Category Archives: Democrat

Theres a growing realization among Democrats that their plans for a $3.5 trillion spending package to reshape the nations social safety net and to tackle climate change will have to be slimmed down because of anxious centrists worried about the 2022 midterms.

Democrats by and large feel confident that President BidenJoe BidenFBI releases first Sept. 11 document following Biden executive order Afghan pilots to be transferred to US base after fleeing to Uzbekistan: WSJ NATO head says alliance signed off on US withdrawal from Afghanistan MOREs ambitious human infrastructure agenda has strong public support and that a majority of Americans favor raising taxes on corporations and the wealthy to help pay for it.

But theres also a recognition that moderate Democrats in swing states and districts need to show theyre shaping the emerging reconciliation package.

And a part of that process may be slimming down the package from the $3.5 trillion goal set last month by the Senate- and House-passed budget resolutions.

Most times when you face these situations there have to be some changes made in order to get the votes, especially when here in the [Senate] chamber its tied and only the vice president can break the tie, said former Sen. Kent Conrad (D-N.D.), who presided over the budget reconciliation process in 2009 and 2010 when Democrats passed sweeping health care reform legislation.

You probably will have to shave this back some, he said of the $3.5 trillion proposal outlined in the budget resolutions passed earlier this summer.

I suspect there are going to have to be some changes in order to get the votes to pass it, he added. Biden has himself said that these things should be paid for. He said that very clearly and he said it repeatedly.

The closer you get to actually paying for it, the better the chance you have of getting the votes.

Some centrist Democratic strategists are already warning that the size of the human infrastructure bill needs to be substantially curtailed to avoid a political disaster in the 2022 midterm elections.

Youve got all these Democrats in the center who are quietly saying I dont want to support $3.5 trillion because who wants to run on that given the current climate? Have you seen some of the recent polls coming out of the states? said one strategist.

By battling with progressives over the size of the package, moderates can insulate themselves from Republican claims that their party has been taken over by the far left.

Another factor is Bidens declining approval rating.

A Reuters/Ipsos tracking poll Friday showed Biden with a 47 percent national approval rating and a 46 percent national disapproval rate.

A Civiqs tracking poll this week showed Bidens approval ratings in several battleground states Arizona, Florida, Georgia and North Carolina trailing his disapproval ratings by 10 points to 14 points.

Two of the toughest Democratic votes to corral in the Senate belong to Sens. Joe ManchinJoe ManchinSunday shows preview: Biden issues new vaccine mandates; House committee marks up .5T reconciliation bill ATF nominee's fall is just latest defeat for gun control advocates On The Money The Democratic divide on taxes MORE (W.Va.) and Kyrsten SinemaKyrsten SinemaOn The Money Biden launches vaccine crackdown The Hill's Morning Report - Presented by Facebook - Democrats face headwinds on .5 trillion plan, debt ceiling Democratic leaders betting Manchin will back down in spending fight MORE (Ariz.), who have both said in recent weeks, they will not support a $3.5 trillion package.

Moderate Democrats in the House such as Rep. Stephanie MurphyStephanie MurphyCentrist House Democrats unveil rival proposal to lower drug prices LIVE COVERAGE: Ways and Means begins Day 2 on .5T package Senate, House Democrats split over taxes in .5T package MORE (D-Fla.) are also threatening to vote "no."

Former Rep. Ron Klink (Pa.), a centrist Democrat who represented a Republican-leaning district in western Pennsylvania, says there are other moderate Democratic lawmakers besides Manchin and Sinema who are balking at the $3.5 trillion price tag.

Theyre going to go back and forth, he predicted about the upcoming negotiations over the size of the package. There are other senators, too, that are just saying, wait, this is too much, this is too big.

Klink, however, is urging jittery Democrats not to run away from Bidens infrastructure agenda.

He warns that ducking for political cover was a fatal mistake made by moderates during the 2009 debate over the Affordable Care Act, which was followed by a landslide Republican victory in the 2010 midterm elections.

You have to sell your constituents on what it is that youre doing and why youre doing what youre doing, he said.

Faced with mounting Republican criticism over tax increases that will be part of the reconciliation package, the White House is emphasizing the benefits for the middle class, stressingits desire to enact tax cuts for daycare, health care and working families with children.

Klink said Democrats also need to make the case that floods, drought and fires that have devastated the nation show the pressing need for more infrastructure investment.

But Klink acknowledges its a safe bet the total size of the spending bill will fall below $3.5 trillion, though likely not as low as the $1.5 trillion or $2 trillion goal that Manchin has floated as alternatives.

I dont think it will be $3.5 trillion but I think it will be much closer to that than $1.5 trillion, he said.

House Ways and Means Committee Chairman Richard NealRichard Edmund NealHouse panel puts forth solar, environmental justice tax credits On The Money The Democratic divide on taxes LIVE COVERAGE: Ways and Means begins Day 2 on .5T package MORE (D-Mass.) made an important disclosure Thursday evening when he told reporters that the revenue-raising package coming out his committee will raise well less than what is needed to fully offset Democratic leaders official $3.5 trillion spending goal.

Asked if his package of revenue raisers would reach $3.5 trillion, Neal quickly replied: Oh, no, no. No, thats not at the moment what were talking about.

Speaker Nancy PelosiNancy PelosiBidens, former presidents mark 9/11 anniversary House Democrats propose making permanent expanded ObamaCare subsidies Democrats make case to Senate parliamentarian for 8 million green cards MORE (D-Calif.) on Wednesday tacitly acknowledged the final package is likely to come in under $3.5 trillion by characterizing that number as a ceiling.

I dont know what the number will be. We are marking at $3.5 trillion. Were not going above that, she told reporters.

Some Democrats now say it was inevitable that the $3.5 trillion number was going to slip, even though it already represents a major concession by Senate Budget Committee Chairman Bernie SandersBernie SandersSunday shows preview: Biden issues new vaccine mandates; House committee marks up .5T reconciliation bill By defeating Newsom recall, pro-choice women would send a powerful message How Gavin Newsom fought back against the recall MORE (I-Vt.) and other progressives, who initially pushed for a $6 trillion budget reconciliation spending target.

I dont know what the final numbers going to be. I always felt it was going to be less than $3.5 [trillion,] said Jim Kessler, executive vice president for policy at Third Way, a centrist Democratic think tank, and a former aide to Senate Majority Leader Charles SchumerChuck SchumerBidens, former presidents mark 9/11 anniversary Why is Biden hesitating to challenge China as East Asia's major trade partner? Retail group backs minimum corporate tax, increased IRS enforcement MORE (D-N.Y.).

But Kessler argued that the top-line revenue number that Neal says he will unveil this weekend wont necessarily constrain the size of the reconciliation package.

The budget reconciliation instructions, the budget resolution, basically says Ways and Means has to raise enough money to pay for what Ways and Means is going to spend, he said, pointing out that offsets can come from other committees.

Even so, the House Ways and Means Committee and the Senate Finance Committee are Congresss two tax-writing committees and are expected to come up with the bulk ofwaysto pay for items in the reconciliation package.

Frank Clemente, the executive director for Americans for Tax Fairness, raised concerns earlier this week that the House tax reform bill will wind up raising far less than whats needed to offset the $3.5 trillion spending goal.

Based on my back of the envelope estimates of what's been reported that House Democratsare considering, their revenue target is much too conservative, he told The Hill.

Read the original:

Democrats see $3.5T spending goal is slipping away | TheHill - The Hill

FatCamera | E+ | Getty Images

It's a situation that appears incongruous: Congressional Democrats want to expand Medicare's benefits while a trust fund that supports the program is facing insolvency.

Indeed, some Republican lawmakers have seized on that looming problem as a reason to oppose a proposal to add dental, vision and hearing coverage to Medicare. The provision is included in Democrats' 10-year, $3.5 trillion spending plan that would expand the social safety net and battle climate change, among other policy goals.

"Democrats are ramming through a reckless new expansion of Medicare just as it's a few years from bankruptcy," said Rep. Kevin Brady, R-Texas, in prepared remarks at a House Ways and Means Committee session on Thursday as debate began on portions of Democrats' massive legislative package.

Because of how Medicare is structured, adding dental, vision and hearing coverage would have little impact on the trust fund that's forecast to be insolvent beginning in 2026.

"In short, we're largely talking about different pots of money," said David Lipschutz, associate director and senior policy attorney for the Center for Medicare Advocacy.

Medicare has about 62.8 million beneficiaries, the majority of whom are at least age 65 or older. That's the age when most Americans must enroll unless they meet an exclusion (such as having qualifying health insurance elsewhere).

Here's a look at more retirement news.

Basic Medicare consists of Part A (hospital insurance) and Part B (outpatient care coverage). There also is Part D, which is prescription drug coverage. About 44% of beneficiaries choose to get those benefits through an Advantage Plan (Part C), an option offered by private insurance companies that may include limited coverage for dental, vision and hearing.

In simple terms, it's the Part A trust fund that is facing a shortfall beginning in 2026, according to the latest trustees report. Unless Congress intervenes before then, the fund would only be able to pay roughly 91% of claims under Part A beginning that year.

That trust fund gets most of its revenue from dedicated taxes paid by employees and employers.

Generally, workers pay 1.45% via payroll tax withholdings (although an additional 0.9% is imposed on income above $200,000 for single taxpayers or $250,000 for married couples). Employers also contribute 1.45% on behalf of each worker. Self-employed individuals essentially pay both the employer and employee share.

The expansion of benefits under Part B would have no direct impact on the solvency challenges facing the Part A hospital insurance trust fund.

Tricia Neuman

Executive director for the Kaiser Family Foundation's program on Medicare policy

Meanwhile, Part B which the expanded benefits would fall under gets its funding from monthly premiums paid by Medicare beneficiaries as well as from the federal government's general revenue. Same goes for Part D. And each year, premiums and revenue allocations are adjusted to reflect anticipated spending and ensure there's no shortfall.

"The expansion of benefits under Part B would have no direct impact on the solvency challenges facing the Part A hospital insurance trust fund," said Tricia Neuman, executive director for the Kaiser Family Foundation's program on Medicare policy.

Nevertheless, she said, adding dental, vision and hearing would have an effect on overall Medicare spending. A 2019 congressional report, based on a bill that would have added those benefits, estimated the cost to be $358 billion.

However, also included in Democrats' current spending plan is the goal of allowing Medicare to negotiate with drug manufacturers which currently is prohibited as a potential way to help pay for the expanded benefits.

"The prescription drug savings would be used to offset these new costs but there are a lot of competing spending priorities for the savings that are on the table," Neuman said.

The Democrats' massive legislative package is in the early stages of being debated. In addition to adding Medicare benefits, some Democrats want to include a lower eligibility age for Medicare (currently age 65).

Other health-care-related goals include extending the expanded premium subsidies for health-care insurance through the Affordable Care Act's public marketplace now in effect for just 2021 and 2022 and, in states that have not expanded Medicaid, providing coverage for eligible individuals.

It remains unclear whether the legislation that ends up being voted on will include everything being debated or whether current details of various provisions will end up modified. For the expanded Medicare benefits, the House measure would implement vision and hearing coverage in 2022 and 2023, respectively, while dental benefits would not begin until 2028.

"This is the closest we've come since the inception of the program for adding these benefits," said Lipschutz, of the Center for Medicare Advocacy.

"There's a sense that if we don't take advantage of this opportunity, another won't come along for a long time," he said.

As for the insolvency issues with the Part A trust fund, there are several options that could help remedy the problem, Neuman said. For instance, Medicare could cut payments to providers (hospitals, skilled nursing facilities, etc.) or to Advantage Plans. Or, cost-sharing for beneficiaries i.e., deductibles or copays could be increased.

Alternatively, additional funding sources could be identified. That could include ensuring certain taxpayers can't dodge the Medicare employment tax which has been proposed by Democrats as a way to increase revenue or redirecting other taxes to the trust fund.

"None of the policy options are politically appealing, but at some point Congress will need to address this issue to be sure that beneficiaries can get benefits to which they're entitled and providers get paid," Neuman said.

Go here to read the rest:

Medicare's trust fund faces insolvency in 2026. Here's how that squares with Democrats' efforts to expand the health insurance program - CNBC

The Finance Committee is also leaning toward changing the rules that large business partnerships have used to avoid taxation and evade Internal Revenue Service audits. Congress drafted the rules when partnerships were dominated by small businesses, like doctors offices. But increasingly, partnerships are large companies or subsidiaries of major corporations, arrayed in complex, overlapping configurations to allow their owners to shift profits, losses and deductions to evade taxes.

Some 70 percent of partnership income now goes to the top 1 percent of earners, and the tax minimization methods have become so complex that ordinary I.R.S. agents are not allowed to conduct certain audits without the assistance of top-flight I.R.S. lawyers.

The constant theme running through our tax code is, paying taxes is mandatory for working people, but optional for wealthy investors and mega corporations. Thats especially true when it comes to pass-through businesses and partnerships, the preferred tax avoidance tools for those at the top, Mr. Wyden said.

To change all that, Democrats want to constrain partnerships from gaming the system. Under the new rules, if two partners who were members of a single corporate group sold a shared asset, the profit would have to be divided equally, not parceled out disproportionately to maximize tax advantages. Similarly, partnership debt, which allows partners to take deductions and claim cash distributions, could not be shuffled from partner to partner to reduce their tax liabilities.

Those changes, without any increase in tax rates, would raise $172 billion over 10 years, according to the Joint Committee on Taxation, Congresss official scorekeeper on tax matters.

Though it would raise less revenue, about $100 billion, the tax on buybacks could be the more far-reaching measure. Over the past decade, Apple has been the king of the stock buyback, spending $423 billion to retire its stock. Microsoft, in a distant second place, spent nearly $129 billion.

Some Democrats have favored setting the tax so high that buybacks would make no economic sense. But Democratic tax aides said on Thursday that they were trying to balance the desire to curtail stock buybacks with the need to raise revenue. At the very least, a 2 percent tax on buybacks could encourage companies to use excess cash to pay higher dividends, which shareholders pay taxes on.

See more here:

Democrats Eye Taxing Stock Buybacks and Partnerships - The New York Times

House Freedom Caucus Chair Representative Andy Biggs at a news conference at the U.S. Capitol on Aug. 31, 2021.Photo: Alex Wong (Getty Images)

House Republicans are furious that their Democratic colleagues investigating the failed, Donald Trump-incited insurrection at the Capitol on Jan. 6 are seeking data on people tied to the riot and now they have a response: No, u.

Late last month, a Democratic-led committee asked 35 tech and telecom companies to preserve records of certain individuals involved in or linked to the riot, including Trump, his family, and Republican members of Congress. As first reported by Fox Business, GOP Representative Andy Biggs has now led several House Republicans in writing a letter to 14 firms demanding that they, in turn, preserve phone records and other data from 16 Democrats so that future Congresses can investigate alleged infractions.

According to Business Insider, the list of Democrats includes Vice President Kamala Harris, House Speaker Nancy Pelosi, House Judiciary Committee Chairman Jerry Nadler, Representative Alexandria Ocasio-Cortez, and Representative Eric Swalwell. Recipients of the letters included Amazon, AOL, Apple, AT&T, Facebook, Google, Microsoft, Snap, Inc., T-Mobile, US Cellular, Verizon, Signal, Telegram, and Twitter.

There has been vehement opposition to the commission from Republicans. They successfully blocked the Senate from holding its own investigation, and the top Republican in the House, Kevin McCarthy, threatened to strip GOP members of their committee assignments if they participated in the House inquiry. Just two Republican representatives have joined it.

Republicans have already lobbed vague threats of reprisal at companies that choose to comply with the Jan. 6 committees data requests. McCarthy claimed handing over the data would be a federal crime and vowed the firms could be subject to losing their ability to operate in the United States under a future GOP majority. McCarthy never specified what supposed law the companies would be breaking, or any kind of mechanism whatsoever by which the Republicans could make good on their threats of revenge.

G/O Media may get a commission

Experts interviewed by the Washington Post agreed that while there may be federal laws preventing the companies from handing over records voluntarily, no such law exists that would hinder them from preserving them in anticipation of a forthcoming subpoena. A former lawyer for the office of the House counsel, Mike Stern, told the paper the companies would have to comply with those subpoenas when theyre served: Even if there is arguably a competing legal obligation or privilege that might trump the subpoena, I know of no principle that requires any subpoena recipient to risk contempt to protect the interests of their customers.

In the letter, House Republicans doubled down on the claim that the preservation requests were illegal under the U.S. Constitution and U.S. Supreme Court precedent, adding neither the Committee nor you have the legal authority to provide those records. The letter continued that having said that, they want the records of Democrats to be preserved. This all obviously makes perfect sense.

Republicans have good reason to be anxious about the data requests. Some 147 GOP members of the House and Senate voted to refuse to recognize the 2020 election results, effectively declaring their support for baseless conspiracy theories about voter fraud and installing Trump for a second term. Those votes happened alongside the Jan. 6 riot, when a swarm of Trump supporters broke into the Capitol in an attempt to prevent Congress from certifying the results. Every single one of the Republicans named by CNN as part of the data-preservation requests voted against recognizing the election, and its clear the Democrats on the commission want to investigate their actions around the time of the attack:

... Republican Reps. Lauren Boebert of Colorado, Marjorie Taylor Greene of Georgia, Jim Jordan of Ohio, Andy Biggs of Arizona, Paul Gosar also of Arizona, Mo Brooks of Alabama, Madison Cawthorn of North Carolina, Matt Gaetz of Florida, Louie Gohmert of Texas, Jody Hice of Georgia and Scott Perry of Pennsylvania.

McCarthy has particular reason to be worried. CNN previously reported that he called Trump in the middle of the assault on the Capitol, urging him to call off the crowds, to which Trump responded Well, Kevin, I guess these people are more upset about the election than you are. McCarthy reportedly shot back, Who the fuck do you think youre talking to? The House leader has since packed away his spine, never to be seen again.

More:

House Republicans Say Democrats' Data Requests Are Illegal, and They Want a Piece of the Action - Gizmodo

A group of four Democratic congresswomen on Friday introduced a resolution condemning racism in the U.S. government and outlining relief for victims of racism 20 years after the Sept. 11, 2001, attacks.

Democratic Reps. Pramila Jayapal of Washington, Ilhan Omar or Minnesota, Rashida Tlaib of Michigan and Judy Chu of California announced the resolution on Friday evening to acknowledge the "hate, discrimination, racism, and xenophobia that Arab, Muslim, Middle Eastern, South Asian, and Sikh communities across America continue to experience two decades after" 9/11, according to a press release.

"We must fully condemn all manifestations and expressions of racism, xenophobia, discrimination, scapegoating, and ethnic or religious bigotry while also finally acknowledging the climate of hate that Arab, Muslim, Middle Eastern, South Asian, and Sikh communities have experienced in the two decades since September 11, 2001," the four congresswomen said in a statement.

Policemen and firemen run away from the huge dust cloud caused as the World Trade Center's Tower One collapses after terrorists crashed two hijacked planes into the twin towers, September 11, 2001 in New York City. (Photo by Jose Jimenez/Primera Hora/Getty Images)

They continued: "As we acknowledge that our own government implemented harmful policies that unfairly profiled and targeted Arab, Muslim, Middle Eastern, South Asian, and Sikh communities, we must also celebrate that these very communities have met these challenges with unwavering courage, strength, compassion, and resilience while uniting in the aftermath to advocate for civil and human rights work which continues to this day to benefit all Americans."

OBAMA 9/11 STATEMENT: AMERICA'S BEST CITIZENS STEP FORWARD DURING NATION'S WORST MOMENTS

Jayapal told Vox in an audio interview that after watching the 9/11 attacks on TV that she immediately thought, "What does this mean for people like me?"

"I had just become a U.S. citizen, but I think I was still very clear that I was an immigrant, that I was brown, that I was a woman," she said. "I had flashed through my head all the times in U.S. history where immigrants were targeted in very difficult times going back to the internment and other such times and I felt like everything was going to change for somebody that looked like me. That was the overwhelming thought in my head."

Less than two full months after 9/11, Congress passed the PATRIOT Act in what was praised as an effort to improve national security by giving federal law enforcement and intelligence agencies access to citizen's private records that the government hoped could help them find prospective terrorists. The law was later criticized for giving officials too much surveillance power over everyday Americans.

The Democrats do not name the PATRIOT Act in their press release but note that the FBI "and immigration authorities arrested and detained as many as 1,200 Muslims immediately after the September 11 attack, and none of these special interest detained people were ultimately indicted for terrorist activity."

9/11 REMEMBRANCE: NAVY SEAL WHO KILLED BIN LADEN WARNS ABOUT AMERICA'S GREATEST THREAT NOW

Between 2003 and 2006, the Federal Bureau of Investigation issued nearly 193,000 National Security Letters (NSLs), or documents requesting someone's personal information, but the agency only made one terror-related conviction based on those NSLs, according to the ACLU. The act, or Section 215, expired in 2020.

The new resolution calls for creating an "interagency task force" to review government surveillance policies targetting specific communities; holding hearings to discuss the findings of the task force; provide resources to organizations supporting victims of hate; and calls on the Secretary of Health and Human Services, the National Institute of Health, and the National Science Foundation to work together to determine the impact of government targeting and profiling.

CLICK HERE TO GET THE FOX NEWS APP

The measure has support from dozens of local and national civil rights and activist organizations.

"This resolution is a critical step in acknowledging the government targeting of our communities which predates 9/11 but exponentially grew afterwards. As we witness the devastating impacts of the wars on Afghanistan and Iraq, Congress must support community-based organizations who are leading movements to fundamentally shift the foreign and domestic policies at the root of this violence," Fatema Ahmad, executive director of Muslim Justice League, said in a Friday statement.

The rest is here:

Democrats introduce resolution condemning racism in government 20 years after 9/11 attacks - Fox News

Drew Angerer | Getty Images News | Getty Images

Democrats may scuttle tactics used by the rich to pass wealth to heirs with little to no tax, part of a broader plan to raise money for an expansion of the U.S. safety net.

Specifically, the party is considering disallowing some complex trust-planning techniques used by wealthy Americans to avoid estate tax, according to a discussion list of potential tax reforms obtained by CNBC.

Congressional Democrats may also ask the Treasury Department to update regulations to "prevent the abuse of non-economic valuation discounts," according to the list. This concept applies, for example, to entrepreneurs who give a minority interest in their business to their kids at a discounted rate.

The reforms are largely aimed at multimillionaires or billionaires who use the strategies to remove wealth from their estate and transfer it to heirs tax-free, according to estate-tax experts.

"Basically, you've got this basket of loopholes that collectively can be used to defeat the estate tax at really any level, even billionaires," according to Robert Lord, counsel for progressive group Americans for Tax Fairness.

The list, a draft of ideas lawmakers assemble before formally pitching them in the House or Senate, doesn't contain many specifics. It identifies "grantor-retained annuity trusts" and "intentionally defective grantor trusts" as the trusts in question.

More from Personal Finance:Top 1% dodge $163 billion in annual taxes, Treasury saysStimulus payments triggered millions of IRS 'math error' noticesDemocrats may change the rules for 'mega' IRAs over $5 million

Interestingly, Democrats don't seem to be weighing reforms to the estate tax itself, such as a higher tax rate or a reduced asset threshold that would subject more estates to federal levies.

A 40% federal tax rate currently applies to estates and gifts valued at more than $11.7 million for individuals and $23.4 million for married couples.

That asset threshold will fall after 2025 even if Democrats don't touch it, due to sunset provisions in the 2017 Tax Cuts and Jobs Act. (Roughly $6 million and $12 million, respectively, would be exempt from the tax half the current value at that time.)

Sen. Bernie Sanders, I-VT, and Senate Majority Leader Chuck Schumer, D-NY, on Capitol Hill on Aug. 9, 2021.

BRENDAN SMIALOWSKI | AFP | Getty Images

The proposed estate-tax reforms are part of Democrats' broader theme of raising taxes on the wealthy to help fund climate, paid leave, childcare and education measures, the cost of which may be as high as $3.5 trillion.

President Joe Biden has said households earning less than $400,000 a year would not see a higher tax bill.

Some of the potential estate-tax reforms share elements of recent Democratic proposals, such as the "For the 99.5% Act" co-sponsored by several lawmakers like Sen. Bernie Sanders, I-Vt.

Critics argue the burden of some estate-tax reforms wouldn't only impact the rich but would extend to others like family farmers.

"Many Democrats love to talk about taxing the richest of the rich, but in reality, their proposals would hurt Main Street far more than Wall Street," Rep. Glenn Thompson, R-Penn., ranking member of the House Agriculture Committee, said of the various recent estate-tax proposals.

Let's look at grantor-retained annuity trusts, one of the techniques in question, as an example of how individuals sometimes use trusts to shield wealth from tax.

These trusts also known as GRATs have been leveraged by numerous millionaires and billionaires, including the Trump family, Facebook CEO Mark Zuckerberg, the Walton family (of Wal-Mart fame) and former Goldman Sachs Chairman Lloyd Blankfein. Casino magnate Sheldon Adelson, who died earlier this year, reportedly used the trusts to shield billions of dollars from tax.

Individuals often use the trusts to transfer assets that are expected to grow significantly in value, according to Charlie Douglas, a certified financial planner who runs a family office in Atlanta.

Generally, heirs benefit from tax-free appreciation and the owner reduces or avoids a federal estate or gift tax. (The concept is similar for the aforementioned intentionally defective grantor trusts and valuation discounts, Douglas said.)

Let's say an individual puts $1 million of stock into a GRAT with a term of two years. The stock grows 50%, or $500,000, over that period. The trust yields a double benefit: Heirs get the $500,000 growth without tax and the appreciation is removed from the owner's estate, thereby limiting or perhaps even eliminating tax the estate owes upon the owner's death. It becomes the equivalent of a tax-free gift. (The owner would get back the $1 million principal plus a small amount of interest.)

Tax experts say some gaming can also occur, whereby owners intentionally lowball the value of an asset (like real estate) placed in the trust. Heirs would get more tax-free wealth as a result.

The "For the 99.5% Act," a guide for how Democrats may be thinking of new rules, would restrict these trusts as a wealth-transfer tool.

The legislation would increase the amount of time assets must remain in the trust to a minimum 10 years a potential deterrent since tax benefits are lost if the owner dies before the end of the term. Asset appreciation would also no longer be 100% tax-free, for example.

However, these policies may not end up in a final Democrat bill, or may be significantly amended if they do.

"If anybody says they know what's going to happen, they're crazy," Douglas said.

View original post here:

Democrats may rein in big estates without reforming the estate tax - CNBC

The SALT deduction, as the tax break is known, was pitched as a break for middle-class taxpayers in high-tax states most blue ones by giving them some relief on their taxes in the form of a federal tax deduction for state and local taxes they paid.

But a law ushered by the Trump administration capped deductions at $10,000, a move that mostly impacted the highest-earning residents of high-tax states like Massachusetts, New York, New Jersey, and California because many top-earning taxpayers could no longer deduct the full amount of their local tax liability.

Now, as Democrats hash out the details of their budget plan a plan that will need near-unanimous support on their side of the aisle in both houses of Congress, given the Democrats razor-thin majorities some lawmakers are drawing a line in the sand on lifting or repealing that SALT deduction limit.

Leading the call to repeal the SALT deduction cap altogether is Tom Suozzi, a Democrat from New York.

That would be a great political victory because it would help a lot of people in my district and in many districts throughout the country, Suozzi said last week.

Certainly high earners in Suozzis district and elsewhere would reap the benefit of his proposal. But studies, including one by the Tax Policy Center, showed that 96 percent of the savings from the SALT deduction went to the top 20 percent of wage earners, proof that it is not at all a lifeline for the middle class.

On its face, it sounds good to say that Congress should offer tax relief during a pandemic, said Richard V. Reeves, a senior fellow in Economic Studies at the Brookings Institution.

But the people who will benefit from lifting the SALT cap are not the people who were hurt by the pandemic, Reeves said. If the idea here is to help the people who were hardest hit, then this is the least well-targeted policy in economic history because the pandemic disproportionately hit people in lower-income jobs.

Few, if any, essential front-line employees and wage workers who suffered the most economically over the last year and a half are in the position to claim enough itemized deductions to even qualify for the SALT deduction. And the top 20 percent didnt feel the pandemic pain in nearly the same way.

Margaret Boyle, spokeswoman for House Ways and Means Committee chairman Richard Neal, who is helping hash of the bill, said in an e-mail that Neal is continuing to work with members on a path forward on this issue.

Meanwhile, some of the wealthiest earners in several states, including Massachusetts, already got a big boost from state law workarounds to the SALT deduction caps, allowing them to still claim federal deductions for state and local taxes if they have a pass-through company that will let them do so.

That too is an unfortunate move depriving federal coffers of needed funding for other crucial programs, but it also undercuts the urgency of calls from Suozzi and others that the budget bill should be held up on this issue if states are acting on their own.

Lawmakers should draw their own line and send a clear message: There is no good time to push tax breaks for the rich at the expense of programs for the lower and middle classes. But during a pandemic recovery is the worst time.

Editorials represent the views of the Boston Globe Editorial Board. Follow us on Twitter at @GlobeOpinion.

Read more:

Its the worst time for Democrats to push tax breaks for the rich - The Boston Globe

Democrats on the Ways and Means Committee are set to begin considering a huge chunk of their party-line bill on Thursday, yet are already privately predicting they'll end up getting strong-armed by the White House and Senate into taking the Medicare expansion championed by Sen. Bernie Sanders at the expense of the ACA.

And the angst on the left is more complicated than the typical progressives-versus-moderates dynamic it's the latest chapter in a long-running debate between those who want to focus on shoring up Obamacare and those who want to move toward a "Medicare for All"-style model. As both factions battle, the bulk of President Joe Biden's domestic agenda is hanging in the balance.

Im not going to be quietly sitting on the sidelines and watching all the people eligible for Medicare treated royally and the people who depend on Medicaid be neglected, House Majority Whip Jim Clyburn (D-S.C.) said, noting hes made Biden aware of his preference for solidifying an Obamacare Medicaid expansion aimed at low-income Americans, including minority communities in red states like his. Ill stand up to anybody with that position. I dont care who it is.

On its surface, the health care clash pits Sanders, the Senate Budget Committee chair, against House Speaker Nancy Pelosi and her leadership team, who are leading the charge to shore up the Affordable Care Act. Yet its roots go deeper: Senate Majority Leader Chuck Schumer, who never signed onto Sanders' Medicare for All bill, is in his corner for the current clash as the upper chamber digs in to defend its approach to the multitrillion-dollar social spending bill. Schumer touted a "robust and historic expansion of Medicare" to reporters on Wednesday morning.

While Pelosi and her allies also support the Medicare benefits a senior Democratic aide noted that theyve been part of the speakers drug bill for years they and several outside advocacy groups are pushing the party to prioritize the populations most vulnerable to prospective GOP rollbacks of the health law.

On Wednesday, Pelosi publicly downplayed the battle, saying "both will be present; thats not a problem." But behind the scenes, the House leadership camp argues that taking away benefits from seniors on Medicare would be more politically difficult for a future Republican Congress.

Meanwhile, the House progressive camp wants to spend significant money on expanding Medicare to cover vision, hearing and dental benefits for seniors. But despite the massive size of Democrats bill, theres not enough money in their pot to please everyone. Even the ambitious draft plan released by Ways and Means Chair Richard Neal (D-Mass.) Tuesday night, which a source close to the negotiations warned had not received White House or Senate buy-in, caused agita on the left.

That's because the Ways and Means proposal wouldn't fully phase in dental benefits until 2032. Progressives say theyve already compromised enough, arguing that they've already backed down on Medicare for All and lowering Medicare's eligibility age.

"We need to be 100 percent for universal health care, and we are so far from that today," said Rep. Pramila Jayapal (D-Wash.), the Progressive Caucus chief who is pushing for Medicare to cover more people with more generous benefits. "We need to recognize that while the ACA did many good things, just providing subsidies to private insurance is not the way to move forward."

The left's disappointment extends beyond the pace of the dental benefits roll-out, though negotiations are ongoing. Only half the cost of major dental procedures would be covered far less than the 80 percent some advocates had demanded. And many key expenses, like over-the-counter hearing aids, wouldnt be covered at all.

Rep. Lloyd Doggett (D-Texas), who chairs the Ways and Means subcommittee that will begin marking up the legislation on Thursday, is concerned that the limited coverage previewed Tuesday would put the new dental benefits out of reach for low-income seniors.

Its false hope for poor people, he lamented. They wont be able to use the service.

But while skimping on new Medicare benefits may anger progressives, it frees up scarce dollars for shoring up Obamacare and expanding Medicaid to cover 2 million uninsured people in red states that didn't expand their programs under Obamacare top priorities for Pelosi and House moderates, as well as progressives like Doggett who represent states that have refused to expand Medicaid on their own.

House leadership argues that the enhanced Obamacare subsidies Congress approved in March, which are set to expire at the end of next year, have to be made permanent given the likelihood that a future Republican majority could refuse to extend them later on. ACA supporters point to the fact that the temporary Obamacare enhancements were a major reason why the rate of uninsured people didnt soar when millions lost their jobs during the pandemic.

Im not going to pick among my children, said Rep. Diana DeGette (D-Colo.), referencing the different Democratic health components of the social spending bill. But we need to keep the ACA subsidies thats what is enabling millions of people to get health care coverage.

The House committee markups that will last through this week and next wont fully resolve the dispute. Not only does the full House still have to debate, amend and pass its bill, but the Senate where Democrats have a much slimmer majority and a more centrist caucus that will likely chafe at the Ways and Means approach will have its say in the coming months.

And the health care question is just one of many consequential policy battles Democrats will have to litigate quickly if they want to get the social spending plan to Bidens desk this fall, as planned. The ambitious legislation will try to encompass everything from paid family leave to action on climate and an overhaul of the nations immigration laws.

But the mounting tension over health care goals is pushing leadership to investigate every option. Aides to Pelosi this week embarked on a long-shot search for more sources of revenue or savings in addition to the hundreds of billions of dollars expected from the bill's bid to let Medicare negotiate the price of some drugs, according to two Democratic sources. If that pays off, it could allow more spending on both public and private insurance.

Yet most Democrats see inevitable and tough choices on how to spend the health care dollars on the table.

Im very much aware of the competing priorities here, and theyre all meritorious, Doggett said. But theres clearly not enough revenue to do all that needs to be done."

Originally posted here:

Democrats reopen old health care wounds with $3.5T mega-bill on the line - POLITICO

Low-income communities and people of color tend to be especially vulnerable to the effects of climate change because of historic inequities. In recognition of that fact, legislation introduced by Senator Edward J. Markey of Massachusetts and Representative Alexandria Ocasio-Cortez of New York, both Democrats, would require that at least half the members of a climate corps come from under-resourced communities of need. In addition, at least half the investment would support projects in underserved communities, with at least 10 percent spent in Native American lands.

Their bill, which has support from major environmental groups like the Sunrise Movement, would create the climate corps as part of AmeriCorps.

Tens of thousands of young people are going to be working to future-proof our country, Mr. Markey said. Within five years, he added, a Civilian Climate Corps will become part of the personality of the country in terms of how a whole new generation views climate change.

That has some Republicans worried.

What exactly does that mean? Representative Tom McClintock of California asked at a recent hearing. Does it mean a taxpayer funded community organizing effort? Young climate pioneers in every neighborhood to report on who is watering their lawn, whose fireplace is smoking, who is spreading forbidden climate disinformation?

Others noted that President Franklin Delano Roosevelts conservation corps was created when the United States was suffering from 20 percent unemployment. Thats not the current situation, where the national unemployment rate was 5.2 percent in August and many companies are having difficulty finding workers.

Representative Bruce Westerman of Arkansas, the top Republican on the House Committee on Natural Resources, called the Civilian Climate Corps a make-work program that will compete against American businesses at a time when help wanted signs remain in the windows.

Ultimately, however, Republicans are not in a position to influence the package since the party has already signaled members will unanimously oppose the broader $3.5 trillion budget bill. The fate of the program is up to Democrats and whether they can reach agreement, supporters of the climate corps said.

Originally posted here:

Democrats Want a Climate Corps. They Just Cant Agree How to Create It. - The New York Times

HOUSTON For weeks, Democratic lawmakers in Texas were hearing that select members would be breaking ranks and returning to the Capitol.

But as they gathered on Thursday morning for their daily Zoom call, there was no indication their 38-day walkout was about to fall apart.

More than 50 Democrats in the Texas House of Representatives fled Austin for Washington last month to prevent a quorum and effectively kill a sweeping election overhaul bill that would have introduced new restrictions to voting. Just one member, Garnet F. Coleman, had been expected to return to the Capitol on Thursday, still leaving Republicans two Democrats short of a quorum.

Later that same day, however, many Democratic legislators were shocked and disappointed when they saw two other members enter the House chamber with Mr. Coleman enough to call the House to order and begin work on a lengthy list of conservative goals set by Gov. Greg Abbott, a Republican.

By Friday, the tenuous alliance among Democratic House members split into open confrontation, as 34 of them released a joint statement criticizing their colleagues who returned to the Capitol. The caucus chairman, Chris Turner, did not sign on.

We feel betrayed and heartbroken, the Democratic members wrote in their joint statement. But our resolve is strong and this fight is not over.

State Representative Jessica Gonzlez, a Democrat from near Dallas, said she was particularly frustrated with the suddenness of the decision, with no advance warning that the other Democrats would be returning.

Whats most disheartening, Ms. Gonzlez said, is that so many of us have stuck together on this, so many of us have made sacrifices, and the least that people can do is just at least have a conversation as a caucus, as a whole. That way people can make their own decisions, too.

The return of the three absent Democrats on Thursday injected a new wave of uncertainty into the national battle over voting rights, one that will most likely be felt as far as Washington. The sudden crumbling of the Democratic blockade opened the door to passage of a new voting law containing restrictions Texas Democrats considered so strident they broke quorum twice.

But with passage of federal voting legislation still a long shot in Washington, Democrats in Texas find themselves with no clear path forward, and divisions remain on the best course of action.

The Texas House remains adjourned until Monday afternoon with no planned activity over the weekend. The voting bill, known as S.B. 1, passed the State Senate last week but has not advanced at all in the House. It was scheduled for a committee hearing on Monday, and would still need to go through another committee before it could come to the floor for a vote, setting up a potential showdown next week.

Some Republican representatives were not physically present in the Capitol on Thursday, despite being counted toward the total number there, leading many Democrats to claim the quorum was illegitimate.

But Rafael Ancha, a Dallas Democrat who is the chairman of the Mexican American Legislative Caucus, said he believed the Republican leadership would rally their members by Monday and that it made sense for him to return to Austin now.

There are a lot of bad bills, Mr. Ancha said. In no particular order, Ive got a large L.G.B.T. population that I need to go fight for. I need to go fight for the parents of school-aged children who are unvaccinated.

With a quorum in the House, Republicans could try to vote to suspend the normal rules and speed through a vote on the election bill and other bills on Monday. He said that in order to prevent that from happening, Democrats would be needed to vote against it.

We need a core group of members there to make sure there is no vote to suspend the rules, Mr. Ancha said.

Yet other Democrats held out hope that they could again prevent a quorum, given the thin margins involved.

There is a core of us, myself included, who still want to continue this fight, and still want to hopefully bring enough Democrats back into our coalition of holding the line, Ms. Gonzlez said. And so we havent given up.

The anger some Democratic lawmakers felt toward their colleagues was palpable on Friday. But for John Whitmire, a long-serving Houston state senator, such a reaction was a waste of time.

You cant stay gone forever, even if some members would suggest such a move, said Mr. Whitmire, who was among 11 breakaway Democrats who denied a quorum to the State Senate in 2003 to halt a redistricting bill by Republicans. After five weeks, he returned to Austin the first among his colleagues to do so.

Mr. Whitmire said he had spoken with several of the absent House members about whether or not to return.

I told them to do what they thought was best, to think for themselves and represent their districts, Mr. Whitmire said.

Though the current election bill in Texas resembles the version from May that first sparked a Democratic walkout, Democrats did win some concessions and Republicans altered or removed some of the most restrictive provisions. Sunday voting hours remain protected, and Republicans added an extra hour of mandatory early voting for weekdays. A provision that was designed to make it easier to overturn elections was also completely removed.

But the bill still bans voting advancements from Harris County, home to Houston, that were enacted in the 2020 election, including drive-through voting and 24-hour voting, and it bans election officials from proactively sending out mail ballot applications, or promoting the use of vote by mail.

The bill also greatly empowers partisan poll watchers, weakening an election officials authority over them and giving them greater autonomy at polling locations, and creates new barriers for those looking to help voters who require assistance, such as with translations.

The voting bill is far from the only item on Mr. Abbotts agenda. The list also included a host of conservative goals, like restricting abortion access, limiting the ways that students are taught about racism, restricting transgender student athletes and tightening border security.

As Democrats fretted, Republicans celebrated, racing to the Capitol to fill ranks and give Speaker Dade Phelan, a Republican, enough members for a quorum.

The rush was enough to pull one member, Steve Allison, a Republican from near San Antonio, from isolation after he tested positive for the coronavirus earlier this week. He remained by himself in a side room of the House chamber but was counted as present.

Continue reading here:

End of Walkout Splits Texas Democrats on Voting Rights - The New York Times