Is There Emerging Support For Trump Tariff Policies Toward China?

I was on an ABC panel last night debating President Trump’s tariff policies with a Democratic politician and a left-of-center university economist when something very interesting emerged: They both agreed that China is a bad player in trade and that it should be forced into more fair trade with the U.S.

All three of us agreed on a major Trump policy. That left the moderator a bit bewildered, and for good reason. It’s a pretty amazing development considering getting agreement on the sky being blue is nearly impossible in today’s environment. But just as surprising and largely uncovered, it is supported by a substantial majority of Americans, if you move past the media spin.

An April poll by Luntz Global Partners found that 62 percent of Americans agree with Trump’s attempt to use tariffs, believing that the risks are worth it to get better trade deals. That includes more than one-third of Democrats and a huge majority of Republicans.

“Voters don’t buy the ‘fear-factor’ that jobs are at-risk, instead agreeing that Trump’s tariffs are both ‘necessary,’ and in the words of Senator Sherrod Brown, ‘long overdue,’” said Alyssa Salvo, president of Luntz Global Partners. Brown is a Democrat from Ohio — a state that stands to gain a lot from better trade policies with China.

Showing a more shrewd understanding of tariffs than a lot in the media, the Luntz poll found that 56 percent of Americans expected that the tariffs would have some negative effects — because of course they will, short-term, at least on consumers on certain products.

The media insists that Trump’s tariffs are launching a terrible and dangerous trade war and wonder why Republicans no longer support free trade. As I mentioned at that point on the ABC panel, we do not have free trade with China and have not for decades. Too many presidents paid minimal lip service to the Chinese tariffing cars at 25 percent among most other products, blackmailing American companies to give up trade secrets to enter the Chinese market and just flat out stealing American technology.

They have not been a trade partner, but a trade enemy.

Trump has rightly identified this problem that a broad cross-section of Americans also identify, and is trying to fix it, of which Americans also largely approve. President Obama didn’t really give a fig about American industry; his attention was elsewhere focused on destructive identity politics and socialized health care.

What is surprising is that perhaps a growing number of Democrats (not in Washington, that’s a lost cause) are coming to see the problem with China. Only forceful actions will change it. Talk alone will not.

Tariffs are neither good or evil. They just are. If they are used to protect certain industries or companies in perpetuity, then they are bad. China does that as well as several European Union countries and Canada — just on much smaller scales than China. But if tariffs are used as a short-term leveraging tool  — particularly when done by the bigger importing country — then they are good.

Of course, the U.S. can and likely will win any trade skirmish with China, or Europe, for that matter. Remember, the U.S. is not just the biggest economy, its the biggest shopper — by far. That means in every trade war with countries with which we have a trade deficit, we have the upper hand in a tariff war. The bigger the deficit, the bigger the upper hand.

The U.S. has the largest trade deficit with China, by far, and China cannot come close to matching us tariff for tariff because they already have high tariffs that have kept a lot of U.S. companies out. Which means, their companies and economies get hurt much more than ours, because they have largely been either gaming the system or downright cheating.

This emerging reality has one more meaning: It’s good politics. Tariffs on steel, cars can help heavy manufacturing states, particularly in those that Trump swung from the Democrat column, such as Pennsylvania, Ohio and Michigan. There may be a mix of short-term pain and gain, but should be long-term gain. And it demonstrates he’s actually fighting for blue-collar American workers, voters that identity-poisoned Democrats have walked away from.

EDITORS NOTE: This column originally appeared in The Revolutionary Act. The featured image is by Gage Skidmore / CC BY-SA 2.0.

Once Again, Obamacare’s Constitutionality Comes Into Question

Readers might recall that, in 2012, the Supreme Court of the United States upheld the constitutionality of the Patient Protection and Affordable Care Act, colloquially known as Obamacare, by a 5-4 vote in a case captioned NFIB v. Sebelius.

Last year, Congress revised Obamacare. In the Tax Cuts and Jobs Act of 2017, Congress eliminated the penalty imposed on people who do not purchase health insurance by reducing the penalty to $0 effective January 2019.

What makes that 2017 law interesting for present purposes is this: Chief Justice John Roberts wrote the controlling opinion in NFIB v. Sebelius; he concluded that the Obamacare penalty can be characterized as a “tax”; and he decided that, so viewed, Obamacare was a constitutional exercise of Congress’ power to raise taxes.

Enter Texas. In February of this year, Texas and several other states filed a lawsuit alleging that, by reducing the Obamacare tax to zero, Congress eliminated the only basis on which the Supreme Court had upheld the constitutionality of Obamacare. A sine qua non of a tax is that it generates revenue, Texas argued, and beginning in January 2019 Obamacare will no longer do so.

Accordingly, concluded Texas, starting next year Obamacare can no longer be upheld as a lawful exercise of Congress’ taxing power, so the federal courts should hold the law unconstitutional now.

The possibility that Obamacare could yet be consigned to the ash heap delighted some and troubled others. (For my opinion on the matter, see here.) Recently, the Department of Justice filed its answer to the Texas complaint. In it, the department agreed with the plaintiffs that Obamacare will become unconstitutional once the individual mandate penalty effectively disappears next year.

The Justice Department believes that, as a result, several provisions of Obamacare must go, such as the requirement that insurance companies provide coverage to someone with a pre-existing condition—but the Justice Department thinks that the rest of the statute can stand.

Texas disagrees. It argues that the Obamacare statute is like the base in Jenga: Once you remove the critical elements, the entire superstructure falls apart.

So what happens now? Here is how the case might proceed.

The district court is likely to act without delay. Why? There are no facts in dispute, only (at most) two legal issues: Is Texas right that Obamacare can no longer be upheld as a lawful exercise of Congress’ taxing power? If “No,” game over. If “Yes,” then is Texas also right that the unconstitutional portion(s) of the law cannot be severed from the remainder without leaving Obamacare a jumble of words that does not make sense?

Those issues may be difficult to resolve legally, but there is no need for a trial over the facts. Plus, the district court knows that, in all likelihood, the Supreme Court will ultimately have to resolve this dispute and that, the closer it gets to January 2019, the more attention there will be on the effect of eliminating the “tax” on the insurance markets.

The Supreme Court will need to decide this issue because of the odd way that it upheld the constitutionality of Obamacare in NFIB v. Sebelius. Four justices concluded that Obamacare was a lawful regulation of commerce, and four disagreed. Roberts was the fifth vote to uphold Obamacare. He decided that the health care law could be upheld as a tax, but not as a regulation of commerce.

The result was that five justices found the law constitutional, but they disagreed about why.

Given the odd nature of the court’s lineup in NFIB v. Sebelius and the pending disappearance of the “tax,” it is incumbent on the Supreme Court to take up the issue once again and—hopefully—come up with a majority opinion that puts the matter to rest.

Once the district court issues its decision, it is possible for one or more parties to ask the Supreme Court to review the case even before the U.S. Court of Appeals for the 5th Circuit does.

How? One of the parties could file in the Supreme Court what is known as a “petition for a writ of certiorari before judgment,” a mechanism that allows a party to leapfrog over the appeals court and go directly to the Supreme Court.

The Supreme Court does not have to grant such a petition, and it prefers to have at least one appeals court review an issue before taking it up, because it likes the help that comes with having three circuit judges write about a problem. But it may not make much of a difference because the court of appeals is also likely to act expeditiously.

Regardless of how the case reaches the Supreme Court, it is likely that the Supreme Court will revisit the constitutionality of Obamacare this fall. With luck, the whole matter will finally be resolved before the end of this year. Stay tuned.

COMMENTARY BY

Portrait of Paul J. Larkin Jr.

Paul J. Larkin Jr. directs The Heritage Foundation’s project to counter abuse of the criminal law, particularly at the federal level, as senior legal research fellow in the Center for Legal and Judicial Studies. Read his research.

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

We are looking for a select few conservatives to become a Heritage Foundation member. With your membership, you’ll qualify for all associated benefits and you’ll help keep our nation great for future generations.

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Antitrust Matters Matter

United States antitrust laws regulate the organization and conduct of business corporations on state and national levels to provide fair competition for the benefit of consumers. Why are they necessary?

The Federal Trade Commission (FTC) has the answer.

“Free and open markets are the foundation of a vibrant economy. Aggressive competition among sellers in an open marketplace gives consumers – both individuals and businesses – the benefits of lower prices, higher quality products and services, more choices, and greater innovation. The FTC’s competition mission is to enforce the rules of the competitive marketplace – the antitrust laws. These laws promote vigorous competition and protect consumers from anticompetitive mergers in business practices. The FTC’s Bureau of Competition, working in tandem with the Bureau of Economics, enforces the antitrust laws for the benefit of consumers.”

The Sherman Antitrust Act, passed by Congress in 1890 under President Benjamin Harrison, was the first Federal act that outlawed interstate monopolistic business practices. It is considered a landmark decision because previous laws were limited to intrastate businesses.

In 1890 Utah, Oklahoma, New Mexico, Arizona, Alaska, and Hawaii were not even states. The Transcontinental Railroad that connected the eastern United States with the Pacific coast was in its infancy. That was then, this is now. Today there are 50 states, world travel is commonplace, and antitrust matters matter to every person on Earth.

Why? What do antitrust matters have to do with me? The answer is EVERYTHING.

The protections of antitrust laws focus on the unfairness of business monopolies on consumers. What about the unfairness of political monopolies on citizens? America broke free from the monopolistic centralized power of the British monarchy and won its independence after years of war and death. Why? To create a country based on the principles of individual freedom and liberty.

Every freedom articulated by our Founding Fathers was designed to protect the citizenry by promoting individualism and fairness. The Constitution and Bill of Rights are the greatest antitrust documents ever written providing:

  • Freedom of religion
  • Freedom of speech
  • Freedom of the press
  • Freedom of assembly
  • Freedom to petition
  • Right to keep and bear arms
  • No quartering of soldiers
  • Freedom from unreasonable searches and seizures
  • Right to due process
  • Right to speedy trial
  • Freedom from cruel and unusual punishment

The United States Constitution protects citizens from anticompetitive mergers in government practices. The United States of America is the greatest experiment in individual freedom and liberty the world has ever known specifically because of its antitrust antimonopolistic infrastructure. The Constitution defines the checks and balances of power and the individual rights of its citizens.

The current battle for our national sovereignty is an antitrust struggle against global governance. Globalism must not be confused with fair global trade between independent nations. Globalism is the monopolistic anticompetitive political practice of concentrating world power in the hands of a few globalist elite rulers. It is a return to the feudal infrastructure of a paternalistic pyramid with the few elites at the top and the masses of enslaved people at its base.

In 1890 antitrust legislation was necessary to protect consumers from exploitive business practices that focused on goods and services in the interstate marketplace. In 2018 the competition is over the world of ideas. Political systems of national sovereignty supporting individual freedom are battling political systems supporting collectivist globalism.

Globalists are selling planetary governance. They are facilitating the sale by concentrating their power with mergers and acquisitions that limit the information the public is offered. Monopolistic information through censorship and partisan program content on the Internet, television, radio, films, and particularly in academic curricula indoctrinate the unsuspecting public toward collectivism and planetary governance.

Today’s consumers need protection from exploitive political practices to provide fair competition for the benefit of consumers. The American public needs to become aware of how protective antitrust legislation that prevents monopolistic concentration of power affects them. Global governance is a worldwide concentration of power that eliminates individual freedom in the same way global monopolies on goods and services eliminate fair competition. Free and open markets are the foundation of a vibrant economy just like the free and open marketplace of ideas is the foundation of freedom.

The choice that Americans must make is between “free” stuff in a monopolistic collectivist political system of global governance that will enslave them, or freedom in an independent sovereign United States of America. The coordinated effort to delegitimize and overthrow President Donald Trump is the coordinated effort to delegitimize and overthrow our national sovereignty. Antitrust matters matter because monopolistic oppression is never good for the consumer whether they are buying goods, services, or their freedom.

EDITORS NOTE: The featured image is of President Donald Trump arrives for the official welcoming ceremony the G7 Summit in the Charlevoix town of La Malbaie, Quebec, Canada, June 8, 2018. (Christinne Muschi/Reuters) This column originally appeared on the Goudsmit Pundicity.

Foundation grants $100,000 to Islamic Supremacists to force Islamic Law on American businesses

CAIR issued a news release titled CAIR-Massachusetts Receives $100,000 Cummings Foundation Grant.  The news release states in part:

The Massachusetts chapter of the Council on American-Islamic Relations is one of 100 local nonprofits to receive grants of $100,000 each through Cummings Foundation’s “$100K for 100” program.

CAIR-Massachusetts intends to use the funds to hire two legal fellows to assist with case management and to support its civil rights programming for the Massachusetts Muslim community.

Cummings Foundation has granted $100,000 to CAIR Massachusetts so that it can harass and sue businesses to force them to comply with certain provisions of Islamist Sharia law.  Many of the oppressive tenets of Sharia law are antithetical to the rights afforded all Americans by the United States Constitution.

CAIR has harassed companies in an attempt to force them to allow employees Salah times of prayer.  Requiring businesses to allow groups of employees to meet to pray five times a day results in making Islamic Salah times for Muslim prayer a priority over fairness to other employees and a company’s efficiency, profitability.  Example 1.  Example 2.  Example 3.  Example 4.  Example 5.

CAIR has harassed companies in an attempt to force them to allow employees to wear a hijab which exemplifies Islamist oppression towards women that is commanded by Sharia law and fatwas.  Pew Research reports that 57% of Muslim women in America do NOT wear a hijab.  The hijab is a symbol of the cruel creed that it represents.   The hijab was invented in the 1970s over 1300 years after the Quran was written.  The hijab is not derived from the Quran but is legislated by Islamist dictates and fatwas that oppress and dominate woman.   Strict Islamic law, Sharia and fatwa enforcement requiring women to wear the hijab started only within the last 50 years.  Today, women in Iran and Saudi Arabia are put in jail for protesting the hijab.   Click here for more info on hijab.  Example 1.  Example 2.  Example 3.  Example 4.

Numerous Council on American Islamic Relations’ officials have been sentenced to prison and/or deported for supporting terrorism.  CAIR officials have defended people convicted of terror activities in the United States.  CAIR is linked to Hamas and Muslim Brotherhood.  Click here for more info on CAIR.

Did Cummings Foundation officials know about CAIR’s terror linked history and its plans to use Cumming’s grant money to harass American businesses to comply with un-American Islamist Sharia law provisions before granting CAIR $100,000?

Here is a list of all of Cummings Properties real estate rental properties.

Florida Family Association has prepared an email for you to send to express concern to Cummings Foundation officials regarding grant support for CAIR.

To send your email, please click the following link, enter your name and email address then click the “Send Your Message” button. You may also edit the subject or message text if you wish.

Click here to send your email to express concern to Cummings Foundation officials regarding grant support for CAIR.

Click here for contact information.

What We Can Learn About Welfare Reform from Europe

Daniel J. Mitchell Some European countries have made big changes to their welfare systems that are getting more people back to work.

by Daniel J. Mitchell

America has a major dependency problem. In recent decades, there’s been a significant increase in the number of working-age adults relying on handouts.

This is bad news for poor people and bad news for taxpayers. But it’s also bad news for the nation since it reflects an erosion of societal capital.

For all intents and purposes, people are being paid not to be productive.

Guided by the spirit of Calvin Coolidge, we need to reform the welfare state.

Professor Dorfman of the University of Georgia, in a column for Forbes, pinpoints the core problem.

The first failure of government welfare programs is to favor help with current consumption while placing almost no emphasis on job training or anything else that might allow today’s poor people to become self-sufficient in the future. …It is the classic story of giving a man a fish or teaching him how to fish. Government welfare programs hand out lots of fish, but never seem to teach people how to fish for themselves. The problem is not a lack of job training programs, but rather the fact that the job training programs fail to help people. In a study for ProPublica, Amy Goldstein documents that people who lost their jobs and participated in a federal job training program were less likely to be employed afterward than those who lost their jobs and did not receive any job training. That is, the job training made people worse off instead of better. …Right now, the government cannot teach anyone how to find a fish, let alone catch one.

And Peter Cove opines on the issue for the Wall Street Journal.

…the labor-force participation rate for men 25 to 54 is lower now than it was at the end of the Great Depression. The welfare state is largely to blame. More than a fifth of American men of prime working age are on Medicaid. According to the Census Bureau, nearly three-fifths of nonworking men receive federal disability benefits. The good news is that the 1996 welfare reform taught us how to reduce government dependency and get idle Americans back to work. …Within 10 years of the 1996 reform, the number of Americans in the Temporary Assistance for Needy Families program fell 60%.

Interestingly, European nations seem to be more interested in fixing the problem, perhaps because they’ve reached the point where reform is a fiscal necessity.

Let’s look at what happened when the Dutch tightened benefit rules.

fascinating new study from economists in California and the Netherlands sheds light on how welfare dependency is passed from one generation to the next—and how to save children from lives of idleness.

A snowball effect across generations could arise if welfare dependency is transmitted from parents to their children, with potentially serious consequences for the future economic situation of children. …there is little evidence on whether this relationship is causal. Testing for the existence of a behavioural response, where children become benefit recipients because their parents were, is difficult… Our work overcomes these identification challenges by exploiting a 1993 reform in the Dutch Disability Insurance (DI) programme… The 1993 reform tightened DI eligibility for existing and future claimants, but exempted older cohorts currently on DI (age 45+) from the new rules. This reform generates quasi-experimental variation in DI use… Intuitively, the idea is to compare the children of parents who are just over 45 years of age to children whose parents are just under 45. .

Here’s the methodology of their research.

The first step is to understand the impact of the 1993 reform on parents. Figure 1 shows that parents who were just under the age 45 cut-off, and therefore subject to the harsher DI rules, are 5.5 percentage points more likely to exit DI by the year 1999 compared to parents just over the age 45 cut-off. These treated parents saw a 1,300 euro drop in payments on average. …the reform changed other outcomes as well. There is a strong rebound in labour earnings.

This chart from their research captures the discontinuity.

Here are the main results.

The second step is to see how children’s DI use changed based on whether the reform affected their parents. We measure a child’s cumulative use of DI as of 2014, by which time they are 37 years old on average. Figure 2 reveals a noticeable jump in child DI participation at the parental age cut-off of 45. There is an economically significant 1.1 percentage point drop for children if their parent was exposed to the reform, which translates into an 11% effect relative to the mean child participation rate of 10%. …welfare cultures, defined as a causal intergenerational link, exist.

This second chart illustrates the positive impact.

But here’s the most important part of the research.

Reducing access to redistribution to parents is a good way of boosting income and education for children.

…we examine whether a child’s taxable earnings and participation in other social support programmes change. Cumulative earnings up to 2014 rise by approximately €7,200 euros, or a little less than 2%, for children of parents subject to the less generous DI rules. In contrast, we find no detectable change in cumulative unemployment insurance receipt, general assistance (i.e. traditional cash welfare), or other miscellaneous safety net programs. Looking at a child’s educational attainment, there is intriguing evidence for anticipatory investments. When a parent is subject to the reform which tightened DI benefits, their child invests in 0.12 extra years of education relative to an overall mean of 11.5 years. …these findings provide suggestive evidence that children of treated parents plan for a future with less reliance on DI in part by investing in their labour market skills.

And it’s also worth noting that taxpayers benefit when welfare eligibility is restricted.

These strong intergenerational links between parents and children have sizable fiscal consequences for the government’s long term budget. Cumulative DI payments to children of the targeted parents are 16% lower. This is a substantial additional saving for the government’s budget, especially since there is no evidence that children substitute these reductions in DI income for additional income from other social assistance programmes. Furthermore, there is a fiscal gain resulting from the increased taxes these children pay due to their increased labour market earnings. Overall, we calculate that through the year 2013, children account for 21% of the net fiscal savings of the 1993 Dutch reform in present discounted value terms. This share is projected to increase to 40% over time.

Ryan Streeter of American Enterprise Institute explains that other European nations also are reforming.

Welfare reformers might draw some lessons from unlikely places, such as Scandinavia. While progressives like to uphold Nordic democratic socialism as a model for America, the Scandinavian welfare systems are arguably more pro-work than ours… For instance, to deal with declining labor force participation, Denmark eliminated permanent disability benefits for people under 40 and refashioned its system to make employment central. Sweden reformed its welfare system to focus on rapid transitions from unemployment to work. Their program lowers jobless assistance the longer one is on welfare. The Nordic model is more focused on eliminating reasons not to work such as caregiving or lack of proper training than providing income replacement. Similarly, the British government combined six welfare programs with varying requirements into a single “universal credit.” The benefit is based on a sliding scale and decreases as a recipient’s earnings increase, replacing several differing formulas for phasing out of welfare programs with one. An evaluation of the new program, which encourages work, found that 86 percent of claimants were trying to increase their work hours and 77 percent were trying to earn more, compared to 38 percent and 55 percent, respectively, under the previous system. …Scandinavia and Britain learned a while ago that successful welfare reform is not just about how much money a country spends on people who earn too little. It’s really about how to help them find and keep a good job. It’s time for America to catch up.

Amen.

For what it’s worth, I think we’ll be most likely to get good results if we get Washington out of the redistribution business.

In effect, block grant all means-tested programs to the states and then phase out the federal funding. That would give states the ability to experiment and they could learn from each other about the best way of helping the truly needy while minimizing incentives for idleness.

P.S. This Wizard-of-Id parody is a very good explanation of why handouts discourage productive work.

Reprinted from International Liberty.

Daniel J. Mitchell

Daniel J. Mitchell

Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.

The Unreported Story Of America’s Booming Small Businesses

The untold story — the story the media refuses to tell — is that American small businesses are just banging it under the tax reform package the GOP Congress passed, every Democrat voted against, and Trump signed into law.

American economic strength as measured by unemployment, employment growth, GDP growth and other common measures is perhaps as hot as it has ever been. Even without knowing the exact numbers, Americans recognize this reality and that explains part of the reason President Trump’s approval ratings continue to rise and the generic Congressional ballot continues to narrow.

At the same time, and acting in tandem, small business confidence has hit an all-time high. This matters because businesses make investment, expansion and hiring decisions based on their confidence in the economy going forward, all of which suggests that the economic growth we are seeing has real, lasting legs — barring an unforeseen catastrophic event.

Small businesses are the heart and soul of the American economy. They always have been, and they always will be if the American economy is to retain is global leadership and strength. Apple, Google, Exxon-Mobil, Microsoft, General Motors, may be great companies. But huge companies are not what built and sustain the American economy. Small businesses that blanket every community are that.

And the Trump GOP tax cuts, along with ongoing deregulation, are playing a major role infusing them.

John Horne is a small businessman on the Gulf Coast of Florida and his story is exemplar of hundreds of thousands of small businesses. He owns four restaurants in Manatee County, just south of Tampa, and employs 333 people — 300 of whom are hourly employees with an annual payroll of $2.5 million; 33 are managers who earned $1.5 million in salary and bonuses in the past year.

He recently wrote in SRQ magazine how the tax cuts are affecting his business.

“I met with my CPA after tax season this year when he brought me my returns. What he explained to me was one of the parts of the new Tax Cut and Jobs Act where I get a 20 percent Business Income Deduction this year. He showed me what my taxes were in ’17 and if the new code were in effect what they would have been. I’ve already planned 2018, plugging my adjusted gross income for this year with the 20-percent deduction. We’ve been very consistent in our stores over the last 10 years as far as bottom lines go.”

Like most small businesses — and unlike the caricature created by Democrats and the media — Horne saw a great opportunity arising from the 20-percent reduction that the Trump GOP tax cuts gave him. He is taking that money and reinvesting most of it in his company and people, just like most American small businesses will:

“There are so many options, one I’ve already taken. Back in April after I met with my accountant, I bonused $60,000 to some of my staff. I purchased two new two-sided LED signs at $20,000 each for two of my locations to attract new customers. I heard my accountant say we’d probably realize $100,000 in savings/benefits from the new plan.”

Horne is in the restaurant business, which too many people deride is minimum wage. But that’s not really true. Of his 300 hourly staff members, no one is paid minimum wage; 113 earn $10 and $12.50 per hour; 39 earn between $12.50 and $15; 40 between $15 and $20; and 64 over $20. And about 47 percent of the hourly staff earn more than $15 dollars per hour.

Expect those wages to move up. The suddenly strong economy undergirded by the tax cuts and deregulation is now driving wage growth at small businesses. “The low unemployment rate is contributing to steady increases in wage growth,” according to Martin Mucci, president and CEO of Paychex. That means Horne and everyone else will have to pay more to keep and get employees.

Further, the CBO now reports that the tax cuts may pay for themselves, eliminating the “scary” $1.5 trillion deficit issue. That’s because of the economic growth roaring through the economy based on thousands of reinvestment decisions such as Horne’s.

Last June, the CBO said GDP growth for 2018 would be just 2 percent. Now it estimates growth will be a robust 3.3% — a significant boost. It also cranked up its forecast for 2019 from a paltry 1.5 percent to 2.4 percent. The CBO now expects GDP to be $6.1 trillion bigger by 2027 than it did before the tax cuts.

All of those trillions in GDP will be taxed and that will go a long way toward erasing the deficit — unless Congress continues to spend like drunken sailors, which unfortunately is a safe bet.

Horne’s small business is a down-to-earth illustration of this, also. In the last 12 months, FICA payments at his four stores were $552,544. Matched with the employees’ payments, that means his small business contributed more than $1.1 million in taxes just to support Social Security.

All of this is the undeniable reality of lifting high tax and regulatory burdens off small businesses. When the weight of government on the backs of small businesses is lessened, those businesses take off.

Unfortunately, that is a story most Americans are not being told.

EDITORS NOTE: This column originally appeared in The Revolutionary Act.

Here Are 5 New Signs Social Security Is Going Insolvent

The Social Security Administration released its annual trustees report this week, and the prognosis is not good.

Trust fund depletion—the date when Social Security’s reserves will be exhausted and the program will only be able to spend what it receives in payroll taxes at that time—is approaching at a rapid pace. This year, Social Security will dip into its reserves for the first time since 1982.

Simply put, the trust fund is being drained.

The Social Security trustees report is a key pulse check on the single largest federal government program—the Old-Age and Survivors Insurance program—and its sibling, the Disability Insurance Program.

Americans should be made aware of the true state of Social Security so they can better understand why reforming the program is not only necessary, but absolutely essential.

Here are five takeaways from the most recent financial report:

1. $41 billion cash-flow deficit in 2017.

Social Security is still considered solvent and able to pay full benefits because it has accumulated a $2.9 trillion trust fund, but since the entirety of its trust fund consists of IOUs, cash-flow deficits must be financed by general revenue taxes or new public borrowing.

Since 2010, the Old-Age and Survivors Insurance program has taken in less money from payroll tax revenues and the taxation of benefits than it pays out in benefits, resulting in cash-flow deficits.

2. $16.1 trillion in unfunded obligations.

The trustees report that Social Security’s unfunded obligation has reached $13.2 trillion. That’s the difference between what the program is expected to receive in income, and what it’s expected to spend over the next 75 years.

But this figure assumes that the $2.9 trillion in trust fund reserves are available to be spent. The problem is that these reserves represent liabilities for the U.S. taxpayer.

The payroll revenues have already been spent and the trust fund has been credited with U.S. bonds, which represent claims on the American taxpayer. So, the actual unfunded obligation is $16.1 trillion.

3. Insolvent by 2034.

Social Security is only legally permitted to spend more than it takes in until its trust fund is depleted. And, based on current projections, the Social Security Old-Age, Survivors, and Disability Insurance trust funds will be depleted by 2034.

When that happens, Social Security payouts will automatically be cut to the amount the programs will receive in revenues, regardless of benefits due at that time.

4. Automatic 21 percent cut in benefits.

Once both Social Security trust funds are depleted, the programs will only be able to pay out 79 percent of scheduled benefits, based on payroll and other Social Security tax revenues projected at that time.

What this means for beneficiaries is that in the absence of congressional action, benefits could be delayed or indiscriminately cut across the board by 21 percent.

5. Delaying reform comes with a high cost.

In their report, the trustees highlight that if Congress waits until the trust funds become exhausted, the cost of making the program solvent will be as much as 40 percent higher. That means much deeper benefit cuts and higher tax increases for workers and beneficiaries.

If Congress opted to raise the payroll tax rate to cover the shortfall, without adjusting benefits, workers would need to part with 16.3 percent of their covered earnings, up from the current rate of 12.4 percent.

What Congress Can Do

There are several key reforms Congress should pursue in order to preserve benefits for the most vulnerable beneficiaries, without increasing the tax or debt burden on younger generations. The longer Congress waits the act, the more painful the changes will be down the road to address Social Security’s looming insolvency.

The Social Security Reform Act of 2016, introduced by Rep. Sam Johnson, R-Texas, presents a reasonable, targeted, and fiscally responsible approach to begin reforming Social Security.

Johnson’s plan would enhance the progressive features of the Social Security benefit formula, focusing benefits on American workers with lower incomes, while reducing benefits for upper-income earners who are better able to provide for their own retirement needs through savings and investment.

Johnson’s proposal would also gradually raise the full retirement age to 69. Americans would be encouraged to work longer, if they can, through the accrual of higher benefits for those who wait until 72 years of age to collect benefits.

These and other policies in the Johnson bill demonstrate that commonsense reform is possible and can be done without requiring higher taxes.

The growing Social Security crisis is not going away, and the president and Congress must work together to begin to resolve it. Social Security benefits should be more appropriately targeted, and Americans of all income levels should be empowered to own more of their retirement by reaping the gains from economic growth in their personal nest eggs.

The trust fund is steadily being drained. Social Security reform is both urgent and essential.

COMMENTARY BY

Portrait of Romina Boccia

Romina Boccia focuses on federal spending and the national debt as the deputy director of Thomas A. Roe Institute for Economic Policy Studies and the Grover M. Hermann fellow in federal budgetary affairs at The Heritage Foundation. Read her research. Twitter: .

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

We are looking for a select few conservatives to become a Heritage Foundation member. With your membership, you’ll qualify for all associated benefits and you’ll help keep our nation great for future generations.

ACTIVATE YOUR MEMBERSHIP TODAY

EDITORS NOTE: The featured image is by GetUpStudio/Getty Images.

THE B-1 ‘FRANKEN-VISA’ NIGHTMARE: The little-known visa program that is sabotaging American workers.

It is important to give credit where credit is due.  I have not been alone in voicing frustration over how the mainstream media rarely, if ever, provides accurate coverage about immigration-related issues.  Today we will focus on an example of solid journalism.

On July 31, 2017, CBS News posted an important and hard-hitting investigative news report titled, “Made in America: How the U.S. Auto Industry Was Built with Foreign Labor.” A YouTube video of the report was aired by CBS News under the title, “Foreign workers being used to build auto plants in the U.S.”  It is a video that I urge you to watch.

The CBS News report caught the attention of Paul Mitchell, a member of the House Committee on Oversight and Government Reform, who, on May 16, 2018, issued a press release to announce a roundtable discussion into visa fraud that was predicated on the CBS News report.

Immigration fraud was identified, by the 9/11 Commission as the key entry and embedding tactic for terrorists who sought to carry out deadly terror attacks in the United States.  This concern served as the prediction for my recently published booklet, “Immigration Fraud: Lies That Kill.”

Immigration fraud not only costs lives but American livelihoods.

This is the brief press release:

“It’s important that we identify, examine, and fight the fraudulent use of visas by employers. Specific visas are designed for specific purposes, and when companies abuse or deceive the visa system, they hurt American workers and the American economy, as well as the foreign workers they hire under fraudulent pretenses. This morning’s roundtable was a good start to shining a light on visa fraud so the relevant government agencies can take effective steps to enforce our laws.”

Background

  • In July 2017, CBS News released an investigative report providing compelling evidence that certain foreign automobile manufacturers are hiring subcontractors who intentionally employ workers admitted under “B-1 in lieu of H-1B” visas to bypass foreign labor laws and increase company revenue. The report further alleges these workers were paid substantially less than American workers would have been paid performing the same jobs.
  • Today, Rep. Mitchell hosted the Departments of State, Labor and Homeland Security to learn more about what options are appropriate for hiring foreign workers, as well as what efforts are underway to identify, investigate and mitigate the fraudulent use of visas by foreign employers and employees. While the issue of securing the U.S./Mexican border against illegal (un-inspected) entry into the United States figures prominently in the news, nearly half of all illegal aliens did not run our borders thereby entering the U.S. without inspection, but were admitted into the United States and then, in one way or another, went on to violate the terms of their respective admissions as stipulated by the various visas they used to enter the United States.

The State Department provides a Directory of Visa Categories.

Nonimmigrant visa holders are admitted for a limited period of time, depending on the category of visa they used to enter the United States.  Many of these visas prohibit these aliens from being gainfully employed in the U.S.

Most politicians and pundits say that such illegal aliens, who violate their terms of admission, simply “overstayed” their authorized period of admission.

However, while nonimmigrant aliens who fail to depart from the United States before their temporary authorized period of admission expires are indeed illegally present and subject to removal, this violation by itself has little real-world consequence for America and Americans.

What is seldom discussed is that most such “status violators” violate other provisions of their lawful admission and this does profoundly impact our nation and our fellow Americans.  In point of fact, many of these illegal aliens also work illegally.  This not only displaces American and lawful immigrant workers and may result in wage suppression or even wage reduction, but also hammers the U.S. economy as these aliens wire tens of billions of dollars out of the U.S. economy to their home countries.

Often these illegal aliens sought visas and entry into the United States fully intent on violating our immigration laws from the outset, but concealed their ultimate goals from the Department of State consular officials who granted them their visas and the CBP (Customs and Border Protection) who interviewed them when they applied for admission.  False statements and the concealment of material facts, and/or the creation of false and misleading evidence in support of their lies to obtain visas and gain entry into the United States constitutes fraud, a serious crime.

Such was the case where these hundreds of European construction workers are concerned.

A partnership exists between the Department of State and the elements of the DHS (Department of Homeland Security) that enforce and administer the immigration laws.  The State Department is responsible for issuing visas to aliens and CBP inspectors have the authority to admit aliens into the United States and are guided by the provisions of Title 8, United States Code, Section 1182 which enumerates the categories of aliens who are to be excluded.

The CBS News report focused on the B-1/B-2 visa and a supposed hybrid visa known as the B-1 in lieu of H-1B visa.  I have come to refer to this hybrid visa as a Franken-visa because it is a monstrosity that has no legal underpinning and in my judgment, undermines the integrity of the visa process and suborns fraud and malfeasance, hurting American workers.

A B-2 visa generally permits the bearer to remain in the U.S. for up to six months.  The B-1 visa is a business visa that permits the alien to conduct business in the United States and attend training sessions and conferences, review corporate procedures in the United States and carry out other such functions.  However, they are not authorized to be gainfully employed in the United States.  Typically an alien entering the U.S. for business purposes is issued a B-1/B-2 visas so that after they complete the business that brought them to the U.S. they may spend some time as tourists.

The USCIS (United States Citizenship and Immigration Services) website provides an explanation of the B-1 Visa.

The State Department’s consular officers who issue visas, are supposed to be a part of the process to keep aliens, who are likely to violate the terms of their visas, from receiving those visas in the first place.  These consular officers are supposed to be on the “same page” as the CBP inspectors who make the decision at America’s ports of entry as to whether or not to admit those aliens.

Now it would appear that not only are consular officials not on the same page as CBP inspectors, but are apparently not even reading from the same play book. And once again, America and Americans are paying the price.

The number of controversial H-1B visas that are issued each year are limited by a CAP.  The B-1 in lieu of H-1B visas are not capped and these visas, unlike virtually all other visas are not based on an underlying law.  Visas categories are established by law, not a hunch or a desire to play favorites for those with political clout.

Representative Mitchell’s press release noted that the predication for that Congressional roundtable discussion was a CBS News investigative report that had been broadcast in July 2017 that disclosed how European automakers got huge tax breaks to build brand new factories to manufacture their cars in the U.S., but used European labor to construct those factories.

The European automakers hired agencies such as the German contractor Eisenmann which then outsourced the hiring process to other subcontractors who then gamed the visa process, thereby committing apparent visa fraud that brought thousands of Eastern European construction workers to the United States with B-1/B-2 visas.

These workers were paid approximately ten dollars per hour while it was estimated that American tradesman would command wages of between $45 and $50 per hour.

CBS News explained how these workers were hired:

When a carmaker like Mercedes wants to expand its plant, they hire a contractor, like the German corporation, Eisenmann, to build parts of it. Eisenmann then subcontracts smaller companies to build parts of the plant and some of those companies hire labor from Eastern Europe.

It is a common practice for a company to hire contractors and subcontractors to hire workers.

Here, however, it was shown how many of these foreign workers were coached by those contractors to lie to the consular officers who interviewed them when they applied for their visas and how to lie to the CBP inspectors at ports of entry.

At least one of the companies justified its hiring practices by noting how the B-1 in lieu of H-1B visas made what they did legal.  Of course this is not true, but nevertheless an in-depth investigation must be conducted to determine how and why this visa category was created in the first place.

Clearly ICE (Immigration and Customs Enforcement) needs many more agents to ramp up investigations of worksite immigration violations.  This would be consistent with President Trump’s plan to put Americans first.

Immigration law violations are not “victimless crimes.”

EDITORS NOTE: This column originally appeared in FrontPage Magazine.

Why Capitalism Is Morally Superior to Socialism

Several recent polls, plus the popularity of Sen. Bernie Sanders, I-Vt., demonstrate that young people prefer socialism to free market capitalism.

That, I believe, is a result of their ignorance and indoctrination during their school years, from kindergarten through college. For the most part, neither they nor many of their teachers and professors know what free market capitalism is.

Free market capitalism, wherein there is peaceful voluntary exchange, is morally superior to any other economic system. Why? Let’s start with my initial premise.

All of us own ourselves. I am my private property, and you are yours. Murder, rape, theft, and the initiation of violence are immoral because they violate self-ownership. Similarly, the forcible use of one person to serve the purposes of another person, for any reason, is immoral because it violates self-ownership.

Tragically, two-thirds to three-quarters of the federal budget can be described as Congress taking the rightful earnings of one American to give to another American—using one American to serve another. Such acts include farm subsidies, business bailouts, Social Security, Medicare, Medicaid, food stamps, welfare, and many other programs.

Free market capitalism is disfavored by many Americans—and threatened—not because of its failure but, ironically, because of its success. Free market capitalism in America has been so successful in eliminating the traditional problems of mankind—such as disease, pestilence, hunger, and gross poverty—that all other human problems appear both unbearable and inexcusable.

The desire by many Americans to eliminate these so-called unbearable and inexcusable problems has led to the call for socialism. That call includes equality of income, sex, and race balance; affordable housing and medical care; orderly markets; and many other socialistic ideas.

Let’s compare capitalism with socialism by answering the following questions: In which areas of our lives do we find the greatest satisfaction, and in which do we find the greatest dissatisfaction?

It turns out that we seldom find people upset with and in conflict with computer and clothing stores, supermarkets, and hardware stores. We do see people highly dissatisfied with and often in conflict with boards of education, motor vehicles departments, police, and city sanitation services.

What are the differences? For one, the motivation for the provision of services of computer and clothing stores, supermarkets, and hardware stores is profit. Also, if you’re dissatisfied with their services, you can instantaneously fire them by taking your business elsewhere.

It’s a different matter with public education, motor vehicles departments, police, and city sanitation services. They are not motivated by profit at all. Plus, if you’re dissatisfied with their service, it is costly and in many cases, even impossible to fire them.

A much larger and totally ignored question has to do with the brutality of socialism. In the 20th century, the one-party socialist states of the Union of Soviet Socialist Republics, Germany under the National Socialist German Workers’ Party, and the People’s Republic of China were responsible for the murder of 118 million citizens, mostly their own.

The tallies were: USSR, 62 million; Nazi Germany, 21 million; and People’s Republic of China, 35 million. No such record of brutality can be found in countries that tend toward free market capitalism.

Here’s an experiment for you. List countries according to whether they are closer to the free market capitalist or to the socialist/communist end of the economic spectrum. Then rank the countries according to per capita gross domestic product. Finally, rank the countries according to Freedom House’s “Freedom in the World” report.

You will find that people who live in countries closer to the free market capitalist end of the economic spectrum not only have far greater wealth than people who live in countries toward the socialistic/communist end but also enjoy far greater human rights protections.

As Thomas Sowell says, “Socialism sounds great. It has always sounded great. And it will probably always continue to sound great. It is only when you go beyond rhetoric, and start looking at hard facts, that socialism turns out to be a big disappointment, if not a disaster.”

COMMENTARY BY

Portrait of Walter E. Williams

Walter E. Williams is a columnist for The Daily Signal and a professor of economics at George Mason University. Twitter: .

RELATED ARTICLE: Who Was the Biggest Mass Murderer in History?

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

We are looking for a select few conservatives to become a Heritage Foundation member. With your membership, you’ll qualify for all associated benefits and you’ll help keep our nation great for future generations.

ACTIVATE YOUR MEMBERSHIP TODAY

3 Million People Have Found Jobs Since Trump Took Office

The good economic news just keeps rolling in.

On Friday, the Bureau of Labor Statistics released a positive May jobs report, announcing the U.S. economy added 223,000 jobs and the unemployment rate reached its lowest level since 2000, dipping to 3.8 percent.

While this report shatters expert predictions by nearly 30,000 jobs and continues to show signs of a strong economy, it also makes clear that as people continue to leave the workforce, employers will need to step up their game in order to attract workers to fill open positions.

The strong jobs report shows that a record number of Americans are employed, nearly 3 million people have found a job since President Donald Trump took office, and over the past 12 months we have averaged 191,000 new jobs per month.

In addition to this, African-American unemployment has fallen dramatically from 7.8 percent when Trump took office to 6.6 percent in April, and now to 5.9 percent. This represents a record low.

In addition, Hispanics continue to experience near historic lows in unemployment, reaching 4.9 percent. The unemployment rate for women, now at 3.6 percent, is also at its lowest point in decades.

This brings the unemployment rate down 0.5 percent over the last year, unemployment down by 772,000, and long-term unemployment down by half a million.

The top gains in the report are in retail trade (+31,000 jobs), health care (+29,000 jobs), construction (+25,000 jobs), manufacturing (+18,000 jobs), and mining (+6,000 jobs).

A year and a half into his presidency, Trump continues to add jobs to key sectors he targeted during his campaign. Since he was elected, the U.S. has added 322,000 manufacturing jobs and has reversed the trend of losing mining jobs, adding 91,000 jobs since November of 2016.

On a more troubling note, the labor force participation rate (the number of people who could be working, but choose not to) ticked down a 10th of a percentage point to 62.7 percent. This shows that the labor market is tightening. In fact, the number of people counted not in the labor force reached a record high of nearly 96 million people.

With more and more staying out of the workforce, employers have been steadily raising employee pay. In May, average hourly earnings for all private-sector employees rose by 8 cents, totaling a 71-cent increase over the year. This is the largest 12-month increase since 2009.

What does this mean? To fill open jobs and continue growing the economy, employers need to make work more appealing. How? Pay more and offer more.

One example of this can be seen in Walmart’s recent decision to increase pay, add maternity and paternal leave benefits, and introduce a college tuition program. To attract and keep talent, companies like Walmart will have to offer better and better deals to workers.

Those better deals are made all the more feasible when the government implements pro-growth policies, like the recent tax reform and regulatory reductions. Businesses now have more money and flexibility to be creative in how they attract and maintain their workers.

To date, over 4 million Americans have received a pay raise and/or a bonus because of tax reform. This is not just employers being altruistic, it’s a market-driven response to a need to attract and maintain workers—enabled by the government taking less money away from businesses.

One thing is certain: When businesses have more, they can and will do more. While there are some challenging aspects to the latest jobs report, the overarching theme shows that pro-growth policies are giving employers the flexibility they need to innovate and solve problems.

Let’s keep the momentum going.

COMMENTARY BY

Portrait of Timothy Doescher

Timothy Doescher is associate director of coalition relations at The Heritage Foundation’s Institute for Economic Freedom.

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

We are looking for a select few conservatives to become a Heritage Foundation member. With your membership, you’ll qualify for all associated benefits and you’ll help keep our nation great for future generations.

ACTIVATE YOUR MEMBERSHIP TODAY

Starbucks on Shaky Grounds with Planned Parenthood

Your tax dollars aren’t the only thing supporting Planned Parenthood — proceeds from your daily coffee may be too! By now, Starbucks’s grande agenda on social issues isn’t a surprise to anyone, except maybe its CEO. Yesterday, in an interview with Fox Business host Maria Bartiromo, Kevin Johnson seemed completely oblivious to Starbucks’s ongoing relationship with the abortion giant through its matching gift program.

For Johnson, it’s been a rocky few months at the head of one of America’s biggest brands. After an embarrassing scandal in Philadelphia, when a local employee had two African Americans arrested for sitting in their shop, the damage control was in full swing. Starbucks announced it was closing its 8,000 stores to have a “racial-bias education day” for its army of employees. But, our friend Alveda King says the company will have to do a lot more than that to end Starbucks’s bigotry. In an op-ed that’s gone viral, the niece of Martin Luther King, Jr. insists racism has been part of the company’s corporate identity long before the PR nightmare in April. She writes,

“Through its corporate donations, Starbucks contributes one of the most racist organizations in our nation’s history. Planned Parenthood, the largest single provider of abortions in the U.S., performs more than 300,000 terminations each year. Planned Parenthood operates the nation’s largest chain of abortion facilities, and almost 80 percent of its facilities are located in minority neighborhoods. About 13 percent of American women are black, but they have more than 35 percent of the abortions.”

Of course, conservatives have known about Starbucks’s ultra-liberal ties dating back to 2012, when then-CEO Howard Schultz told shareholders that redefining marriage really is “core to the Starbucks brand.” The company went on to sign a string of legal briefs for same-sex marriage, arguing at one point that customers who didn’t like it could take their business elsewhere. Some did. Others broke their Starbucks habit two years ago when 2nd Vote released a list of more than three dozen companies who’ve been contributing to Planned Parenthood — either directly or through an employee matching gift program. Apart from the more than half-billion dollar haul from U.S. taxpayers, the group was raking in some hefty financial support from household names like Johnson & Johnson, Levi Strauss, Microsoft, Nike, Pepsi, Tostitos, and more.

After intense public pressure, at least five of those brands dropped their partnership: AT&T, Coca-Cola, Ford, Macy’s, and Xerox. Starbucks, one of the most politically liberal companies on the market, refused — a fact obviously lost on CEO Kevin Johnson. Three times on Tuesday, he denied any knowledge of the program in his interview with Fox News’s Maria Bartiromo.

Bartiromo: “I don’t know if you saw Martin Luther King Jr.’s niece op-ed in the Washington Examiner. And she said, ‘If Starbucks wants to end racism it will stop funding Planned Parenthood.’ Are you going to stop funding Planned Parenthood?”

Johnson: “Well I am not aware that we, we do fund Planned Parenthood. So. I haven’t read the op-ed and I can’t comment on that.”

Bartiromo: “OK.”

Johnson: “But, I am not aware that we do that.”

Bartiromo: “Well, Alveda King says [so]…

Johnson: “Well, I am not aware of it.”

A few hours later, Starbucks corporate office released a statement admitting that there was, in fact, a link. “Starbucks is listed as a donor of an organization because the Starbucks ‘Partner Match’ program provides matched cash awards for contributions made by Starbucks partners (employees). Every fiscal year, funds are available to each partner to request in support of personal financial donations or individual community service efforts.”

Whether Johnson knew or not is irrelevant. What is relevant is what he does with the information now. Planned Parenthood is an organization under federal investigation by the FBI. If Starbucks wants to continue lining the organization’s pockets after the allegations that they traffic in baby body parts, that’s their choice. But know this: it won’t take long for Starbucks to lose bucks. Lining the pockets of the radical Left isn’t good for business. Just ask the NFLESPNTargetLands EndKellogg’sJ.C. Penney, and others.

If Starbucks cares about racial bias, prove it. “Stop funding Planned Parenthood’s house of horrors,” Alveda insists. “[I]f you’re really serious about eliminating racism, you will acknowledge that black people, and indeed all human beings, are of one blood and one human race — born and unborn. Racism and abortion are crimes against humanity.”

Give Kevin Johnson and team a helpful push. Call (800) 782-7282, email, or tweet them @Starbucks and ask them to stop sweetening the pot for America’s biggest abortion business.


Tony Perkins’ Washington Update is written with the aid of FRC senior writers.


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Why Democrats Aren’t Running Against “Evil” Tax Cuts

Back in December and January, Democrats and their fellow-travelers in the media were ebullient over the idea of running against the “tax cuts for the wealthiest 1 percent” tax reform package Congress had passed on a straight party-line vote, and President Trump subsequently signed into law.

It’s worth a quick and entertaining look back at the now commonplace hysterical response from the American Left (Democrat/Media/Culture/Education establishment), this time at basic tax cuts.

House Democratic leader, Nancy Pelosi, a constant well-spring of poppycock, called the legislation “the end of the world” and “the worst bill in the history of the United States Congress.” (Ahem…Fugitive Slave Act?) She predicted the tax cut would create “a permanent plutocracy in our country that does violence to the vision of our Founders.” California Gov. Jerry Brown called tax cuts “evil in the extreme.”

The Washington Post felt compelled to run a column predicting the Great Depression II, including unemployment at 25 percent. Former Treasury Secretary Larry Summers said the bill’s health provisions would kill 10,000 people annually. And economic historian Bruce Bartlett said that tax cuts are “akin to rape.”

Veteran Atlantic political reporter Ron Brownstein argued that “President Trump and congressional Republicans have just taken the same leap of faith that Democrats did when they passed the Affordable Care Act.” The Huffington Post anxiously ran a story headlined “ObamaCare Plagued Democrats In 2010. The GOP Just Voted For A Bill Even Less Popular.”

And what’s a media nonsense roundup without Paul Krugman, who wrote a column, “Republicans’ Tax Lies Show the Rot Spreads Wide and Runs Deep.”

Well, something was running wide and deep.

But now that the big blue wave midterms are approaching, Democrats actually are not running against the end of the world, against 25 percent unemployment, against rot, against evil. You’d think those would be winning issues with the American people. Perhaps the end-of-the-world bombast was just empty drivel like so much that has been upchucked into the media since November 2016.

Remember how Republicans ran loud and hard (and for some, lied) about repealing Obamacare as soon as they had the chance. It was proving unpopular and hitting Americans negatively. We are seeing an almost complete absence of that now in both Democratic primaries, and where the general elections are set, in regards to the tax reform package that was the end of the world.

It’s not just by observation we are seeing this step away from tax cut repeal. Democratic leadership is admitting it. Washington Post political reporter David Weigel asked Democratic leaders about it at their recent strategy retreat, and tweeted their response:

“Asked Dems at retreat presser if they’ll run in 2018 on repealing the Tax Cuts and Jobs Act. Answer: Not really. (They’ll “restore balance.”) Weigel tweeted the full text of his questions and their answers. By balance, they presumably and without elucidation, mean balancing the budget, which they did such a bangup job of doing when they were in control.

Why the big flip for Democrats? It’s more than the dawning realization that the slogan, “Vote for me and I’ll raise your taxes!” is probably not going to resonate with voters.

 First, there are the actual facts involved with the tax reform package. The politically liberal Tax Policy Center ran the numbers and figured the tax cuts would benefit 80 percent of American families, while raising taxes for just 5 percent. Those tax hikes would fall disproportionately on the wealthiest 1 percent. The average family would save $1,610.

More facts. The Congressional Budget Office has sharply increased its forecast for GDP growth in 2018 from 2 percent to robust 3.3 percent as a direct result of the tax cuts. The CBO predicts GDP growth next year at 2.4%, up from the expected 1.5% before the tax cuts. Further, the CBO says that this level of growth in the economy could eliminate most of the so-called tax-cut deficit that Democrats are suddenly so concerned about. Unfortunately but to no one’s shock, the media largely ignored that report.

 Second, the tax cut package still remains popular. The “Republican” or “GOP” tax cuts, not so much. Recent polls showing a decline in support for the GOP tax cuts have elated Democrats and the media. But they’re quite misleading. The tax cuts themselves, broken down by almost every element within the bill, are overwhelmingly popular.

Investors Business Daily broke those down here. Americans’ support is absurdly high for most elements of the tax cuts. But most polls label the tax cuts as Republican or GOP, and when that happens, the support drops significantly.

A couple of things are at work here. One is the ongoing demonization of Republicans in the media. This has been a long-running train. The other is the conflation of budget deficit with the tax cuts. This of course has two elements, one of which is continued runaway spending, which congressional Republicans caved on like they always do. (Remember, they are caving to Democrats who actively pursue the runaway spending.) Saying that the taxes alone caused the projected $1.5 trillion deficit — over 10 years, because that is the only way to make it look bad — ignores half of the equation but clearly can influence news consumers.

 Third, an April Gallup Poll found that Americans think the tax code is more fair today than it was before the GOP tax cuts took effect. Last year, 51 percent of Americans said middle income families pay too much income taxes. That is now down to 42%. And amazingly, given the media coverage, 26 percent say upper-income families pay their fair share, up slightly from 24 percent last year. And the big corporate fat cat giveaway? Well, 24 percent now say that corporations pay their fair share, up sharply from 19% a year ago when corporate tax rates were much higher.

It’s hard to run on a lie when the truth keeps showing up in bi-weekly dollars in the wallet, when you can see how strong the economy around you is. High GDP growth is tangible, just like anemic GDP growth was under Obama.

Americans realize that the tax reform package was a net positive for their pocketbooks, for the economy, for jobs and for the deficit — the absolute opposite of how they rightly viewed Obamacare. That Democrats aren’t clawing to run against it means they still have a modicum of political sense left.

EDITORS NOTE: This column originally appeared on The Revolutionary Act. Please subscribe to our Revolutionary YouTube.

States Have Power Over Sports Gambling, Not Over Illegals

By KrisAnne Hall, JD

To assert that sports gambling and immigration and naturalization are the same undermines the authority of the Constitution itself, and has the potential to create the very crisis the creators of the Constitution were attempting to avoid.

The U.S Supreme Court recently rendered an opinion in the case Murphy v. NCAA regarding the State’s ability to legalize sports gambling. The majority Court opined that the 10th Amendment made the Professional and Amateur Sports Protection Act (PASPA) unconstitutional, thereby taking the stance that the States were not only not bound by this federal law, but that the States could indeed, pass legislation to legalize sports gambling within their State. (To better understand this particular opinion, please read this explanation.)

There are many, from judges to media pundits, who now profess that this opinion regarding States’ power and sports gambling will also set a precedent to justify several States’ actions to ignore federal laws regarding immigration and naturalization. I would not even be surprised if some federal judges attempted to use this argument to render certain federal laws regarding naturalization void.

However, this is not the conclusion that can be drawn if we are to follow the Constitution and the terms of this contract that binds the States into the American union.

  1. The Controlling Law is the Constitution, Not Precedent

The controlling law in this matter, first and foremost, is not precedent set by a judge or court, but the Constitution itself. We know through Article 6 Clause 2 of the Constitution (the Supremacy Clause) that the Constitution is the Supreme Law of the Land. We also know from this clause that only the laws made by Congress that are within compliance with the Constitution are the Supreme Law of the Land. Several drafters of this Constitution spoke on this matter making the conditional nature of federal laws even more clear.

“…the power of the Constitution predominates. Anything, therefore, that shall be enacted by Congress contrary thereto, will not have the force of law.” James Wilson, 1787 Ratification Debates

“No legislative act, therefore, contrary to the Constitution, can be valid.”  Alexander Hamilton, Federalist #78

The Supremacy Clause itself declares that laws made by Congress that are inconsistent with the powers specifically enumerated to the federal government are not binding upon the States.  Within the Bill of Rights is the 10th Amendment, which serves as further clarification of this separation of powers between the States and the federal government.

“The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” 10th Amendment (emphasis mine)

  1.  Delegation of Powers Makes the Legal Distinction

It is within the distinct separation of powers between the States and federal government that the Constitutional difference exists between States legislating sports gambling and States denying the Uniformed Rules of Naturalization. Simply put, the power to establish Uniform Rule of Naturalization is a power delegated to the federal government through the States’ Constitutional compact; the power to make laws regarding gambling is not. (NOTE: The assertion that the federal government is empowered to regulate gambling through the “commerce clause” is an errant expansion of federal power through judicial “interpretation” that was not intended by the drafters.)

The authority to make the Uniform Rule of Naturalization was expressly delegated to Congress through Article 1 section 8 clause 4 of the Constitution:

“To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;”

It could not be clearer. The purpose of this power being delegated was to correct serious problems that had arisen through the Articles of Confederation due to “the dissimilarity in the rules of naturalization” that James Madison identifies in Federalist #42 as “a fault in our system.” Madison appropriately defines “naturalization” as the classification that bestows upon an alien “all privileges and immunities of free citizens.”

In the previous Constitution, the definitions of citizenship were left to the independent States creating not only confusion amongst the States, but as Madison asserts, a potential for “embarrassment” and “chaos.” When the States established their own standard of naturalization, creating different standards across the Union, an alien could enjoy the benefits of citizenship in one State but not others. So an alien who enjoys the benefits of citizenship in one State could bring the legal claim to demand the benefits of citizenship in other States who have different standards.

Madison said this claim would establish that “the law of one State be preposterously rendered paramount to the law of another, within the jurisdiction of another.” Those who ratified the Constitution considered this to be a problem too serious to not be provided against. Therefore, the power to establish a Uniform Rule of Naturalization was established; to ensure a single standard from State to State for aliens to become citizens and enjoy the benefits of citizenship.

  1. States of the Union Must Recognize the Authority of the Constitution

Every State that enters the Union under this Constitution, must agree that this power is delegated to the federal government and must admit they do not have the authority to alter those standards. If they do so, they are violating the terms of the Constitution they agreed to when entering the Union and are breaking their fiduciary duty to the other States.

The federal exercise of the power over the standards for naturalization is consistent with the Constitution, by the terms of the Constitution, and the States are bound by it. Any alteration of this standard is not only contrary to the intent of the Constitution, but also contrary to the very language itself. Cities and States who are allowing aliens to vote, to hold government office or to participate in tax payer benefits and welfare are violating the terms of the Constitution and their duty to the other States.

  1. Gambling and Naturalization are not Constitutionally the Same

The Supreme Court was correct in its opinion to say that PASPA does not control the States.  However, to claim Murphy v. NCAA creates a precedent that will allow States to create their own standards for applying the benefits of citizenship to aliens is errant and dangerous. If the courts suggest that a State can create its own standard for citizenship, then what will prevent a State from refusing citizenship status to people based upon their religion, skin color, or political ideology, and then subsequently demanding that standard upon other States?

Finally, as Madison explains in Federalist #42, “If we are to be one nation in any respect, it clearly ought to be in respect to other nations.” The entire purpose behind the States creating the federal government is to be a representative on behalf of the States in foreign affairs. The manner in which an alien becomes a citizen is just as much a foreign affair as a domestic one.  To have uniformity in that manner not only makes for better foreign relations, but will also, as Madison again explains, foster “the harmony and proper intercourse among the States.”

For the State to create laws contrary to the Constitution is quite different from a State creating laws when the power has been reserved to the States. That distinction is what the 10th Amendment is all about. Gambling is a power reserved to the States; Naturalization is a power delegated to the federal government. To assert that the two are the same, undermines the authority of the Constitution itself and has the potential to create the very crisis the creators of the Constitution were attempting to avoid.

ABOUT KRISANNE HALL

KrisAnne Hall is a former biochemist, Russian linguist for the US Army, and former prosecutor for the State of Florida. KrisAnne also practiced First Amendment Law for a prominent Florida non-profit Law firm. KrisAnne now travels the country teaching the foundational principles of Liberty and our Constitutional Republic. KrisAnne is the author of 6 books on the Constitution and Bill of Rights, she also has an internationally popular radio and television show and her books and classes have been featured on C-SPAN TV. KrisAnne can be found at www.KrisAnneHall.com.

RELATED ARTICLE: ‘Amnesty First’ Breaks Faith With the American People

EDITORS NOTE: This column originally appeared in The Revolutionary Act.

The Left’s War Against Prosperity in Seattle

The left is sleepless in Seattle, working overtime to squander years of economic success.

Seattle is, by many measures, one of the fastest-growing cities in America, if not the fast-growing city.

A few big tech companies, including Amazon and Microsoft, plus other large, successful businesses such as Boeing and Starbucks, have fueled this explosive rise.

But prosperity hasn’t necessarily bred contentment, as the traditionally left-wing city turned on the elements that made it rich.

In the latest move to soak the productive part of the city’s economy, the Seattle City Council voted 9-0 to approve a new “head tax” imposing a $275-per-worker charge on companies making over $20 million a year.

According to The Seattle Times, advocates of the tax said it “will have a meaningful impact on addressing our homelessness crisis by building housing and providing health services.”

Companies such as Amazon and Starbucks, which generally have had no problem kowtowing to the demands of social justice warriors, lashed out when their bottom line was threatened.

Amazon announced that it would continue to build in the city despite a previous halt in construction.

Amazon said in a statement: “While we have resumed construction … we remain very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.”

This may seem like a reasonable measure by a company that expects a financial shakedown, but activist groups weren’t about to let these corporate cash cows take their business elsewhere.

The labor group Working Washington called for criminal prosecution of businesses that threaten to leave the city. They argued that this constituted an illegal threat against public officials, a felony.

As libertarian law professor Eugene Volokh noted, such an expansive view of the law would also criminalize activities such as union strikes and boycotts.

This method of intimidating businesses into accepting predatory government action may not have been well considered, but it does reveal the impulses of the hard left.

If you aren’t willing to accept the left’s measures willingly, you will be forced to accept them through punitive government action. There will be no escape.

This is hardly the first Seattle policy to take aim at businesses.

In 2015, Seattle increased its minimum wage to $15 an hour, which, according to one study, decreased employment and hurt low-income workers.

In 2017, the City Council voted unanimously to stop using Wells Fargo & Co. bank due to its investments in the Dakota Access Pipeline and a fraud scandal.

Kshama Sawant is an American democratic socialist politician and economist, a member of Socialist Alternative who sits on the Seattle City Council.

“Take our government back from the billionaires, back from [President Donald] Trump and from the oil companies,” Councilmember Kshama Sawant, who is openly socialist, said at the time of the vote, according to The Seattle Times.

Sawant, also a strong backer of the head tax, hasn’t just received opposition from “billionaires.”

At a recent press conference she hosted in Seattle, a group of construction workers showed up and began chanting, “No head tax! No head tax!”

Ditching Wells Fargo likely would have cost the taxpayers a significant amount of money, but they were saved by the fact that no other bank would take the city’s business.

Hilariously, Seattle had to go crawling back to Wells Fargo.

It apparently was a surprise to Seattle’s government officials that companies don’t like to be shaken down.

Instead of finding ways to drive down the cost of living, cities such as Seattle and San Francisco have embraced policies that continue to drive up costs.

Their solution is what The Seattle Times called an “eat the rich” strategy.

That is, simply tax the productive businesses and citizens as much as possible and use this to subsidize the poor.

Despite the fact that Seattle’s tax revenues have shot up dramatically in this boom, it isn’t enough to pay for the ever-expanding list of demands from the city’s ascendant hard-left activists.

There will never be enough to satisfy those who believe they can remake the world as a perfectly equal and fair place through the levers of government.

It’s hard to believe that a tax on jobs is going to solve Seattle’s homelessness problem, which has actually skyrocketed in the past 10 years despite higher levels of revenue and spending by the city.

This has occurred while homelessness around the state of Washington generally has gone down.

The reasons for the surge in Seattle homelessness are many. Some argue that the presence of the rich simply increased the ranks of the poor as everything naturally becomes more expensive. But this misses the fact that government policies, such as extremely restrictive building codes and low-growth housing plans, have forced prices upward.

According to a Heritage Foundation study on poverty:

Policies that drive up housing prices—and there are many—have a disproportionate impact on low-income households. Based on 2015 data from the Bureau of Labor Statistics, the lowest-income households spent 58.2 percent of their income on housing, compared to 25.8 percent for the highest-income households.

Instead of addressing the squeezing out of the middle class and the underlying costs of life in the city, though, Seattle’s leaders focus on meliorating the circumstances of the poor and homeless.

Creating another expensive program, if that’s even what this tax is really about—City Journal’s Steven Malanga speculates that it’s actually an excuse to bail out the city’s strained public pension system—won’t solve the underlying problems.

The more the planners plan, the more the plans fail. When the newest scheme doesn’t produce the desired utopia, they will again blame the “rich” and take a little more.

The planners will turn to increasingly punitive schemes to remake the world as they see fit.

They will strangle and kill the goose that laid the golden egg and end up with nothing but misery and dysfunction.

Beautiful and desirable places such as Seattle and San Francisco can withstand a certain amount of dysfunction before people bail on those cities.

Such cities may very soon be testing those limits, as big companies and productive citizens look to greener pastures and local governments that don’t use them as an ATM for their failed schemes.

The amount per employee the new head tax imposes has been corrected in this article. 

COMMENTARY BY

Portrait of Jarrett Stepman

Jarrett Stepman is an editor and commentary writer for The Daily Signal and co-host of “The Right Side of History” podcast.Send an email to Jarrett. Twitter: .

RELATED ARTICLE: Seattle Hiked Its Minimum Wage. Here’s How It’s Impacting Low-Income Workers.

Dear Readers:

With the recent conservative victories related to tax cuts, the Supreme Court, and other major issues, it is easy to become complacent.

However, the liberal Left is not backing down. They are rallying supporters to advance their agenda, moving this nation further from the vision of our founding fathers.

If we are to continue to bring this nation back to our founding principles of limited government and fiscal conservatism, we need to come together as a group of likeminded conservatives.

This is the mission of The Heritage Foundation. We want to continue to develop and present conservative solutions to the nation’s toughest problems. And we cannot do this alone.

We are looking for a select few conservatives to become a Heritage Foundation member. With your membership, you’ll qualify for all associated benefits and you’ll help keep our nation great for future generations.

ACTIVATE YOUR MEMBERSHIP TODAY

EDITORS NOTE: The featured image is of Seattle City Councilmember Kshama Sawant speaking at a protest demanding that the city tax large corporations to help fight homelessness. (Photo: Lindsey Wasson/Reuters /Newscom)

INFOGRAPHIC: A Revolutionary Way to Get Funded — ICO Roundups

Initial coin offerings, or ICOs for short, are the latest craze in the cryptocurrency world. Despite being just a couple of years old, ICOs have managed to attract a lot of attention. It seems that in the past few months every news outlet had something to say about them, both good and bad. Some praise them for enabling startups to receive funds quickly, but some people despise ICOs because of their unregulated and fraudulent nature. However, one thing is for sure; they have revolutionized how projects receive funding.

While no one can argue that ICOs are flawless, a case can be made that they offer more pros than cons. Sure, ICOs have little, if any, regulatory oversight, and their track record is riddled with thefts, frauds, and failures. However, without them, we wouldn’t have Ethereum, the second biggest cryptocurrency right now, as well as numerous other new-technology startups. Judging ICOs based on the failed projects and without acknowledging their advantages creates a false image. After all, even some traditionally funded projects have turned out to be frauds.

Therefore, to avoid any future confusion, we at BTXchange.io have created this ICO round-up infographic. You can find information about the good and the bad side of this revolutionary way to get funded. Enjoy.