House passes GOP tax bill.
Mugabe resisting calls to resign.
U.S. to lift ban on importing elephant trophies.
Sen. Al Franken (D-MN) apologizes twice for groping a woman in 2006.
Keystone pipeline springs a leak in South Dakota.
They keep trying and trying…
On Tuesday, after weeks of agitation from President Trump and hard-right lawmakers, Senate GOP leadership signaled for the first time that it is amenable to inserting a repeal of the Affordable Care Act’s individual mandate into their tax overhaul bill.
“We’re optimistic that inserting the individual mandate repeal would be helpful, and that’s obviously the view of the Senate Finance Committee Republicans as well,” Senate Majority Leader Mitch McConnell (R-KY) told reporters, indicating that the policy could be inserted during the committee markup process as early as this week.
The office of Sen. John Thune (R-SD), a member of the Senate leadership team, confirmed to TPM that the final Senate tax bill would include the mandate’s repeal.
Yet rank-and-file lawmakers said a final decision has not yet been reached, and cited concerns that mixing health policy into an already controversial tax reform process would lose the votes Republicans need to pass the bill.
Adding to the confusion, minutes after McConnell’s declaration, the Republican chair of the Senate Finance Committee marking up the tax bill refused to acknowledge the news.
“No one needs to be talking about the individual mandate at this point,” Sen. Orrin Hatch (R-UT) said in the hearing, adding that he thought discussion of the policy was a “distraction” and “a waste of time.”
Which means that 13 million people would lose their subsidies for buying health insurance and no longer be able to afford it, but hey, if that means a few billionaires get a tax cut, it’s worth it, right?
On Aug. 3 of last year, just as the US presidential election was entering its final, heated phase, the Russian foreign ministry sent nearly $30,000 to its embassy in Washington. The wire transfer, which came from a Kremlin-backed Russian bank, landed in one of the embassy’s Citibank accounts and contained a remarkable memo line: “to finance election campaign of 2016.”
That wire transfer is one of more than 60 now being scrutinized by the FBI and other federal agencies investigating Russian involvement in the US election. The transactions, which moved through Citibank accounts and totaled more than $380,000, each came from the Russian foreign ministry and most contained a memo line referencing the financing of the 2016 election.
The money wound up at Russian embassies in almost 60 countries from Afghanistan to Nigeria between Aug. 3 and Sept. 20, 2016. It is not clear how the funds were used. At least one transaction that came into the US originated with VTB Bank, a financial institution that is majority-owned by the Kremlin.
Russia says that it was for the purpose of helping Russians living abroad vote in parliamentary elections in September 2016.
Yeah, right. Hey, looking for some really cheap property in Florida? I know a guy….
The Trolls of St. Petersburg — Masha Gessen in The New Yorker.
“Seen any of these before?” a headline blared on CNN’s Web site this week. “You may have been targeted by Russian ads on Facebook.” One half expected a toll-free number of a law firm to flash across the screen, or perhaps the name of a medicine to take post-exposure to Russian ads. Among other revelations of the past few days: Russian ads may have reached a third of Americans! And some of them were paid for with rubles! The very thought seemed to be enough to make Senator Al Franken cradle his head in distress on Tuesday, during congressional hearings in which representatives from Google, Facebook, and Twitter were questioned about Russian influence in the 2016 Presidential campaign.
In the past few weeks, we have learned a fair amount about the Russian online presence during the election. What matters, though, is not that Russian interference reached a third of Americans—that, in fact, is a significant exaggeration of the testimony by Facebook’s general counsel, Colin Stretch, who said that a hundred and twenty-six million people, not necessarily Americans, “may have been served” content associated with Russian accounts sometime between 2015 and 2017, with a majority of impressions landing after the election. He also mentioned that “this equals about four-thousandths of one per cent of content in News Feed, or approximately one out of twenty-three thousand pieces of content.” Nor is it significant that, as a “CNN exclusive” headline announced, “Russian-linked Facebook ads targeted Michigan and Wisconsin.” The story that followed actually said nothing of the sort. The real revelation is this: Russian online interference was a god-awful mess, a cacophony.
The Times published some of the ads that Facebook has traced to Russian accounts. Among them: a superhero figure with a green leg and a fuchsia leg, red trunks, and a head vaguely reminiscent of Bernie Sanders, all of which is apparently meant to read as pro-L.G.B.T.Q.; a Jesus figure arm-wrestling Satan, with a caption indicating that Satan is Hillary; an ad reminding us that “Black Panthers, group formed to protect black people from the KKK, was dismantled by us govt but the KKK exists today”; and an anti-immigrant ad featuring a sign that says “No invaders allowed!,” among others.
Several former staff members of a St. Petersburg company widely known as the Kremlin’s “troll factory” gave interviews to different Russian-language media outlets last month. One told TV Rain, an independent Web-based television channel, that hired trolls were obligated to watch “House of Cards,” presumably to gain an understanding of American politics. At the same time, trolls took English classes and classes on American politics. In the former, they learned the difference between the present-perfect and past-simple tenses (“I have done” versus “I did,” for example); in the latter they learned that if the subject concerned L.G.B.T. rights, then the troll should use religious rhetoric: “You should always write that sodomy is a sin, and that will bring you a couple of dozen ‘likes.’ ”
Another Russian outlet, RBC, published the most detailed investigative report yet on the “troll factory.” RBC found that the company had a budget of roughly $2.2 million and employed between eight hundred and nine hundred people, about ten per cent of whom worked on American politics. The trolls’ job was not so much to aid a particular Presidential candidate as to wreak havoc by posting on controversial subjects. Their success was measured by the number of times a post was shared, retweeted, or liked. RBC calculated that, at most, two dozen of the trolls’ posts scored audiences of a million or more; the vast majority had less than a thousand page views. On at least a couple of occasions, the trolls organized protests in the U.S. simply by strategically posting the dates and times on Facebook. In Charlotte, South Carolina, an entity calling itself BlackMattersUS scheduled a protest and reached out to an actual local activist who ended up organizing it—and a BlackMattersUS contact gave him a bank card to pay for sound equipment.
These reports don’t exactly support the assumption that the Russian effort was designed to get Donald Trump elected President. In fact, as The Hill reported on Tuesday, a Russian account announced plans for an anti-Trump march in New York City four days after the election—and thousands attended.
Why did Russian trolls, funded at least in part by the Kremlin, work to incite protests against Trump and an ersatz Black Lives Matter protest, and, at least in one offline case, work to pit American protesters against one another? “We were just having fun,” one of the troll-factory employees interviewed by RBC explained. They were also making money—not a lot, but more than most college students and recent graduates, who comprised most of the troll-factory staff, would have earned elsewhere. In exchange, they had to show that they could meddle effectively in American politics.
Russians have long been convinced that their own politics are infiltrated by Americans. During the mass protests of 2011 and 2012, Putin famously accused Hillary Clinton personally of inciting the unrest. At the time, I was involved in organizing the protests. In advance of a large protest in February, 2012, I helped a particularly generous donor, who had shown up out of the blue volunteering to provide snacks, to connect with the hot-tea coördinator. A few weeks later, state-controlled television aired a propaganda film that used footage of protesters eating donated cookies and drinking tea, which was intended to expose the U.S. State Department’s sponsorship of the Moscow protests; the voice-over claimed that America had lured protesters out with cookies. A few months later, we learned that the generous donor had been an undercover agent who had used Kremlin rubles to purchase the cookies. In the end, protesters got tea and cookies, and millions of Russians became convinced that the anti-Putin protests were an American conspiracy.
The cookie story is not a perfect analogy, but it is an antecedent of sorts to the narrative of Russian meddling in the American election, and it is instructive. Was the Moscow protest made any less real because a fake donor had brought cookies? Was the protest in New York in November of last year any less real, or any less opposed to Trump, because a Russia-linked account originally called for it? Is Trump any less President because Russians paid for some ads on Facebook? Is there any reason, at this point, to think that a tiny drop in the sea of Facebook ads changed any American votes? The answer to all of these questions is: no, not really.
The most interesting question is: What were the Russians doing? In the weeks leading up to the election, Putin made it clear that he expected Hillary Clinton to become President. There is every indication that Moscow was as surprised as New York when the vote results came in. Indeed, in Russia, where election results are always known ahead of time, the Trump victory might have been even more difficult to absorb. So what, then, was the point of Russian meddling—what was the vision behind the multicolored Bernie superhero and the “No invaders” ad?
All of us, including the trolls of St. Petersburg, want the world to make sense. Given the opportunity, we want to show that it works the way we think it does. Russians generally believe that politics are a cacophonous mess with foreign interference but a fixed outcome, so they invested in affirming that vision. In the aftermath, and following a perfectly symmetrical impulse, a great many Americans want to prove that the Russians elected Trump, and Americans did not.
Rainbows and Unicorns — Charles P. Pierce on the GOP tax plan.
With Sudden Sam Clovis suddenly cleared out, there was room for the House Republicans to uncrate their long-awaited tax plan and it was pretty much as disastrous as you thought it would be.
(And I should point out how stunned I am that the administration would not want a guy already under FBI investigation to go under oath in a completely separate proceeding in which would be examined his credentials to do a job for which he was completely unqualified. ‘Ees a puzzlement.)
One good way to understand what’s going on with this latest exercise in financial misdirection is to notice that this plan will tax the interest payment on one student’s loans, but that it may no longer tax another student’s multibillion-dollar inheritance. Of course, the estate tax will go away entirely in six years, probably when nobody’s watching. It also will cap the mortgage-interest deduction, probably in the interest of eliminating it entirely when nobody’s watching. So that’s what all that “middle-class” bafflegab is really all about.
Brownback’s catastrophic imbibing of straight supply-side Sterno crippled his state, and the Center for American Progress immediately pointed out the similarities between what Brownback did in his state and what the Republican plan proposes to do to the country. Otherwise, the Republican plan is pretty much the same thing as David Stockman long ago said the first Reagan budget was: a Trojan horse to cut taxes on corporations and the wealthiest among us. From The Washington Post:
The Tax Cuts and Jobs Act would lower the corporate tax rate from 35 percent to 20 percent and collapse the seven tax brackets paid by families and individuals down to four. It would create giant new benefits for the wealthy by cutting business taxes, eliminating the estate tax, and ending the alternative minimum tax.
The elimination of the deduction for state and local taxes seems to be based in an entirely new riff that’s become popular among congresscritters who are tired of seeing their laissez-faire hellholes called moochers because the hellholes take in more money from the federal government than they send back to it in taxes. Now, believe it or not, and you will believe it because these people will say anything, the argument is being made that the high-tax states are somehow luxuriating on the backs of Good Country People in places like Alabama and, yes, Kansas. In any event, this provision of the bill has put Republicans from places like New York and New Jersey in a considerable bind, so much so that insisting upon it may be enough to sink the bill entirely.
And, finally, of course, we have the most spavined old nag in this entire herd of unicorns.
The bill would add $1.5 trillion to the debt over 10 years, but Republicans believe the changes would trigger a surge in economic growth, higher wages, and job creation.
Clap as hard as you want, America. This is not going to happen because it never has happened in all the years that Republicans have been running this con on the country. It never has happened because it can’t happen. In the immortal words of Rocket J. Squirrel:
“But that trick never works.”
Time Was… Michael S. Rosenwald on the chaotic history of timekeeping in America.
One of the crazier facts about life in America is this: For roughly two decades, nobody had any clue what time it was.
In office buildings, it could be 4 p.m. on one floor and 5 p.m. on another — an important matter for several reasons, including who punched out first to get to happy hour. People would step off airplanes with no idea how to set their watches. Ponder this head-scratcher:
“A short trip from Steubenville, Ohio, to Moundsville, West Virginia became a symbol of the deteriorating situation. A bus ride down this thirty-five-mile stretch of highway took less than an hour. But along that route, the local time changed seven times.”
That “deteriorating situation,” as historian Michael Downing put it in his book “Spring Forward,” is the reason millions of Americans will set their clocks back this weekend for Daylight Saving. (And it is daylight saving, not savings. You’re welcome.) Those who forget are going to be very early for Sunday brunch.
Before 1966, when President Lyndon B. Johnson solved the craziness over America’s clocks two years after passing the Civil Rights Act, time was essentially anything governments or businesses wanted it to be. Though laws mandating daylight saving — to save fuel, to give shoppers extra time in the light — passed in 1918, by the end of World War II the system had become fractured and was ultimately dismantled.
These were nutty times, Downing writes, with some localities observing daylight saving, some not:
Left to their own devices, private enterprise and local governments — which had repeatedly demanded the right not to alter their clocks — took to changing the time as often as they changed their socks, setting off a nationwide frenzy of time tampering …
Especially in Iowa, which had 23 different Daylight Saving dates. “If you wanted to get out of Iowa, you had to time your departure carefully,” Downing writes. “Motorists driving west through the 5 p.m. rush hour in Council Bluffs, Iowa, found themselves tied up in the 5 p.m. rush hour in Omaha, Nebraska, an hour later.”
The historian also offers this truly astonishing fact: “By 1963, no federal agency of commission was even attempting to keep track of timekeeping practices in the United States.”
When the government did finally get involved, a committee was, of course, established.
It was called, “The Committee for Time Uniformity.”
Congressional hearings were held. Legislation was proposed. Editorials were written.
The measure “is a bid for the termination of chaos,” this newspaper opined. To those who would oppose such a sensible idea, the Post editorial page said, “It is better for them to adjust to the will of the majority than to tolerate the Babel of contradictory clocks.”
The Uniform Time Act of 1966 — designed “to promote the observance of a uniform system of time throughout the United States” — was signed into law by Johnson on April 13, 1966.
Six months later it became the law of the land, though one wonders: Did it go into effect at the very same time in New York and Chicago, which is one hour behind?
Actually, never mind.
Doonesbury — Rhyme time.
Here’s the details of the Republican tax package, but to cut to the chase, it’s basically a huge gift to rich people and corporations and a stinking turd to the middle class folks who have mortgages and pay state income taxes.
Families would also no longer be able to deduct their state income taxes from their federal taxable income, another change that would have a particular impact on places like New Jersey and New York, where state taxes are higher than in other areas. Taxpayers will be able to deduct their property taxes up to $10,000.
Americans would no longer be able to deduct their medical expenses or property and casualty losses, according to a document outlining the plan.
Okay, so all of you who voted for Trump because Her E-mails and you fell for the line about getting rich quick… Well, to quote that old chant after a bad call by the ref: “Nuts and bolts! Nuts and bolts! We got screwed!”
The chances of this bill passing are slim, but at least we know where the Republicans’ hearts lie in terms of the middle class and those without means to lobby: Screw you.
Via the New York Times:
Trump suggested on Wednesday evening that a soaring stock market might be “in a sense” reducing the national debt, a statement that is not true, in any sense.
“The country — we took it over and owed over $20 trillion,” Mr. Trump told the Fox News personality Sean Hannity, following similar remarks he made earlier on Wednesday in a speech he delivered on tax issues in Pennsylvania. “As you know the last eight years, they borrowed more than it did in the whole history of our country. So they borrowed more than $10 trillion, right? And yet, we picked up $5.2 trillion just in the stock market. Possibly picked up the whole thing in terms of the first nine months, in terms of value.”
“So you could say, in one sense, we’re really increasing values. And maybe in a sense we’re reducing debt.”
Yet another story about a “man of morals” making out like a Mafia don.
Former Alabama judge Roy Moore, a Republican candidate for U.S. Senate, once said publicly that he did not take a “regular salary” from the small charity he founded to promote Christian values because he did not want to be a financial burden.
But privately, Moore had arranged to receive a salary of $180,000 a year for part-time work at the Foundation for Moral Law, internal charity documents show. He collected more than $1 million as president from 2007 to 2012, compensation that far surpassed what the group disclosed in its public tax filings most of those years.
When the charity couldn’t afford the full amount, Moore in 2012 was given a promissory note for back pay eventually worth $540,000 or an equal stake of the charity’s most valuable asset, a historic building in Montgomery, Ala., mortgage records show. He holds that note even now, a charity official said.
The bad news is that this will not have any impact at all on his standing with the True Believers in Alabama.
Of course, if you’re so inclined, you could donate to Doug Jones, Moore’s opponent.
Sweet Home Alabama — Ryan Lizza on how Trump lost in Alabama but is still winning the GOP civil war.
To understand the political tsunami set off by the Alabama Senate primary on Tuesday, when Roy Moore, an anti-gay Christian fundamentalist who believes that Biblical law should supersede the Constitution, won the Republican nomination* for a Senate seat in a runoff election, consider the case of Senator Bob Corker.
Corker is a two-term Republican from Tennessee. He is up for reëlection next year, and has already raised six and a half million dollars. He’s only sixty-five years old, which is young in the geriatric U.S. Senate. He has one of the most coveted committee assignments in Congress: chairman of the Foreign Relations Committee, which, aside from making him one of the most influential voices on foreign policy, is also a perch that makes raising campaign funds enormously easy. Corker won his 2012 campaign by thirty-five points. Trump won the state last year by twenty-six points. In short, Corker is a senator at his professional peak.
And yet on Tuesday, the day that Moore defeated Luther Strange, the incumbent senator who was appointed to the job when Jeff Sessions left to become Attorney General, Corker announced that he was retiring. “When I ran for the Senate in 2006, I told people that I couldn’t imagine serving for more than two terms,” he said in a statement. “Understandably, as we have gained influence, that decision has become more difficult. But I have always been drawn to the citizen legislator model, and while I realize it is not for everyone, I believe with the kind of service I provide, it is the right one for me.”
Nobody really believed him. Corker, after Strange, seems to have been the second Senate casualty of this latest phase of the G.O.P. civil war. Even though there was no heavyweight Republican lined up to challenge him in a primary, Corker decided that the environment was too toxic. “That guy did not want to go through the house of pain,” a Republican who worked on the Moore race said. “He did not want to go through what Luther Strange went through.”
Expect a lot more Republican casualties, especially in the Senate.
While it’s dicey to read too much into one state’s special-election primary, there are a number of lessons from Alabama. The first is about Trump, who endorsed Strange even though his most solid supporters in the state rallied around Moore, a former chief justice of the state Supreme Court who was twice booted off the court for disobeying the law—once, in 2003, for refusing to remove a monument of the Ten Commandments, and again, in 2016, for directing the state’s judges to maintain a ban on same-sex marriage. The idea of having Roy Moore in the United States Senate was terrifying to Washington Republicans, and Mitch McConnell and others convinced Trump to back his opponents, first in an open primary and then in this week’s runoff.
Naturally, the race was billed as a test of Trump’s ability to persuade his own base. It didn’t work. The Republican consulting firm Firehouse Strategies, in a memo to clients, noted that there was no correlation between knowledge of Trump’s endorsement and support for Strange. In mid-May, sixty-four per cent of Alabama Republicans knew about Trump favoring Strange. By primary day, this week, eighty per cent knew about it. Over the same period, G.O.P. voter support for Strange didn’t budge. The firm’s takeaway for its Republican clients is that, “while Trump may be good at translating his supporters’ sentiments, he is unable to persuade them.”
Another memo, obtained by the Times, puts the lessons for the Republican Party over all in starker terms. Since 2010, the year that the Tea Party insurgency began rocking the G.O.P. establishment, the ability of incumbents in Washington to tame its right wing has ebbed and flowed. In 2010 and 2012, several subpar candidates making outlandish statements won Senate primaries, and probably cost the Republican Party control of the Senate. The Party regrouped and snuffed out similar unelectable challengers in 2014, when it won control of the Senate, and in 2016. But the post-2016 period has ushered in a new wave of insurrection.
“This year’s Alabama Senate special election shows that the 2014-16 playbook for winning Republican primaries needs to be recalibrated and improved” was the conclusion of the memo’s author, Steve Law, the head of the Senate Leadership Fund, which is essentially Mitch McConnell’s funding vehicle to protect his mainstream Republican Senate majority from being overtaken by the Trumpist right. Law argued that Republican voters were “still angry,” and that McConnell’s inability to get much done, especially the repeal of Obamacare, was “political poison” in the race.
Most interesting, the lesson for the G.O.P. establishment is that it has lost control of the Republican Party. Law writes that, in the minds of Republican voters, Obama, previously the face of the opposition, has been replaced by Paul Ryan and Mitch McConnell. “Opposition to Obama used to be a mainstay of Republican messaging,” he wrote. “In Alabama, Strange’s litigation against Obama’s executive actions would have been political gold a year ago. But with Obama out of the picture, our polling found the issue to be a middling vote-getter. Now the answer to what is wrong in Washington is the Republican Congress.”
Law, contrary to some others, sees Trump’s inability to translate his support to Strange as inconsequential, arguing that the Party’s base is now defined by its reverence for Trump. “No other person, group or issue has the gravitational pull on Republican primary voters that Donald Trump commands,” he notes, adding that “support for President Trump directly correlates with likelihood to vote.” Republicans, he says, are more likely to see themselves as Trump supporters than as Republican Party supporters. The single most fatal line of attack in a Republican primary, he suggests, is evidence that a candidate has been critical of Trump. It’s worth noting that, last month, Corker told local reporters in Tennessee, “The President has not yet been able to demonstrate the stability nor some of the competence that he needs to demonstrate in order to be successful”—remarks that Trump then attacked on Twitter.
Steve Bannon, Trump’s former political strategist, who backed Moore, is now plotting an expansive campaign to recruit challengers to Republican Senate incumbents, and is targeting some dozen races next year. Despite carrying the banner of nationalism and populism, Bannon is ideologically flexible. His first criterion for candidates is authenticity. (He obviously cared little about Moore’s anti-gay views.) But Bannon’s most important priority is the current G.O.P. leadership. When he was in the White House, Bannon believed that McConnell stymied Trump’s agenda and that, especially in the Senate, there was no constituency for the nationalist cause. So Bannon and his allies have made a decision about next year’s midterms: they will not back any candidate who agrees to support McConnell as Majority Leader.
The Next Challenge for Puerto Rico — Gillian B. White in The Atlantic.
The depth of the crisis in Puerto Rico following Hurricane Maria is apparent from the island’s obliterated roads, downed power lines, tainted water, and nonexistent cell service. Grief and dismay over the widespread destruction has led to calls for aid and assistance for the ravaged island, but long after the shock fades, the staggering task of rebuilding the island will remain.
That’s a challenge made markedly more difficult by the poverty of the island’s people and its government—it’s not clear where the necessary money will come from. The crisis makes clear the uncomfortable tension inherent in the island’s status as a commonwealth; Puerto Rican officials have no Congressional power when it comes to making decisions about their own survival during such a dangerous time, and the U.S. government has repeatedly declined to do anything that would change that. So, once the U.S. citizens who populate the island are given relief for their most immediate problems—as they very likely will be—the biggest worry is that the territory will be left to flounder, given enough money to restore basic necessities but not enough to set the island on course in the long run.
Managing the immediate humanitarian crisis is the first large recovery expense. In the aftermath of the storm, all of the island’s 3.4 million residents were left without power, communication on the island was severely hampered after the storm destroyed cell towers, and many were left without clean drinking water. Addressing those critical problems is made more difficult and more expensive by geography, says Steven Kyle, a professor at Cornell who studies economic development. One example, Kyle says, is that many of the workers who will help to repair and rebuild the electrical grid can’t just drive down to the disaster site with their equipment, the way they might be able to in Texas. Instead, they will need to be flown in, with some equipment shipped—which will bring up the cost of even the most basic repairs. “All those things could be dealt with if [the government] wanted to,” Kyle adds. “But I don’t think Puerto Rico’s at the top of their list in Washington.”The economic lift of managing Puerto Rico’s recovery is hard to overstate. For context, the cost of making repairs in the wake of Hurricane Harvey, which inflicted most of its damage on Texas and Louisiana, is estimated to be somewhere between $70 billion and $180 billion. IHS, a research and analytics firm, estimates the cost of rebuilding from Maria to be between $40 billion and $80 billion in Puerto Rico. But that’s a very early estimate, and damage to the island continues to unfold. And while Harvey’s damage might amount to more in dollars, the devastation of Hurricane Maria was concentrated in Puerto Rico, which had already sustained at least $1 billion worth of damage during Hurricane Irma. That means that Maria likely inflicted far more damage per capita. Puerto Rico Governor Ricardo Rosello has said that he’s asking the Treasury Department and the federal government for loans to help in the cleanup and rebuilding efforts. He emphasized that he expects “equal treatment” and “reasonable rates” when it comes to those loans. And whether or not those terms are met will be a critical factor in the island’s future.The federal government has taken measures to meet some of Puerto Rico’s most immediate financial necessities. The president has declared the island a “major disaster” area, which makes it eligible for much-needed FEMA funds. On Thursday, after appeals by politicians, the government moved to suspend the Jones Act—a requirement that goods shipped between U.S. ports are carried by U.S.-flagged and -staffed ships—which critics said was making relief slower and more costly (but proponents said helps keep American sailors safe). And then there’s the possibility of a disaster-relief bill, such as the one that followed Hurricane Harvey, though it’s not clear yet about how large that relief package might be.
Still, the Trump administration continues to draw criticism for its response to Hurricane Maria, which many have said has been slow and inadequate. The president has yet to visit Puerto Rico, though he recently planned a trip for next Tuesday. And his tweets about the success of relief efforts stand in contrast to photos and reports of devastation and desperation on the island, where many have been without power, water, and necessities for upwards of a week. More than that, many of the efforts made by the administration have come only after activists, politicians, and concerned families have spent days imploring the federal government to provide more help.
In the longer term, there are numerous difficulties when it comes to rebuilding an island that was already struggling economically before the storm. How the federal government and the creditors Puerto Rico was already indebted to choose to deal with that rebuilding effort will determine whether the island will have a good chance of improving its economy going forward.Even before Hurricane Maria destroyed much of the island’s critical infrastructure, Puerto Rico was facing $70 billion of municipal debt that it was unable to repay. And despite Congress’s passage of the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) in July of last year, the island’s economic future remained fragile and uncertain. As recently as this summer, the territory’s electric utility, Puerto Rico Electric Power Authority (PREPA), filed for bankruptcy to escape billions of dollars of debt it said it couldn’t repay. Now, months later, PREPA, the island’s only marginally functional utility, has essentially been destroyed, and is still deeply in debt.
While PROMESA helped to stave off Puerto Rico’s most immediate fiscal crises, it installed a board of mostly outsiders who get to determine the best course of action for the island. And the act does little in the way of making plans to fundamentally fix the commonwealth’s broken economy or to prevent the current economic crisis from repeating itself in the future.
Indeed, some of the most promising long-term solutions for how to fix critical infrastructure in Puerto Rico require a significant initial investment. Anamitra Pal, an engineering professor at Arizona State University who specializes in power and energy systems says that, though devastating, a destroyed power grid is an opportunity to rebuild a system that’s more dependable. Pal says that in rebuilding, Puerto Rico should look at the microgrid system used by Hawaii, which uses renewable sources and stores excess energy to be deployed when needed. Plus, such a system is cheaper in the long run. “Eventually, the return of investment is fairly quick—we’re talking about a period of the next 10 to 20 years,” Pal says. But that means that an initial investment would be required in order to install solar panels or establish wind farms. And without political or private-sector will, it’s unlikely that the island could pay for it.Investments like that are something Puerto Rico’s government can’t produce on its own, the federal government isn’t offering, and private creditors would want a return on. This leaves an opening for the island’s existing creditors—collectively owed some $70 billion—to try to cut deals of their own. The opportunity they see is to loan them cash now—adding to Puerto Rico’s debt—in the hopes that doing so will improve their chances of seeing their original investments, from well before the storm, get repaid. On Thursday, for instance, Puerto Rico’s Fiscal Agency and Financial Advisory Authority received an offer from the creditors of PREPA for a $1 billion loan and a discount on a very small portion of the utility’s existing debt—from $8.1 billion to $7.95 billion. While PREPA unquestionably needs cash now, this type of small-scale relief, coupled with the addition of more debt, will not increase the likelihood that the utility unwinds its debts any sooner—something the fiscal authority was well aware of. In a statement about the rejection of the deal, the board said, “Such offers only distract from the government’s stated focus and create the unfortunate appearance that such offers are being made for the purpose of favorably impacting the trading price of existing debt.” The statement goes on to request that creditors “refrain from making unsolicited financing offers at the expense of the people of Puerto Rico.”After the hurricane, it’s vital that people currently suffering get the help they need. Once they do, the biggest worry becomes that Puerto Rico is given support for its short-term needs, and nothing more—that the relief provided by creditors and the federal government will ultimately maintain the economic status quo that left millions of residents impoverished and fleeing to the mainland in the first place. Undoing that will require a much more ambitious plan for investment and infrastructure than currently exists—and the political will to pursue it.
WASHINGTON (The Borowitz Report)—In an experience that he called “traumatic” and “horrifying,” the departing Health and Human Services Secretary, Tom Price, was seated between two screaming babies Friday night on his first-ever commercial flight.
Price, who was flying from Washington, D.C., to his home in Georgia just hours after resigning from his Cabinet position, reacted with alarm after discovering that the airline had assigned him a middle seat between two passengers holding inconsolably shrieking babies on their laps.
Moments after making his terrible discovery, Price urgently called for a flight attendant and reportedly told her, “There are babies on this aircraft. That can’t possibly be allowed.”
After informing Price that babies were, in fact, permitted on commercial flights, the attendant instructed the former Cabinet secretary to fasten his seatbelt and ignored his request to be served a free glass of Dom Perignon champagne and beluga caviar with toast points.
According to witnesses on board, the two babies flanking Price screamed non-stop for the entire duration of the flight, except for a brief period during which one of the babies vomited on Price’s Armani suit.
Doonesbury — Resigned to the job.
Having spent the last fifteen years working with budgets, accounting, and how money is spent and tracked, I can tell you that nothing makes the blood run cold more than hearing the words, “the auditor is here.” It has nothing to do with the people who are doing the audit or a sense of guilt for having tried to pull off something shady. It’s more to do with the fact that if there is a record missing or a number that is off, they will find it and patiently ask you to find it, rectify it, or prove why it shouldn’t be brought to the attention of the authorities, be they your boss or the people who issue subpoenas.
In short, don’t mess with them. They have a job to do, they do it well, numbers and math don’t lie, and if they have a sense of humor — and many of them do, along with pleasant personalities — they are all business when it comes to doing their job. And the best of them work for the IRS.
So this should be interesting.
Special counsel Bob Mueller has teamed up with the IRS. According to sources familiar with his investigation into alleged Russian election interference, his probe has enlisted the help of agents from the IRS’ Criminal Investigations unit.
This unit—known as CI—is one of the federal government’s most tight-knit, specialized, and secretive investigative entities. Its 2,500 agents focus exclusively on financial crime, including tax evasion and money laundering. A former colleague of Mueller’s said he always liked working with IRS’ special agents, especially when he was a U.S. Attorney.
And it goes without saying that the IRS has access to Trump’s tax returns—documents that the president has long resisted releasing to the public.
Potential financial crimes are a central part of Mueller’s probe. One of his top deputies, Andy Weissmann, formerly helmed the Justice Department’s Enron probe and has extensive experience working with investigative agents from the IRS.
“From the agents, I know everyone has the utmost respect for both Mueller and Weissmann,” said Martin Sheil, a retired IRS Criminal Investigations agent.
And he said Mueller and Weissmann are known admirers of those agents’ work.
“They view them with the highest regard,” Sheil said. “IRS special agents are the very best in the business of conducting financial investigations. They will quickly tell you that it took an accountant to nab Al Capone, and it’s true.”
It’s been widely reported that the special counsel’s team is trying to “flip” Paul Manafort, the president’s former campaign CEO, in hopes he will provide evidence against his former colleagues. Former federal prosecutors tell The Daily Beast one of Manafort’s biggest legal liabilities could be to what’s called a “check the box” prosecution. Federal law requires that people who have money in foreign bank accounts check a box on their tax returns disclosing that. And there’s speculation that Manafort may have neglected to check that box, which would be a felony. This is exactly the kind of allegation the IRS would look into.
Like they said, that’s how the Feds nailed Al Capone.
Not that anyone should begrudge giving as much help as possible to the people of Texas, but it is interesting to see how much the Republicans from Texas who voted against aid for recovery from Hurricane Sandy in the Northeast in 2013 now want a blank check from the federal government for recovery from Harvey.
Paul Manafort has new lawyers.
Normally that kind of news isn’t a big deal; in Washington and other places where there’s a lot of complicated stuff going on, high-profile people change attorneys as often as some people change socks. But this seems to be in reaction to the F.B.I. raid two weeks ago.
Trump’s former campaign chair Paul Manafort on Thursday switched up his legal team amid several new reports on the federal investigation into his personal finances.
“Mr. Manafort is in the process of retaining his former counsel, Miller & Chevalier, to represent him in the office of special counsel investigation,” Manafort’s spokesman Jason Maloni said in a statement to Politico. “As of today, WilmerHale no longer represents Mr. Manafort.”
According to Politico, Miller & Chevalier is known for its work specializing in complicated financial crimes.
Manafort was Trump’s campaign chair in the stretch leading up to the 2016 election, and resigned in August 2016 amid scrutiny of his work for a pro-Russian political party in Ukraine.
It’s about the money. It always has been. Who paid it, who’s taking it, what they’re getting for it, where it’s kept… those are the motivators behind it all. And these legal moves are telling me that Mr. Manafort is going to be the one to turn states evidence on Trump.
Bonus Track: From Bloomberg Businessweek, Trump’s legal team is no match to that being put together by Robert Mueller.
I am sure that the Republicans and Trump will try again and again to kill off Obamacare, but the voters are done messing with it, according to Reuters.
A majority of Americans are ready to move on from healthcare reform at this point after the U.S. Senate’s effort to dismantle Obamacare failed on Friday, according to an exclusive Reuters/Ipsos opinion poll released on Saturday.
Nearly two-thirds of the country wants to either keep or modify the Affordable Care Act, popularly known as Obamacare, and a majority of Americans want Congress to turn its attention to other priorities, the survey found.
The July 28-29 poll of more than 1,130 Americans, conducted after the Republican-led effort collapsed in the Senate, found that 64 percent said they wanted to keep Obamacare, either “entirely as is” or after fixing “problem areas.” That is up from 54 percent in January.
The survey found that support for the law still runs along party lines, with nine out of 10 Democrats and just three out of 10 Republicans saying they wanted to keep or modify Obamacare.
The only problem with Congress turning its attention to other priorities is that they will probably make as much of a mess of them as they did of healthcare. The budget will be worse, the infrastructure will continue to crumble, and the only thing that they might pull off is tax “reform,” which to the majority party means nobody pays for anything.