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Ryan Forum Will Preview Poverty Agenda

By Alan K. Ota, CQ-Roll Call (TNS)

WASHINGTON — House Speaker Paul D. Ryan of Wisconsin is opening the door to new initiatives aimed at helping low-income families as he prepares to discuss poverty in a forum showcasing GOP presidential candidates in Columbia, S.C., on Saturday.

The top Republican plans to make the case — with seven GOP presidential aspirants — for a conservative approach to shrinking poverty’s footprint. Both parties have shown a willingness to develop bipartisan initiatives to help 46.7 million Americans living in poverty, even as they vie on the campaign trial over competing economic plans and ideologies.

Robert Doar, a fellow in poverty studies at the American Enterprise Institute, predicted participants would “show the GOP has more to offer than tax cuts and greater growth.”  AEI is one of the sponsors of the gathering.

Ryan plans to join Sen. Tim Scott, R-S.C., to moderate three panels of presidential candidates and to outline his own thoughts in a speech and panel discussion. The event sponsored by the Jack Kemp Foundation could serve as a bellwether of prospects for items that could move as stand-alone bills or as add-ons to broader legislation such as a possible international tax overhaul.

Scott said in an interview there would be openings to move modest proposals aimed at promoting private and charter schools and helping the jobless, including his own plan (S 574) to create a $1,000 business tax credit for employers that hire an apprentice younger than 25 years old.

“We hope that we will see more traction for apprenticeship programs and school choice opportunities,” Scott said.  He said other bigger items such as proposals to broaden eligibility for the earned income tax credit for childless workers likely would be an issue “in 2017 for the next Congress.”

Robert Greenstein, president of the liberal Center for Budget and Policy Priorities, said he hoped Ryan and President Barack Obama could work out differences on proposals to broaden eligibility for the earned income tax credit, or EITC, to low-income workers without minor children but called it “rather doubtful because it’s hard to see the vehicle on which it would move.”

Doar said Ryan likely would focus on ensuring that federal programs do not serve as “poverty traps.”

“He’s open to ideas that can make programs work more effectively and target assistance where people have the greatest need,” Doar said.

Ryan demonstrated his willingness to give ground in the recent $680 billion permanent tax break accord (PL 114-113), which included long-term extensions of the expanded EITC and the additional child tax credit.

Despite the recent tax deal, the two parties disagree over the best way to reduce the nation’s 14.8 percent poverty rate. While Republicans argue for tax cuts and for streamlining aid programs, Democrats advocate worker incentives and raising the federal minimum wage of $7.25 an hour.

Democratic Goals Democrats are looking for ways to shoehorn their own priorities into the floor agenda.

Rep. G.K. Butterfield, D-N.C., said he and other Democrats planned to work with Ryan on efforts to target funding in a range of federal programs to more than 400 rural counties that have the highest persistent poverty rates. For example, one proposal by Assistant Minority Leader James E. Clyburn, D-S.C., would designate a 10-percent share of funds for rural development and other programs to counties with poverty rates of 20 percent or more for the last 30 years.

Aid targeting could face hurdles with conservatives that seek deeper cuts. But Butterfield predicted wide support for putting more existing funds “into poverty counties.” He said he believed “Ryan is ready to deal in a bipartisan way on issues that are important to low-income families.”

Butterfield said he and other Democrats would oppose any effort by conservatives to shrink aid programs such as temporary assistance for needy families, known as TANF. “We would never tolerate any decrease in TANF. We want an increase in TANF funding,” Butterfield said.

And for now, both parties disagree over a GOP push to reshape TANF to ensure enforcement of work requirements while providing more flexibility for beneficiaries to get job training and education. Rep. Charles Boustany Jr., R-La., said he had handed off responsibility for TANF legislation to Rep. Vern Buchanan, R-Fla., as part of the reshuffling of subcommittee gavels, when Rep. Kevin Brady, R-Texas, replaced Ryan as the top tax writer.

©2016 CQ-Roll Call, Inc., All Rights Reserved. Distributed by Tribune Content Agency, LLC.

Photo: Newly-elected U.S. Speaker of the House Paul Ryan (R-WI) holds his first news conference at Republican National Committee headquarters in Washington November 3, 2015. REUTERS/Gary Cameron

Loading Time For Online Sales Tax Is Expiring

By Alan K. Ota, CQ-Roll Call (TNS)

WASHINGTON — Anyone hoping for an online sales tax bill out of the 114th Congress might as well be staring at a spinning circle on a computer screen.

A push to allow states to enforce sales taxes on remote online vendors faces likely stalemate, with a quiet retreat by Senate supporters and a splintering of House Republicans. That’s a big disappointment to backers of an overhaul of the tax structure for Internet sales; they had hoped the momentum from Senate passage of a bill in the last Congress would carry over into 2015.

House Judiciary Chairman Robert W. Goodlatte (R-VA), said he has no firm timetable for introducing his draft bill to require sales tax collections by remote vendors — based on rates in effect in the seller’s home state. Under Goodlatte’s proposal, the buyer’s home state would receive sales tax revenue from a remote online transaction involving one of its residents, but only up to the rate charged by the seller’s home state.

“The time frame is when we have an agreement,” Goodlatte said in an interview this month. “We are working with a wide variety of parties to reach an agreement on how to proceed. We are looking to work this out….We need people on board with widely differing points of view — governors, state legislators, big box retailers, online retailers, technology companies.”

Goodlatte has said in the past he would issue a bill. But he faces resistance from some conservatives, who argue that any legislation would be perceived as a tax increase.

Goodlatte said he and Representative Anna G. Eshoo (D-CA), will hold back on moving his draft bill until there is an agreement among key groups, including the National Retail Federation, National Governors Association, and National Conference of State Legislators. All three groups support the Marketplace Fairness Act proposed by Budget Chairman Michael B. Enzi, (R-WY), that would clear the way to enforce traditional sales taxes based on rates in the buyer’s home state.

But the Enzi plan has no clear path to the Senate floor, even though a similar bill won easy passage, 69-27, in May 2013. It was never acted on in the House.

That’s because the bill is opposed by Senate Majority Leader Mitch McConnell (R-KY), and other key players such as Majority Whip John Cornyn (R-TX), and Finance Chairman Orrin G. Hatch (R-UT).

Instead of bucking Senate GOP leaders, Health, Education, Labor, and Pensions Chairman Lamar Alexander said he and other supporters of the Enzi bill think the House should go first this time.

“In the last Congress, the Senate took the lead and passed legislation first. Now, the House should pass legislation and send it to the Senate,” the Tennessee Republican said.

With Goodlatte at odds with House backers of the Enzi approach, lobbyists say prospects for a 2015 deal are fading, and will vanish completely in the 2016 campaign season.

“The chances are less than 50 percent that we will see a bill pass the House in 2015,” said Steve DelBianco, executive director of NetChoice, an alliance that represents eBay, Facebook, and other online commerce companies such as Utah-based Overstock.com.

Even that may overstate the potential for action. If Congress simply does nothing, opponents of a national online sales tax plan can maintain the status quo, where states have little chance of enforcing sales taxes for online purchases across state lines.

Goodlatte disputes the gloomy predictions. “I wouldn’t rate it that way at all. I think it’s something we can solve. And we’re committed to doing it,” he said.

Goodlatte said he had not decided whether to try to move an online sales tax compromise with his separate proposal for a permanent extension of the moratorium on new Internet access taxes, which expires at the end of September.

Loading Time Talks are going on between Goodlatte and Oversight and Government Reform Chairman Jason Chaffetz (R-UT), who has been working on a proposal similar to the Enzi plan with a streamlined audit process for online vendors and other adjustments. Like Goodlatte, Chaffetz said he had no timetable for introducing a bill, but would like to reach an accord.

Instead of holding a markup with votes on rival proposals, Goodlatte said he wants to broker a deal that brings together states and retailers backing the Chaffetz and Enzi measure with business alliances backing Goodlatte’s approach: NetChoice and the Northern Virginia Technology Council, which includes Google and Hewlett-Packard Co.

David French, a senior vice president of the National Retail Federation, confirmed that a coalition of retail industry groups had sent suggestions to Goodlatte in hopes of reshaping his bill. “We have encouraged the chairman to consider a destination-sourced model instead,” French said. “We think the chairman wants to solve the problem.”

Critics say Goodlatte’s origin-based approach favors some Silicon Valley businesses, and would hurt Main Street retailers. For example, they said it could prod manufacturers and online retailers to move to states with low sales taxes or to lobby home-state legislatures for exemptions or reduced rates for certain products such as computers or health-related items.

Goodlatte denies he is tilting in favor of Silicon Valley, where he has long been a GOP rainmaker with his purview over patents, copyrights, and foreign skilled-worker visas. He raised more than $435,000 in the last cycle from entertainment, technology, and Internet businesses and their employees, according to the Center for Responsive Politics.

Goodlatte said his approach is best for many businesses.”It’s better for growing our national economy because it does not allow states to regulate businesses outside of their jurisdiction,” he said.

Enzi introduced his latest version of the Marketplace Fairness Act this month, and cited help from an unlikely ally: Supreme Court Justice Anthony M. Kennedy.

He said he hoped to gain support because of Kennedy’s recent written remarks expressing a desire to reverse the court’s 1992 ruling in the Quill v. North Dakota case that prevented states from compelling sales tax collection by vendors with no nexus or presence in their borders.

Kennedy, in his concurring opinion for a court decision in a Colorado online commerce case, wrote that he believed it was time for “a reconsideration of the court’s holding in Quill,” citing concerns about state fiscal problems and “changes in technology and consumer sophistication.”

“A case questionable even when decided, Quill now harms states to a degree far greater than could have been anticipated earlier,” Kennedy said.

The comments were connected to the court’s ruling on Tuesday in favor of online retailers in Direct Marketing Association v. Broehl. The court cleared the way for vendors to challenge a Colorado mandate for customer information to expedite enforcement of sales taxes.

Supporters of the Enzi bill say Kennedy’s remarks may spur legislation by raising the possibility of new court rulings that favor states.

NetChoice’s DelBianco said he’d prefer legislation, but not at all costs.

“I would rather take my chances with the Supreme Court than have Enzi’s bill,” he said.

Photo: Tim Reckmann via Flickr

Republicans’ Challenges Start With Economic News

By Alan K. Ota, CQ-Roll Call (TNS)

WASHINGTON — In his inaugural speech as Senate majority leader, Kentucky Republican Mitch McConnell said he could see “a glimmer of hope” in new economic data showing a 5 percent annual growth rate in the third quarter of last year. This uptick, he said, coincided with “the expectation of a new Republican Congress” just before the November election.

McConnell’s self-confidence, though, masks big challenges the GOP faces in dealing with the economy and the administration in the coming months.

The tough task, says John J. Pitney Jr., a political scientist at Claremont McKenna College in California, is to promote ambitious measures such as tax and spending cuts in what is becoming a relatively good economic climate. Both parties, he said, will try to take advantage of the improvements to bolster their own approaches.

A Labor Department report found the economy added 252,000 jobs in December, and it estimated the unemployment rate was 5.6 percent — the lowest level in seven years, and just over the longer-run sustainable target rate of 5.5 percent set by the Congressional Budget Office.

However, the report revealed clear evidence of wage stagnation, including a drop of 5 cents or 0.2 percent in average hourly earnings.

“There’s enough economic distress to make a plausible case for change” in the approach to the economy, Pitney said. “The basic argument is the good stuff is because of us, and the bad stuff is because of the other guy.”

In the first days of the new Congress, the parties offered competing fiscal agendas and tailored their arguments to match the economic landscape. Democrats unveiled new initiatives such as a proposal in the House for tax incentives for middle-class families and President Barack Obama’s call for free community college.

“Now that we’ve seen calmer waters economically,” Obama said on Jan. 9, “if we all do our part, if we all pitch in, then we can start making sure that all boats are actually lifted again, and wages and incomes start rising again.”

Democrats sought to deny Republicans credit for sound fiscal stewardship, and vowed to defend Obama’s signature health care law and the financial services regulatory law.

“The record is clear. This recovery from one of the worst recessions in our history was led by President Obama,” Senate Minority Whip Richard J. Durbin of Illinois said. “If they try to rewrite some of the laws that made this happen, they are in for a fight.”

Republicans, meanwhile, have been trying to force showdowns on contentious issues such as immigration and the Keystone XL pipeline. House Republicans are trying to deny money for Obama’s executive action to defer deportation of some immigrants.

House Budget Chairman Tom Price (R-GA) and other senior Republicans argue that the recovery would be broadened if lawmakers embraced potential tax cuts and spending cuts in a fiscal 2016 budget blueprint.

“We’re excited and enthused that it was 5 percent,” Price said. “I think it’s unlikely that it would continue at 5 percent.”

Senior Republican senators such as Finance Chairman Orrin G. Hatch of Utah and Rob Portman of Ohio predict that the emerging GOP agenda will probably consist of a blend of big-ticket items Obama might veto and more modest measures that could be enacted with bipartisan consensus.

“Everything we’re promoting on the growth side helps to get wages up and permit more upward mobility,” said Portman, who directed the Office of Management and Budget for President George W. Bush. He said low energy prices were a “huge factor” in the recovery, and said the GOP’s contribution had included support for spending and tax deals and opposition to new federal mandates.

“Those of us who have fought against federal over-regulation have been successful,” Portman said.

Hatch said one of the best arguments for a tax overhaul was that it would help to extend economic gains. “It’s going to have ups and downs in the economy all the time,” he said, “but I would like to see it more steady.”

But Hatch also said a tax overhaul could “take months, if not years.” Instead of focusing entirely on big goals, he vowed to move a number of early, bipartisan proposals such as trade promotion authority for Obama and stand-alone proposals like repeal of the medical device tax.

While the parties clash on big issues, Majority Whip John Cornyn of Texas said he believed both parties could reach accord on some items. “We ought to look for those things that we can agree on,” Cornyn said.

“The best thing we can do is avoiding cliffs and crisis,” said Joint Economic Committee Chairman Dan Coats (R-IN), referring to the deal on New Year’s Day 2013 that avoided year-end tax increases and mandatory spending cuts known as the fiscal cliff and the 16-day government shutdown the following October. Coats and other senators are pushing to avert such meltdowns.

On the other side, Durbin and other senior Democrats say they will be open to talks on bipartisan proposals that could help sustain the recovery.

“I’m not ruling out bipartisan efforts to deal with the tax code and the economy,” Durbin said.

Photo: Gage Skidmore via Flickr