Trump Celebrates 6 Months of ‘New Jobs, Bigger Paychecks, and Keeping More of Your Hard-Earned Money’

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President Donald Trump called the Tax Cuts and Jobs Act an “economic miracle” as he marked the reform package’s six-month anniversary during a White House event Friday.

“At last, our country finally has a tax system that is pro-job, pro-worker, pro-family, and pro-American,” Trump said.

The $1.5 trillion tax reform law cut the U.S. corporate tax rate from 35 percent, the highest in the world, to 21 percent, in line with other developed nations. It also lowered the top individual rate from 39.6 percent to 37 percent, eliminated brackets, and closed loopholes.

“It’s my great honor to welcome you back to the White House to celebrate six months of new jobs, bigger paychecks, and keeping more of your hard-earned money where it belongs: in your pocket or wherever else you want to spend it,” Trump said.

During his remarks, Trump recognized Heritage Foundation President Kay Coles James and others in the audience for helping push what so far has been his signature legislative achievement through Congress in late 2017.

Trump pointed out not a single Democrat voted for the reform. He also said deregulation might have had as much to do with growing the economy $7 trillion.

“The typical family of four earning $75,000 will see an income tax cut of more than $2,000, and in some cases much more, slashing their tax bill in half,” Trump said. “We cut taxes for businesses of all sizes to make this the best place on earth to start a business, to invest. We have billions and billions of additional revenue coming in.”

Trump asserted more than 100 utility companies cut prices as a result of the tax cut, “saving Americans $3 billion on their utility bills.”

Trump again noted unemployment claims are at a more than four-decade low, and again cited historic low unemployment rates for blacks and Hispanics, a frequent theme in his speeches.

He added women are about to join that historic category.

“Unemployment for women, if you listened to my speech two weeks ago, you would have heard me say it’s the lowest in 21 years,” Trump said. “Now I’m saying it’s the lowest in 65 years and soon will be the lowest in history.”

The economy appears to be doing very well, said Adam Michel, tax policy analyst with The Heritage Foundation, noting some of the same employment numbers as the president.

“Even more impressive is that in the first quarter of 2018, investment—the bedrock of economic growth—increased by more than 21 percent among companies in the Standard & Poor’s 500 stock index, compared with the same quarter in 2017,” Michel told The Daily Signal. “The good economic news only accounts for some small part of tax reform’s benefits, there is much more to come as businesses and individuals start to realize how the new law allows them to expand, hire, and invest even more.”

Trump also framed these changes as part of his larger reform agenda.

“Commonsense is being restored in Washington once again because hardworking Americans are in charge of their government once again. Washington tried to change us,” Trump said. “That’s not going to happen. Instead, we’re changing Washington and we are changing it quickly and for the better.”

COLUMN BY

Portrait of Fred Lucas

Fred Lucas

Fred Lucas is the White House correspondent for The Daily Signal and co-host of “The Right Side of History” podcast. Send an email to Fred. Twitter: @FredLucasWH.

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 Toya Sarno Jordan/CNP/Newscom.

IMMIGRATION FRAUD: ICE investigation uncovers company that defrauded Americans out of jobs.

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Immigration fraud has been identified as a key method of entry and embedding for international terrorists, and fugitives from justice and for transnational gang members.  This was the underlying premise for my booklet, Immigration Fraud:  Lies That Kill.

However immigration fraud may also be committed by companies who seek to create the illusion of complying with our nation’s immigration laws while, in reality, discriminating against American workers by hiring foreign workers for whom they apply for temporary work visas such as the H-2B visa.

It is important to remember that prior to World War II the primary authority for the enforcement and administration of our nation’s immigration laws was primarily vested in the Labor Department to protect American workers from unfair competition from foreign workers.  This was of particular importance back then as America was attempting to dig out of the Great Depression.

Our immigration laws were enacted to protect national security, American lives and the livelihoods of Americans.

Nevertheless, wacky candidates for political office such as television actress Cynthia Nixon, who is seeking to unseat New York Governor’s Andrew Cuomo, has called for dismantling ICE (Immigration and Customs Enforcement) as reported in the June 22, 2018 New York Post article, Cynthia Nixon labels ICE a ‘terrorist organization’

On June 26, 2018 the Department of Justice issued a press release, Justice Department Settles Claims Against Landscaping Company for Discriminating Against U.S. Workers.

Here is how the DOJ press release begins:

The Justice Department today reached a settlement agreement with Triple H Services LLC, (Triple H), a landscaping company based in Newland, North Carolina, that conducts business in Virginia and four other states. The agreement resolves the Department’s investigation into whether Triple H discriminated against qualified and available U.S. workers based on their citizenship status by preferring to hire temporary workers with H-2B visas, in violation of the Immigration and Nationality Act (INA).

The Department’s investigation found that although Triple H went through the motions of advertising over 450 landscape laborer vacancies in five states, it did so in a manner that misled U.S. workers about the available positions and prevented or deterred some from applying. The Department found that Triple H did not consider several qualified U.S. workers who applied for positions in Virginia during the recruitment period, and instead hired H-2B visa workers. In several states where jobs were available, the Department found that Triple H prematurely closed the online job application process for U.S. worker applicants, filled positions with H-2B visa workers without first advertising the jobs to U.S. workers in the relevant locations, or advertised vacancies in a manner that did not make the postings visible to job seekers using state workforce agency online services.

The Department concluded that in taking these actions, Triple H effectively denied U.S. workers access to jobs based on its preference for hiring temporary H-2B visa workers to fill the positions. Refusing to consider or hire qualified and available U.S. workers based on their citizenship status violates the INA’s anti-discrimination provision, regardless of whether an employer has complied with other rules governing the use of temporary employment-based visa programs.

A common claim made by anti-American globalists is that the “immigrants do the work Americans won’t do” while blithely ignoring that Americans will do any job, for a reasonable wage under lawful conditions.

On a personal note, my dad was a tradesman/construction worker, a plumber who worked with his buddies in the construction trades on all sorts of job sites building houses and office buildings.  He worked on the 1964 New York World’s Fair and on John F. Kennedy International Airport.

For my dad and his co-workers, the word “impossible” did not exist.  For them that word simply represented a challenge because they did not believe that any job was too filthy, dangerous or back-breaking to do.

Today millions of hard-working Americans of every race, religion and ethnicity continue to trudge off to their jobs the are fundamental to our nation, happy to earn that all-important paycheck.

Unscrupulous employers, however, seek to slash their costs by hiring and exploiting foreign workers who are often less qualified than their American counterparts but are willing to work for substandard wages under substandard conditions.

While globalists frequently attempt to play the “compassion card” there is nothing compassionate about exploiting foreign workers or screwing American workers out of their jobs.

The Democratic Party that used to represent American blue collar workers have sold them out by advocating for the flooding of America with huge numbers of foreign workers.  Often American and lawful immigrants pay for this betrayal with their jobs and their ability to support themselves and their families.  All too often this results in these American and lawful immigrants becoming homeless.

Homelessness has soared to record levels, often engendering the separation of children from their parents.  Ironically while the Democrats vociferously wailed about the administration prosecuting illegal aliens who are caught entering the United States covertly, without inspection and hence separating the children from their parents, these same politicians completely ignore the way that American kids have been taken from their homeless parents.

The investigation into the discriminatory hiring practices of Triple H Services addressed in the DOJ press release uncovered apparent fraud.

Undoubtedly there are many, many other companies operating throughout the United States who defraud various elements of the immigration system to displace American workers to drive down wages and, perhaps, force their workers to work under illegally dangerous conditions.

All that continues to protect them from discovery is the abject lack of ICE (Immigration and Customs Enforcement) agents.

As I noted in my previous article, neither of the bills proposed by House Speaker Ryan or House Judiciary Committee Chairman Bob Goodlatte include the funds to hire a single additional ICE agent, although the Goodlatte Bill would increase staffing at CBP (Customs and Border Protection) by 10,000 employees, with half going for the hiring of additional Border Patrol agents.

However, help is on the way.

On June 26, 2018 ICE posted a press release that simply reads, ICE is Hiring.

As we have seen with ramping up enforcement along the U.S./Mexican border, by the stated policy of “Zero Tolerance” for illegal entry of aliens, focusing all efforts on that dangerous and problematic border will not, ultimately succeed.

In November 2001, just weeks after the attacks of September 11 I testified at a hearing before the Congressional Immigration Reform Caucus chaired by Congressman Tom Tancredo to explore how the immigration system had failed to abysmally as to permit our nation to suffer the worst terror attack in the history of our nation.

In my prepared testimony I raised the issue of the need to think of the immigration enforcement program as resting on the three legs of what I described as the “Immigration Enforcement Tripod.”  In my concept the Border Patrol enforces our immigration laws from between ports of entry, the Inspectors enforce the immigration laws at ports of entry and the special agents of the INS (today ICE) enforce our immigration laws from within the interior of the United States.

Traditionally, that third leg representing the enforcement of our immigration laws from within the interior of the United States has always been much shorter than the other legs.  Consequently aliens came to expect that if they can, by whatever means possible, enter the United States, they will have little to fear if they violate our immigration laws, commit crimes or attempt to defraud the immigration system to acquire lawful status by committing immigration fraud.

Similarly, employers who hire illegal aliens or engage in fraud to discriminate against American workers also have virtually nothing to fear.

Of course, the abomination of Sanctuary Cities exacerbate this problem in apparent violation of Title 8 U.S. Code § 1324 which deems the aiding, abetting, inducing, harboring and shielding illegal aliens from detention to be felonies when done by individuals or organizations.

While a border wall would help to secure that dangerous U.S./Mexican border, without meaningful interior enforcement of our immigration laws, aliens will continue to find ways of entering the United States, spurred on by Sanctuary Cities and Sanctuary States and a lack of assets for the enforcement of our immigration laws from within the interior of the United States.

Once again the Trump administration is acting to close the loopholes and thus protect national security, public safety and the livelihoods of American and lawful immigrant workers.

Only fools could argue with those vital goals.

RELATED ARTICLE: Nine months in to fiscal year, Trump could break record low number of refugees admitted to US

EDITORS NOTE: This column originally appeared in FrontPage Magazine.

It’s Time to Privatize the United States Postal Service

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Brittany Hunter “The country would be wise to let the market take a shot at cleaning up government waste.” – Brittany Hunter”

Last week, the Trump administration unveiled a proposal to privatize the United States Postal Service (USPS). The plan comes as part of a broader initiative to trim and reorganize the federal government. And given its track record of waste and inefficiency, the USPS is a great place to start cutting the fat.

“USPS’s current model is unsustainable. Major changes are needed in how the Postal Service is financed and the level of service Americans should expect from their universal service operator,” the White House’s new proposal reads. The plan goes on to say that the administration plans to “fix” the post office before beginning the process of privatization. “USPS privatization through an initial public offering (IPO) or sale to another entity would require the implementation of significant reforms prior to sale to show a possible path to profitability.”

In terms of “fixing” the post office before taking it out of the hands of the government, the Trump administration has proposed reassessing the USPS’s ties with labor unions. This would give the new owners of the post office more freedom to set wages and provide benefits that are economically realistic.

The document reads:

“Freeing USPS to more fully negotiate pay and benefits rather than prescribing participation in costly federal personnel benefit programs, and allowing it to follow private sector practices in compensation and labor relations, could further reduce costs.”

As it stands today, much of the financial mess the USPS has found itself in is because of the exorbitant benefits programs that come with collective bargaining. In fact, as it stands today, the USPS still owes over $100 billion to its retiree health benefits fund.

It should come as no surprise that the National Association of Letter Carriers (NALC) have joined the likes of Bernie Sanders in opposing privatization. Commenting on the matter the NALC President Fredric Rolando said:

“NALC has long been committed to working with all of the stakeholders and not one has floated the idea of privatization except private shippers, who would love nothing more than to see the Postal Service dismantled. Now that we know that this administration and its Task Force will make recommendations on reforms to achieve OMB’s privatization goals, NALC will work tirelessly with other stakeholders and Congress to oppose this faulty privatization plan every step of the way to preserve this public institution, which is based in the Constitution.”

To be sure, when Rolando speaks of other “stakeholders” he is speaking about the other labor unions who have a vested interest in seeing this perpetual cycle of inefficiency continue, so long as they continue cashing checks. In fact, Mark Dimondstein, the president of the American Postal Workers Union echoed this sentiment, calling the privatization proposal “draconian” and predicting that it “would end regular mail and package services at an affordable cost.”

But as it stands currently, costs are hardly affordable. In addition to the billions of taxpayer dollars used to fund the post office, “consumers” also have to pay to use the USPS services, which essentially means that post office patrons are actually paying twice.

But all this just speaks to the larger point that the post office has been an incompetent disaster for far too long. It is about time some sort of action was taken.

The Post Office Is A Mess

No one looks to the post office as a beacon of government competence. Actually, no one looks to the post office for any sense of efficiency at all. And while the United States Postal Service has frequently found itself at the butt of many jokes, the truth of the matter is that its incompetence is costing the American taxpayers billions of dollars each year.

For the last 11 years in a row, the post office has experienced financial losses. In 2012, it was revealed that the USPS had experienced a net loss of $15.9 billion dollars. In 2013, this number decreased to a still enormous $4.8 billion, followed by $5.3 billion in 2014. As far as fiscal year 2018 is concerned, the Postal Service has already reported a $1.3 billion dollar loss. If any private company had experienced net losses to the tune of several billions of dollars, they would quickly find themselves out of business. But the post office is a beast of a different color.

As the USPS is a government protected monopoly, it does not have to respond to market demand. And since the taxpayers are on the hook for funding the USPS regardless of its performance, there are almost no consequences for its ineptitude. In fact, in many cases, it has been rewarded for its incompetence by having more money thrown in its direction.

It might be easier for Americans to look the other way and ignore all the wasteful spending if the post office actually held some sort of relevance in our daily lives. But in the digital age, there is really no justification for extorting money from taxpayers in order to pay for an outdated service that most people do not need. All correspondence can now be done through email and online shopping has completely replaced the need to send off for physical retail catalogs. Most bills are also already sent through email, with many companies even offering discounts for going “paperless.”

While congressional approval is needed before any manner of privatization can occur, it has been met with opposition by both members of Congress and labor unions. Unfortunately, the term “privatize” scares many, who fear what might happen if the post office is put in the hands of “greedy capitalists.”

Luckily for the critics, the post office serves almost no purpose in our digital age, making these concerns virtually unfounded. Not to mention, considering the USPS’s reputation for inefficiency and waste, it would take a great deal of effort for the private sector to do a worse job than the government has done.

Experiments in Privatization

Bernie Sanders recently expressed his concerns over Trump’s plans for the post office, saying:

“If the goal of the Postal Service is to make as much money as possible, tens of millions of people, particularly low-income people and people in rural areas, will see a decline in or doing away with basic mail services.”

But those who, like Sanders, are wary of putting the post office in the hands of the private sector might be surprised to learn that many European countries began privatizing their postal systems years ago. And it didn’t end in a disaster. For example, when Germany privatized the Deutsche Post in 1995, it helped saved the country’s mail system.

In the wake of the Cold War and the fall of the Berlin Wall, Germany was ready for change. Much like the USPS, prior to privatization, the Deutsche Post was slow and costly. Eager to get this wasteful agency out of the state budget, Germany decided to experiment with privatization. While the process was rather long, privatizing the German post and giving it control over its own operations allowed it to function like an actual business.

Now able to make decisions without the input of state authorities, Deutsche Post was able to implement policies that saved vast amounts of money. Instead of hiring new couriers to replace those who had retired, the German post opted to leave the positions vacant. They also centralized routes to save money where they could. Coincidentally, this plan to centralize routes is also part of the proposal by Trump administration.

The only law that the German government placed on the Deutsche Post was to mandate that letters were to be delivered to all areas of the country, meaning no one could be excluded.

Sure, this one stipulation did give the government a little control over the post, but it was far preferable to the previous situation. Since it was now privately controlled, Deutsche Post was still able to make the important budget decisions that ultimately led to its eventual success. In fact, the German privatization model was so successful, it now runs the DHL shipping company. And while the German model provides a beacon to look to abroad, even the United States has had its own experiment in privatizing the mail.

In 1844, Lysander Spooner was frustrated by the increasing costs of the USPS. Recognizing that as a government monopoly, the post office was exempt from having to actually care about its consumers’ needs, Spooner founded The American Letter Mail Company. Charging less and providing better services than the USPS, Spooner’s venture became a direct competitor to the almighty state.

However, while the American Letter Mail Company did end up having several locations in cities like Baltimore, Philadelphia, and New York, the USPS was not impressed. Angered by Spooner’s success, the government made threats to railroad companies who preferred Spooner’s services. When the state fought back, the Circuit Court actually began to doubt that the government had any authority to monopolize the mail. While the Constitution does give the government the power to run the Postal Service, it does not explicitly bar other companies from competing with state-run services. However, the state sought legislative action against Spooner, reinforcing its monopoly.

Commenting on the advantage private enterprise has over government-run  services, Spooner wrote:

“Universal experience attests that government establishments cannot keep pace with private enterprise in matters of business — (and the transmission of letters is a mere matter of business.) Private enterprise has always the most active physical powers, and the most ingenious mental ones. It is constantly increasing its speed, and simplifying and cheapening its operations. But government functionaries, secure in the enjoyment of warm nests, large salaries, official honors and power, and presidential smiles — all of which they are sure of so long as they are the partisans of the President — feel few quickening impulses to labor, and are altogether too independent and dignified personages to move at the speed that commercial interests require. They take office to enjoy its honors and emoluments, not to get their living by the sweat of their brows.”

Governments love to think inside the box. In fact, they are almost incapable of operating in any other fashion. But this has led to major inefficiencies, which, in the case of the USPS, have become too expensive to ignore. While Congress would need to approve this plan before any measure of privatization can occur, our elected officials would be wise to look at the options the private sector has to offer. If we are truly seeking prosperity, rather than financial insolvency, then the country would be wise to let the market take a shot at cleaning up government waste.

COLUMN BY

Brittany Hunter

Brittany Hunter

Brittany is a writer and editor for the Foundation for Economic Education. In addition to co-hosting FEE’s weekly podcast, she is also a co-host of Beltway Banthas, a podcast that combines Star Wars and politics. Brittany believes that the most effective way to promote individual liberty and free market economics is by telling timely stories that highlight timeless principles.

The Church, Military Service, Marriage Are Key Drivers of Black Men’s Success in America [Video]

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The American Enterprise Institute issued a report titled “Black men making it in America: The engines of economic success for black men in America” authored by W. Bradford Wilcox, Wendy Wang, and Ronald Mincy.

The below video outlines the findings of the report:

Wilcox, Wang and Mincy found:

Over the last decade, much of the racial news and academic research on black men in America has been sobering, if not downright depressing. But negative news isn’t the only story about race or even about black males in the United States. In Black Men Making It in America, we report some good news:

  • Black men’s economic standing. More than one-in-two black men (57%) have made it into the middle class or higher as adults today, up from 38% in 1960, according to a new analysis of Census data. And the share of black men who are poor has fallen from 41% in 1960 to 18% in 2016. So, a substantial share of black men in America are realizing the American Dream—at least financially—and a clear majority are not poor.
  • The institutional engines of black men’s success. As expected, higher education and full-time work look like engines of success for black men in America. But three other institutions that tend to get less attention in our current discussions of race—the U.S. military, the black church, and marriage—also appear to play significant roles in black men’s success. For instance, black men who served in the military are more likely than those who did not to be in the middle class when they reach mid-life (54% vs. 45%), according to our new analysis of the National Longitudinal Survey of Youth (NLSY79). Black men who frequently attended church services at a young age are also more likely to reach the middle class or higher when they are in their fifties: 53% of those men who attended church as young men made it, compared to 43% who did not. Finally, about 70% of married black men are in the middle class, compared to only 20% of never-married black men and 44% of divorced black men.
  • The importance of individual agency. Black men who score above average in their sense of agency—measured by reports that they feel like they are determining the course of their own lives versus feeling like they do not have control over the direction of their lives—as young men or teenagers in the late 1970s are more likely to be prosperous later in life. Specifically, 52% of black men who had a higher sense of agency as young men made it into at least the middle class when they reached age 50, compared to 44% of their peers who did not have that sense of agency.

At the same time, we find that another institution—the criminal justice system—stands as an obstacle to success for black men in America.

  • Contact with the criminal justice system. By midlife, only 28% of black men who had contact with the criminal justice system when they were young have moved into the middle or upper class, compared to 52% of black men who had no contact with the criminal justice system at a younger age.

Download the full report

Stop Forcing Black Citizens to Subsidize Non-Citizens. Prohibit Illegal Immigrants From Accessing Public Services.

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Washington, DC – Illegal immigrants should be prohibited from accessing all but emergency public services because the cost of these services unfairly and disproportionately falls on black families, according to the black leadership network Project 21 in its “Blueprint for a Better Deal for Black America.”

The Blueprint is Project 21’s 57-point plan for removing barriers blocking blacks from empowerment and ensuring that they have their chance of attaining the American dream.

The influx of millions of illegal immigrants has strained public services and placed a disproportionate burden on black communities, Project 21 notes. In education, for example, Project 21 says black students are more likely to suffer the consequences of expanding class sizes to accommodate immigrants than their white counterparts, noting that – in 83 of the largest 100 cities – black and Hispanic students attended schools with majority non-white populations.

Horace Cooper

Horace Cooper

“Millions of people being able to stay in our country illegally not only demonstrates the failure of our immigration system, but also causes a significant strain on public services – especially at the state and local level. Our neediest Americans, particularly blacks in urban communities, must compete for education and health programs with those who shouldn’t even be here,” explained Project 21 Co-Chairman Horace Cooper, a former professor of constitutional law and senior counsel to congressional leadership. “At the same time, much of the funding for these local programs comes from regressive taxes that hit poor and working-class blacks the hardest. This means they actually pay for the privilege of having unlawful immigrants in their neighborhoods. This is unfair, and it should end.”

Illegal immigration costs taxpayers about $113 billion a year at the federal, state and local level, according to figures from the Federation for American Immigration Reform. About $84 billion is absorbed by state and local governments that mostly derive funding through property, sales and income taxes.

Black citizens pay their share of these taxes, Project 21 notes, yet the government programs funded through these taxes are then reduced or unavailable to black Americans in too many communities due to illegal residents taking advantage of them.

There are four specific proposals in Project 21’s Blueprint designed to give black citizens a better deal and prevent them from being forced to subsidize those residing illegally in the United States:

  • Bar illegal aliens from accessing any public services, except emergency services.
  • Terminate federal funding of any social service agency that provides non-emergency services to illegal immigrants.
  • Prosecute providers and recipients who allow scarce federally-funded social services to be used by those who are in the country illegally.
  • End states’ special programs for assisting unlawful immigrants, redirecting those funds to needy citizens.
Christopher Arps

Christopher Arps

“To the political left, illegal immigrants are the ‘new blacks.’ Thus, its entitlement agenda now prioritizes those who enter our country illegally over the lawful citizens whose ancestors were here and fought for this country as far back as its founding. It’s appalling and a disgrace,” said Christopher Arps, a principal with Red Tail Strategies and co-founder of the Move-On-Up black social media network. “What’s equally appalling and disgraceful are so-called black leaders who push these policies of unfair wealth transfer. These giveaways to non-citizens must end.”

Every Monday between now and July 9, Project 21 will continue to release reform recommendations from its “Blueprint for a Better Deal for Black America” covering a specific subject area. The tentative remaining release schedule is as follows:

  • Strengthening Faith-Based Communities (June 25)
  • Promoting Self-Determination (July 2)
  • Ending Excessive Regulation (July 9)

Project 21 leaders have been briefing key staff at the White House and with congressional leadership about the 57 policy ideas – spread out over 10 subject areas and covering education, criminal justice, economics and more – that are available in its “Blueprint for a Better Deal for Black America.”

Project 21, a leading voice of black conservatives for over 25 years, is sponsored by the National Center for Public Policy Research. Its members have been quoted, interviewed or published over 40,000 times since the program was created in 1992. Contributions to the National Center are tax-deductible and greatly appreciated, and may be earmarked exclusively for the use of Project 21.

Founded in 1982, the National Center for Public Policy Research is a non-partisan, free-market, independent conservative think-tank. Ninety-four percent of its support comes from some 60,000 individuals, less than four percent from foundations and less than two percent from corporations. Sign up for email updates here.

EDITORS NOTE: Follow Project 21 on Twitter at @Project21News or general announcements. To be alerted to upcoming media appearances by Project 21 members, follow our media appearances Twitter account at @NCPPRMedia.

Target Part Deux: Starbucks Stock Tanks, CEO Says Store Closings To Triple

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Last year, Target took damage to its bottom line by involving itself in left-wing culture wars. Thanks to bowing to hard-core leftist activists, Starbucks may be seeing the same problem. From The Washington Times:

Starbucks may have appeased progressives with its social-justice workshops and open-bathroom policy, but such moves have failed to caffeinate the company’s bottom line.

The coffee giant’s stock took a tumble Wednesday after CEO Kevin Johnson announced that Starbucks would close 150 company-owned stores next year instead of the expected 50, with an emphasis on underperforming shops in densely populated urban areas, and lowered growth projections.

Mr. Johnson acknowledged that the decision to shut down 8,000 U.S. stores on May 29 for anti-bias training, driven by the high-profile arrests of two black men in Philadelphia, played a role in the company’s sluggish second-quarter performance.

That’s not all:

Starbucks shares fell Wednesday by 10 percent, hitting their lowest point in 52 weeks, while Morgan Stanley downgraded the company’s investment rating, citing flat growth in China and the decision to lower third-quarter U.S. growth projections from 3 to 1 percent.

 2ndVote Executive Director Robert Kuykendall laid out the ugly truth for the coffee giant:

“One would think Starbucks shareholders would be better served by leadership that prioritizes sound business principles over so-called social justice initiatives,” said Robert Kuykendall, spokesman for 2ndVote, a conservative corporate watchdog.

The curriculum for the half-day training on implicit bias was created in part by the Perception Institute, which is headed by Planned Parenthood board member Alexis McGill Johnson and receives financial support from billionaire George Soros’ Open Society Foundations.

The decision to close the stores “had an impact,” Starbucks CFO Scott Maw said on Tuesday’s earnings call, according to CNN Money.

“Starbucks is now admitting the time and resources spent on elevating racial matters in recent weeks have been setbacks,” said Mr. Kuykendall. “If Starbucks wants to be truly inclusive, and grow its business, perhaps as a company they should stop lecturing the country on social issues and focus on serving customers a good cup of coffee and providing investors with a return.”

The fact is that Starbucks continues to serve left-wing interests instead of its shareholders — and it’s suffering as a result. Consumers want businesses that provide a great product or service, not activists hidden behind a corporate mask. Like Target, Starbucks is shooting itself in the proverbial foot, and violating its duties to shareholders.

Please do your part to hold Starbucks accountable, just as you did for Target last year.

Is There Emerging Support For Trump Tariff Policies Toward China?

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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

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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.

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.

ACTIVATE YOUR MEMBERSHIP TODAY

Antitrust Matters Matter

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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

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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

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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.

A 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

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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

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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

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.

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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

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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

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

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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