flat glass and mineral wool board insulation for its infrastructure projects from low-carbon producers. Currently, the state usually buys at the lowest price, meaning that materials can come from companies in China and elsewhere, where the carbon footprint is almost certainly higher.
“We can’t forget our commitment to the environment in pursuit of the cheapest state infrastructure project,” said the bill’s lead author, Assembly Member Rob Bonta (D-Alameda). “We have to pursue getting the best value and protecting our environment at the same time. This is the next step in global climate change leadership in California.”
The bill would require the state to determine the average greenhouse gas (GHG) emissions per unit from the manufacture of those four infrastructure products. Bidders on state projects would then have to submit Environmental Product Declarations, or EPDs, proving they are at or below the average. EPDs are commonly available on many construction materials today.
The Buy Clean bill, co-authored by Assembly Member Marc Steinorth (R-Rancho Cucamonga), has bi-partisan support in both legislative houses and is backed by a massive blue-green coalition of labor, business, environment, and the building trades, many of whom see this as a boon for California. Businesses in the state are already required to meet the most stringent climate regulations in the nation and are thus well-poised to get these contracts. Still, not everyone is on board.
“Small business is going to be adversely affected,” said Tom Holsman, CEO of Associated General Contractors of California, an advocacy group for the building trades. He points out that contractors are required to hire a certain percentage of small businesses known as Disadvantaged Business Enterprises, or DBEs, owned by individuals from socially or economically disadvantaged communities, who may not be able to meet the requirements of the bill. This could hurt local businesses and put contractors out of compliance. “We had to oppose this bill in order to get that point across.”
California would be the first state in the U.S. to have such a policy, though the idea behind Buy Clean is already widely in practice in California and beyond. Buildings certified by LEED (Leadership in Energy and Environmental Design), a green building rating system, already require EPDs on materials. The California High Speed Rail Authority adopted a sustainability policy that similarly requires EPDs on steel and concrete. Oregon and Washington State have also recently started developing a statewide policy.
We can’t forget our commitment to the environment in pursuit of the cheapest state infrastructure project. We have to pursue getting the best value and protecting our environment at the same time.
Businesses already investing in clean tech, however, are seeing this policy as an opportunity to showcase their green credentials. Gerdau Steel, which runs the state’s only full-production steel plant, making steel reinforcing bar, or rebar, at its facility in Rancho Cucamonga, has already put $33 million into switching its power source to renewable energy, and helped craft the bill.
“We compete with neighbors in Arizona, Oregon, Washington, and then in Asia, that use less clean processes and haven’t made the investments we’ve made,” said Gerdau Rancho Cucamonga Vice President Mark Olson. “And then we get underbid by a nickel and we lose out. That was very frustrating to us. We believe it’s a way for California to really push climate goals to surrounding states.”
It is also a way to create and keep jobs in California. Purchases previously made out of state or overseas may shift to California, where not only environmental regulations but also labor standards are more stringent. Just about every major labor union, including the California Labor Federation, SEIU California, the Communications Workers of America and the United Steelworkers support the bill, as does the labor-environmental BlueGreen Alliance.
Kathryn Phillips, of Sierra Club California, points out that the Buy Clean Act is a first attempt to address a huge source of GHG emissions. An estimated 22 percent of all global emissions that contribute to climate change are embedded in the supply chain and are attributable to manufacturing.
Governor Brown had already demanded in an executive order that state agencies take climate change into account in their planning and investment decisions, and “employ full life-cycle cost accounting to evaluate and compare infrastructure investments and alternatives.” That order means agencies had to look at whether any infrastructure decisions would mean increased costs due to climate change remediation actions later. AB 262 is an attempt to codify that order and put it into action, with identifiable goals and standards.
“The Department of General Services and the Department of Finance are concerned that it could lead to millions in increased costs,” said Phillips. “There’s no reason that the price should have to go up. Unless what they’re admitting [is] that the state has routinely gone out and bought the cheapest and dirtiest products, and I say: shame on them! What hypocrisy!”
Buying cheap has occasionally led the state to environmental embarrassment. One outstanding example that stuck in the craw of lawmakers was the reconstruction of the San Francisco Bay Bridge which re-opened fully in 2013. The structural steel used to rebuild that bridge was purchased from a Chinese firm that did not meet California environmental or climate standards. It was just less expensive.
Mike Mielke, senior vice president at the Silicon Valley Leadership Group, noted that even if the bill did create some front-end cost for new infrastructure in the state, it would pay for itself. He drew a parallel to those LEED-certified buildings. “They last a lot longer, people are happier in them, they are healthier in them, and there’s been lots of research that point to the fact that that additional up-front cost is more than borne out over the life of the building,” he said. “So I think that is not so different here.”
It’s not rocket science. It’s just basically saying you have to buy from the cleaner half, instead of the dirtier half.
Materials covered by the bill leave a couple of glaring exceptions: cement and concrete. They were in the bill until it went into the Assembly’s Appropriations Committee where they were then stripped out. Bonta notes there was “significant opposition” from the cement and concrete industries, and also from Caltrans, who argued that compliance would significantly increase their concrete costs.
This cost increase is way overblown, said U.S. Concrete Vice President Jeff Davis. His firm was a major backer of the bill and is still supporting it. “For 12 years we have been focused on developing the most sustainable, lowest-carbon footprint concrete in our marketplace and for that matter, leading the entire industry in low-carbon concrete,” Davis said. “But I can tell you that here, in the SF Bay Area, our low-carbon concrete is selling competitively with standard concrete.
“We see the value of this bill and the value for our industry. It provides the incentive for the industry to continue to focus on innovation, and to continue to advance that goal of lowering our carbon footprint.”
Bonta sees the bill as a foundation to be built upon later. “Sometimes you start with a significant stake in the ground and get a program started, and then you can build on that program going forward and include more materials,” he said “The political pathway this year didn’t include concrete, but that’s not to say that it won’t be included in the future.”
It seems like a bill like this would be a slam-dunk with Governor Brown, but reading Brown can be very difficult. It’s already been a banner year for the state’s climate policy, with Brown successfully extending his hotly debated cap-and-trade program from 2020 to 2030. Cap and trade requires companies to buy permits allowing them a certain amount of greenhouse gas pollution. A monumental bill requiring 100 percent clean energy production in the state by 2045 was rolled over into the next legislative session. But legislators are pushing ahead.
“It’s not rocket science,” said the Sierra Club’s Phillips. “It’s just basically saying you have to buy from the cleaner half, instead of the dirtier half. And it’s notable that I think every California company will fall into the cleaner half.”
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