THE TURNING POINT HAS ARRIVED: THE AGENDA TO UNSEAT THE PRESIDENT USING THE 25TH AMENDMENT, WILL IT WORK?
The New American Civil War: Tiberius vs. Rome, Trump vs. Washington. Michael Vlahos @jhuworldcrisis
All of which means that Republicans in Congress need to think of themselves as governing with an independent President—if they don’t already. This doesn’t mean joining Democrats as “the Resistance.” But it does mean acting on their own to fulfill their legislative promises with or without the support of Mr. Trump. If the President goes his own way, at least Republicans can point to votes for legislation that they put on his desk.
Start with the GOP’s main priorities after Labor Day, which include lifting the debt ceiling, funding the government, and passing a budget outline that sets the stage for tax reform. Congress needs to move on all of them no matter what Mr. Trump tweets from the sidelines.
On the debt ceiling, the smart political play is to pass an increase with GOP votes and move on. Some conservatives want to tie policy reforms to the increase, but Democrats know Republicans will get the blame if there’s a default on U.S. debt. GOP voters won’t care about the debt limit in 2018 if Republicans have enough other policy victories.
On funding the government, Republicans in Congress will get no benefit from a shutdown fight over building a border wall. Two-thirds of the country doesn’t support an expensive and largely symbolic wall, and even most Republicans who do won’t like a shutdown to pass it. The GOP should pass a budget that has as many of its priorities as possible, and more money for border enforcement ought to satisfy the immigration restrictionists. The physical wall is Mr. Trump’s personal preoccupation. He can veto a bill without it, but then he’d be responsible for the shutdown.
On tax reform, the White House and Congress are still working together because Mr. Trump is leaving the details to economic adviser Gary Cohn and Treasury Secretary Steve Mnuchin. Mr. Trump could muck it up at any moment with a call for higher income-tax rates, but Congress will have to ignore it. Mr. Trump will have little choice other than to sign whatever Congress sends him if he wants the political victory, and he needs a win as much as Congress does.
Republicans also can’t count on Mr. Trump to provide them any political air cover for tax reform. Taxes were supposed to be the GOP theme during the August recess, but none of the speeches or TV appearances are breaking through because the President can’t give up the spotlight, even if he is hurting himself. The business community and Republicans in Congress will have to sell reform.
Legislative success—especially on tax reform—is the best way Republicans can protect themselves from any Trump undertow in 2018. They need a record to change the campaign subject from whatever the President is tweeting a year from now when he might be contemplating a political affair with Nancy Pelosi.
In defense of NAFTA trade and in doubt of China trade. @richardaepstein @hooverinst
"...Each of these three pieces benefits the United States. Therefore, so does the package taken as a whole. Trump thinks that the trade deficit means that the United States has somehow lost in international trade. But he would never go so far as to say that other nations should shut down their trade with the United States because we run a trade surplus with them. In both domestic and international markets, we shouldn’t impose any external “fairness” constraint on the outcome of voluntary transactions.
The situation with China is far different, because the Chinese only pay lip service to free trade in setting their trade policy. Their chief misdeed is to engage in the widespread theft of intellectual property, which includes the theft of trade secrets, the infringement of patents, and the shipment of counterfeit goods into international markets. The second vice is that China often ties the entrance of American firms into the Chinese market to the willingness of those firms to share their intellectual property with their local Chinese partners who can, of course, use that property in unrelated transactions to obtain an illicit comparative advantage.
These classic hold-up games often lead to a major decline in trade. No state inside the United States is allowed to condition the entry of out-of state businesses into their market on the condition that they surrender intellectual property or agree to special taxes, or to sacrifice access to federal courts. The dominant nondiscrimination rule under the United States Constitution precludes the states from taking these one-sided actions. The result is that the domestic market is free from counterproductive trade wars among the states.
The hard question is what to do in response to outright theft and these illicit tie-in arrangements. Trump has threatened to initiate an enforcement action under Section 301 of the Trade Act of 1974 to unilaterally “impose trade sanctions on foreign countries that either violate trade agreements or engage in other unfair trade practices.” The problem here is that proceeding under this section puts the United States at risk of violating the World Trade Organization’s elaborate system of adjudication to sort these matters out. Stopping unilateral action cuts out the risk of abuse by home countries in favor of their own goods. But the flip side here is that it allows chronic abusers like the Chinese to string out proceedings, which in turn allows them to reap gains from their illicit practices for an indefinite period.
The Chinese insist that any sanctions from the Trump administration would lead to a trade war that neither side could win, given the certainty that the Chinese would retaliate in kind against any unilateral American action. But doing nothing is an implicit ratification of the status quo ante of China’s ongoing trade abuses. At the same time, the Trump administration needs China at the table to discuss its actions in the South China Sea and how best to contain North Korea...."
NAFTA negotiations: AEI’s terms of trade
AEI staff and Claude Barfield | AEIdeas Last week, the first round of NAFTA renegotiation began. Since its passage, AEI experts have played an important role in shaping the debates on the social and economic impacts of NAFTA and other trade issues. Claude Barfield, a resident economics scholar and trade policy expert, has examined whether an expanded NAFTA or other trade agreements will become building blocks or stumbling locks on the future path of trade.
In his 2015 working paper, Barfield provides detailed background analysis and policy recommendations for the area of economics and trade. Specifically, Barfield assesses the objectives that underpin the Global Internet Strategy (GIS) program goals, such as protecting and promoting freedom of expression and combating fragmentation of the Internet. He urges future US administrations to uphold and prioritize the vital digital agenda in order to maintain a free and open internet.
Recently, Barfield has discussed the possible opportunity for NAFTA renegotiations to set precedent for e-commerce rules. He argues that the administration should take advantage of its opportunity to regain some of the initiative for a future pro-market digital trade regime.
Trump’s Talk of Leaving NAFTA Is Thankfully Just Bluster – Allan Golombek, RealClearMarkets
Fix NAFTA Once and for All – Richard Trumka, USA Today
What might have been
James C. Capretta | National Review Online
Here’s how a president really pushes tax reform
James Pethokoukis | AEIdeas
Taxes matter, but maybe not in the way most people think. Most of the time, anyway
James Pethokoukis | AEIdeas
How long does the Administration have to correct the peril in the White House? @richardaepstein @hooverinst
"...The men and women who have joined the Trump Administration aren’t doing so because it enhances their reputations. They have no illusions about Mr. Trump’s character flaws, or if they did, they don’t any more. They are trying to serve their country.
They know nearly 63 million Americans voted for Donald Trump, and that it does the country no good to root for a Presidency’s disintegration. They see a rare moment of united Republican government to move in a better direction on domestic policy. Or they want to correct the erosion of American power and influence that accelerated during the Obama years.
But that task gets harder with every reckless Trumpian flight from normal presidential behavior. Every person has to decide how long he or she can serve in good conscience. But we hope the best stay as long as they can for the good of the country."
Are we now engaged in a great civil war? Michael Vlahos @jhuworldcrisis.
“The 1860 Democratic National Convention convened at South Carolina Institute Hall (destroyed in the Great Fire of 1861) in Charleston, South Carolina on 23 April 1860. Charleston was probably the most pro-slavery city in the U.S. at the time, and the galleries at the convention were packed with pro-slavery spectators.
The front-runner for the nomination was Douglas. Douglas was considered a moderate on the slavery issue. With the 1854 Kansas-Nebraska Act, he advanced the doctrine of popular sovereignty: allowing settlers in each Territory to decide for themselves whether slavery would be allowed – a change from the flat prohibition of slavery in most Territories under the Missouri Compromise, which the South had welcomed. However, the Supreme Court’s ensuing 1857 Dred Scott decision declared that the Constitution protected slavery in all Territories.
Douglas was challenged for his Senate seat by Abraham Lincoln in 1858, and narrowly won re-election by professing the Freeport Doctrine, a de facto rejection of Dred Scott. Now militant Southern "Fire-eaters", such as William Yancey of Alabama, opposed him as a traitor. Many of them openly predicted a split in the party, and the election of Republican front-runner William H. Seward.
Urged by Yancey, the delegations from seven Deep South states (Georgia, Alabama, Mississippi, Louisiana, Arkansas, Texas, and Florida) met in a separate caucus before the convention. They reached a tentative consensus to "stop Douglas" by imposing a pro-slavery party platform which he could not run on if nominated.
The “Fire-eater” majority on the convention's platform committee, chaired by William Waightstill Avery of North Carolina, produced an explicitly pro-slavery document, endorsing Dred Scott and Congressional legislation protecting slavery in the territories. Northern Democrats refused to acquiesce. Dred Scott was extremely unpopular in the North, and the Northerners said they could not carry a single state with that platform. On 30 April, the convention by a vote of 165 to 138 adopted the minority (Northern) platform, which omitted these planks. 50 Southern delegates then left the convention in protest, including the Alabama, Florida, Georgia, Louisiana, Mississippi, South Carolina, and Texas delegations, three of the four delegates from Arkansas, and one of the three delegates from Delaware.
The departed delegates gathered at St. Andrews Hall on Broad Street, declared themselves the real convention, and awaited conciliatory action by the Institute Hall convention. That didn't happen. Instead, the Institute Hall convention proceeded to nominations. The dominant Douglas forces believed their path was now clear.
Six major candidates were nominated at the convention: Douglas, former Treasury Secretary James Guthrie of Kentucky, Senator Robert M. T. Hunter of Virginia, Senator Joseph Lane of Oregon, former Senator Daniel S. Dickinson of New York, and Senator Andrew Johnson of Tennessee.
Douglas led on the first ballot, with 145½ of 253 votes cast. However, the convention rules required a two-thirds vote to approve a nomination. Furthermore, convention chairman Caleb Cushing ruled that two-thirds of the convention's whole membership was required, not just two-thirds of those actually present and voting.
Douglas thus needed 56½ more votes, or a total of 202, from the 253 delegates still present. The convention held 57 ballots, and though Douglas led on all of them, he never got more than 152 votes. On the 57th ballot, Douglas got 151½ votes, still 50½ votes short of the nomination, though far ahead of Guthrie, who was second with 65½. In desperation, on 3 May the delegates voted to adjourn the convention, and reconvene in Baltimore six weeks later….”
The road to 4% growth is cutting the corporate tax rate. @larry_kudlow.
• Simplify taxes. The principles of simple, fair and progressive taxation are vital. If you lower rates, eliminate loopholes, and otherwise simplify the code, you create opportunity for growth. Studies show that permanently lowering the corporate rate by even 10 percentage points would increase GDP by 1% to 2% without lowering tax revenue. That means our government could still fund programs critical to success while allowing individuals and businesses to invest more for growth.
• Invest in infrastructure. We must expand and modernize our roads, bridges, airports, seaports and other modes of transportation. China, India, and others are investing big in infrastructure while the U.S. lags. We need a long-term national approach with accountability and multiple funding mechanisms, including user fees and innovative partnerships with the private sector.
UPS and FedEx are major users of the transportation system, and we are prepared to pay our share for the use of new roads, bridges, and aviation systems. But we also believe those funds should be dedicated specifically to transportation infrastructure. And the time is now to find new ways of encouraging productivity, such as longer combination vehicles and safety enhancements.
• Free and fair trade. In a globally interconnected world, trade is vital to every American. With 95% of the world’s consumers located outside the U.S., we need to lead globalization through negotiation of high-standard free-trade agreements. Similarly, policies like Open Skies have enabled companies like ours to serve a global marketplace.
Restoring Quality Health Care: A Six Point Plan for Comprehensive Reform at Lower Cost. Scott Atlas @hooverinst
A decade prior to passage of the ACA, the ambitious World Health Report 2000, which ranked the health care systems of nearly 200 nations, provided what appeared to be a data-driven argument for dramatic health reforms in the United States. Its most notorious finding—the relatively low U.S. ranking (37th) in “overall performance” as defined by WHO—has been repeatedly offered as objective evidence of the overall failure of U.S. health care by advocacy groups.
Contrary to the naively drawn inferences from that study, the WHO study’s methods and conclusions were heavily criticized in a body of peer-reviewed literature by international academic experts who examined the study in detail. Fundamental flaws in methodology, large margins of error in data, overreliance on markedly flawed measures of health care quality, and highly subjective inputs based on ideological bias put forth as data—even in cases when no actual data was available—have undermined the legitimacy of the WHO’s comparative rankings.
The World Health Report 2000 can be considered, at best, deceptive—a document that was essentially a ranking of countries based on their alignment with a specific political and economic ideology—socialized medicine—rather than an objective measurement of health system quality. Indeed, Mark Pearson, head of health for the Organization for Economic Cooperation and Development, when asked about the WHO report, told the Wall Street Journal in October 2009, “Health analysts don’t like to talk about it in polite company. It’s one of those things that we wish would go away.”
Beyond the scandalous bias of the WHO document, the facts throughout the world’s leading medical journals disproved the false narrative that was promulgated through the popular press to justify the ACA. The distortions continue today, as our politicians push for a single payer system. Yet peer-reviewed data consistently demonstrate that access to care, as well as quality of care, are factually worse in single-payer systems than they were in pre-ACA America.
Americans need to see past the fear mongering about the need to preserve certain parts of the law and understand that the ACA indeed must be eliminated and replaced. Its misguided amalgam of regulations generated skyrocketing insurance premiums, reduced patient choice in doctors, funneled millions more poor people into substandard programs, and accelerated consolidation throughout the health care industry—all of which are serious consequences that directly harmed patients.
Reducing the price of medical care in a more freely functioning market represents the fundamental basis for improving access to affordable, high quality care without eliminating the choice that Americans demand, and without impeding the innovations in health care that we all hope for and need. Broadly available options for cheaper, limited mandate, high deductible coverage; markedly expanded HSAs; and targeted tax incentives to leverage their use are keys to increasing price sensitivity and reducing health care prices. Adding new incentives to consider costs with reforms to strategically increase the supply of medical care would generate significant competition and reduce the price of health care overall.
A comprehensive reform plan joining these important incentives with common-sense deregulation would achieve high quality health care at reduced cost. Such a plan would conservatively decrease private expenditures by $2.7 trillion and federal spending by $1.5 trillion, shifting the policy paradigm from one of “raising taxes or reducing benefits” to one using incentives to achieve quality and value. These should be the goals ..
THE CONTOURS OF TAX REFORM