When Wall Street Writes Its Own Rules, It’s An Age of Unprecedented Corruption

From today’s New York Times:

On July 25, 2013, a high-ranking federal law enforcement officer took a public stand against malfeasance on Wall Street. Preet Bharara, then the United States attorney for the Southern District of New York, held a news conference to announce one of the largest Wall Street criminal cases the American justice system had ever seen.

Mr. Bharara’s office had just indicted the multibillion-dollar hedge fund firm SAC Capital Advisors, charging it with wire fraud and insider trading. Standing before a row of television cameras, Mr. Bharara described the case in momentous terms, saying that it involved illegal trading that was “substantial, pervasive and on a scale without precedent in the history of hedge funds.” His legal action that day, he assured the public, would send a strong message to the financial industry that cheating was not acceptable and that prosecutors and regulators would take swift action when behavior crossed the line.

Steven A. Cohen, the founder of SAC and one of the world’s wealthiest men, was never criminally charged, but his company would end up paying $1.8 billion in civil and criminal fines, one of the largest settlements of its kind. He denied any culpability, but his reputation was still badly — some might argue irreparably — damaged. Eight of his former employees were charged by the government, and six pleaded guilty (a few later had their convictions or guilty pleas dismissed). Mr. Cohen was required to shut his fund down and was prohibited from managing outside investors’ money until 2018.

Now, with the prohibition having expired in December, Mr. Cohen has been raising money from investors and is set to start a new hedge fund. He’ll find himself in an environment very different from the one he last operated in. His resurrection arrives as Wall Street regulation is under assault and financiers are directing tax policy and other aspects of the economy — often to the benefit of their own industry. Mr. Cohen is a powerful symbol of Wall Street’s resurgence under President Trump.

As the stock market lurched through its stomach-turning swings over the past week, it was hard not to worry that Wall Street could once again torpedo an otherwise healthy economy and to think about how little Mr. Trump and his Congress have done to prepare for such a possibility. Stock market turbulence typically prompts calls for smart and stringent financial regulation, which is not part of the Trump agenda. One of Mr. Trump’s first acts as president was to fire Mr. Bharara, who made prosecuting Wall Street crime one of his priorities. Mr. Trump has also given many gifts to people like Mr. Cohen.

Read the complete article here.

Thorny Logistics Of A Federal Shutdown and How It Affects Agency Employees

From National Public Radio:

Hundreds of thousands of federal employees will either be sent home or have been told to not show up to work at all on Monday, as furloughs due to the government shutdown that began Friday night start to affect workers around the country.

Senate Majority Leader Mitch McConnell, R-Ky., gave a foreboding warning from the Senate floor on Sunday.

“The shutdown is going to get a lot worse tomorrow,” he warned. “A lot worse.”

Republicans are insisting the shutdown is less “weaponized” than the last time this happened, in 2013 under then-President Barack Obama, but it’s still sure to have a broad effect across the country and get worse the longer it goes.

“Essential services” will continue, and essential workers will remain on the job, albeit without pay.

But there will be a lot of federal workers — thousands — who will see a change.

Every federal agency has a specific contingency plan, in the case of a loss of funding, and you can look through them all here. In 2013, about 800,000 of the 2.1 million civilian federal employees were furloughed in 2013, according to The Washington Post.

Read the complete article here, including a list of different agencies and the affects the shutdown will have on employees and services.

Individual Mandate Now Gone, G.O.P. Targets the One for Employers

From the New York Times:

Having wiped out the requirement for people to have health insurance, Republicans in Congress are taking aim at a new target: the mandate in the Affordable Care Act that employers offer coverage to employees.

And many employers are cheering the effort.

While large companies have long offered health benefits, many have chafed at the detailed requirements under the health law, including its reporting rules, which they see as onerous and expensive. Now that relief has been extended to individuals, some companies believe they should be next in line.

The individual mandate and the employer mandate are “inextricably entwined,” said James A. Klein, the president of the American Benefits Council, an influential lobby for large companies like Dow Chemical, Microsoft and BP, the oil and gas producer.

“It is inequitable to leave the employer mandate in place when its purpose — to support the individual mandate — no longer exists,” Mr. Klein said. “We are urging Congress to repeal the employer mandate.”

Opposition to the employer mandate could increase as more employers are fined for not offering coverage or for not meeting federal standards for adequate, affordable coverage. Since October, the Internal Revenue Service has notified thousands of businesses that they owe money because they failed to offer coverage in 2015, when the mandate took effect.

Representatives Devin Nunes of California and Mike Kelly of Pennsylvania, both Republicans, recently introduced a bill, supported by party leaders, to suspend the mandate, canceling any penalties that would be imposed for any year from 2015 to 2018.

“The employer mandate is a job-killer, a wage-killer and a business-killer,” Mr. Kelly said.

But Tom Leibfried, a health care lobbyist at the A.F.L.-C.I.O., called the proposals to repeal or weaken the employer mandate “a very bad idea.”

“The Affordable Care Act was built on a framework of shared responsibility,” Mr. Leibfried said. “If you get rid of the employer mandate, you will see people lose coverage from their employers.”

Such a move could also increase costs for the federal government. Even though Congress has eliminated the penalties for people who go without insurance, millions of consumers are still eligible for financial aid in the form of tax credits to help them pay insurance premiums. These subsidies increase with the rapidly rising cost of insurance. If fewer people receive coverage from employers, more will qualify for subsidized coverage in the public marketplaces created by the Affordable Care Act.

“The employer mandate holds down the cost of premium tax credits for the federal government,” said Catherine E. Livingston, a tax lawyer at the law firm Jones Day who was the health care counsel at the I.R.S. from 2010 to 2013. “Any employee who receives an offer of affordable coverage from an employer is not eligible for the tax credit. And the employer mandate provides a strong incentive for employers to offer affordable coverage.”

Read the complete article here.

In Cutting taxes, the Economic Odds and Historical Experience Are Against Trump

From today’s New York Times:

When President Trump adds his distinctive signature to the tax bill, he will also be making a huge bet that the Republican strategy of deep cuts for businesses and wealthy individuals will fuel extraordinary growth across the board.

Perhaps more than any other American political leader, Mr. Trump knows that long shots, like his own presidential bid, sometimes pay off. In that vein, he and congressional Republicans are arguing that their bitterly contested and expensive rewrite of the tax code will ultimately create more jobs and raise wages.

If they are proved correct, they will be repudiating not only historical experience, but most experts. From Congress’s own prognosticators to Wall Street’s virtuosos, scarcely any independent analyses project anything like the rosy forecasts offered by the president’s top economic advisers.

To Mr. Trump and his allies, the normal models just do not fully capture the high-octane “rocket fuel” embedded in the tax plan. Mr. Trump intuitively understands just how much attitudes and expectations can shape economic decisions.

With a businessman in the White House, Mr. Trump argues that companies, large and small, have a renewed faith in the economy. And the corporate tax cut, combined with the rollback in regulation, will prompt waves of new investment and hiring, as middle-class Americans liberally spend the extra money in their pockets.

Read the complete article here.

Al Franken will resign from Senate after more allegations of sexual improprieties

From today’s LA Times:

Al Franken announced Thursday he will resign his Senate seat, falling to a whirlwind of sexual misconduct allegations like those that have enmeshed other politicians, business leaders and media figures across the country in recent months.

The Minnesota Democrat, a second-term senator once seen as a potential presidential candidate in 2020 or beyond, earlier had said he would not leave office but would submit to a Senate ethics investigation into his behavior. He had acknowledged some misconduct, but denied other allegations.

His fate appeared sealed, however, on Wednesday, when more than half of Senate Democrats issued calls for his resignation in an uprising led by female senators. The choreographed move came as yet another woman came forward to accuse Franken of unwanted advances before he was elected to the Senate, and Senate Democratic leader Charles E. Schumer of New York privately met with Franken to tell him the time had come to quit.

Franken’s announcement marked the second departure this week of a once-heralded Democrat caught in unsavory accusations. On Tuesday, the senior member of the House, Rep. John Conyers Jr. of Michigan, quit after multiple complaints by aides that he had sexually harassed them.

The departure marks the end of the legislative career that began when Franken squeaked into office on an exceptionally narrow win, was reelected more easily and had emerged as a well-regarded member of the party’s growing liberal wing.

Franken’s resignation will not change the balance of power in the Senate, where Republicans hold the majority with 52 seats. Minnesota Gov. Mark Dayton, a fellow Democrat, will appoint a replacement to serve until a special election can be held in November 2018. The winner of that election will hold the seat until what would have been the end of Franken’s second term, in January 2021.

Read the entire article here.

Rep. John Conyers (D-MI) to resign amid many accusations of sexual harassment

From today’s LA Times:

Rep. John Conyers Jr. of Michigan, the longest-serving member of the House of Representatives, resigned Tuesday after his support among fellow Democrats collapsed amid accusations of sexual harassment by several female employees.

Conyers endorsed his son, John Conyers III, in a rambling radio interview with Detroit host Mildred Gaddis.

“I am retiring today, and I want everyone to know how much I appreciate the support, incredible undiminished support I’ve received,” Conyers said.

Conyers’ use of the word “retiring” rather than “resigning” left some uncertainty over when he was vacating the congressional seat he has held since 1965. Later in the day, however, he sent a letter to congressional leaders saying he was stepping down “effective today.”

Conyers’ replacement will be chosen in a special election.

The Detroit-area seat is strongly Democratic, so Conyers’ departure will not affect the balance of power in the House. But it does set up a potential family fight: While the congressman endorsed his son to succeed him, a great-nephew, state Sen. Ian Conyers, has publicly said he intended to seek the seat.

The announcement by John Conyers came after House Minority Leader Nancy Pelosi (D-San Francisco), fellow Congressional Black Caucus leader Rep. James Clyburn (D-S.C.) and increasing numbers of House members urged him to quit as former aides offered detailed accounts of inappropriate sexual advances he had made over decades.

A longtime civil rights activist — the only remaining member of Congresswho was elected in the 1960s — Conyers is the highest-profile political figure to be forced from office in the midst of a national debate over sexual harassment that began weeks ago with accusations against movie producer Harvey Weinstein.

Conyers has continued to deny any wrongdoing, although on Nov. 26, he agreed to step down as the top Democrat on the House Judiciary Committee in what served as the first acknowledgment of his vulnerability.

Read the entire article here.

Is it responsible government spending? GOP tax plan gives billions back to billionaires, adds trillions to the deficit

From today’s New York Times:

A Republican requirement that Congress consider the full cost of major legislation threatened to derail the party’s $1.5 trillion tax rewrite last week. So lawmakers went on the offensive to discredit the agency performing the analysis.

In 2015, Republicans changed the budget rules in Congress so that official scorekeepers would be required to analyze the potential economic impact of major legislation when determining how it would affect federal revenues.

But on Thursday, hours before they were set to vote on the largest tax cut Congress has considered in years, Senate Republicans opened an assault on that scorekeeper, the Joint Committee on Taxation, and its analysis, which showed the Senate plan would not, as lawmakers contended, pay for itself but would add $1 trillion to the federal budget deficit.

Public statements and messaging documents obtained by The New York Times show a concerted push by Republican lawmakers to discredit a nonpartisan agency they had long praised. Party leaders circulated two pages of “response points” that declared “the substance, timing and growth assumptions of J.C.T.’s ‘dynamic’ score are suspect.” Among their arguments was that the joint committee was using “consistently wrong” growth models to assess the effect the tax cuts would have on hiring, wages and investment.

The Republican response points go after revenue analyses by the committee and by the Congressional Budget Office, which scores other legislation, saying their findings “can be off to the tune of more than $1.5 trillion over ten years.”

The swift backlash helped defuse concerns about the deficit impact long enough for the bill to pass by a vote of 51 to 49. Some deficit hawks in the Senate caucus were sufficiently concerned about the report on Thursday night to delay the tax vote by a day, but the only Republican lawmaker to vote no was Senator Bob Corker of Tennessee, whose last-minute efforts to cut the size of the package or otherwise offset the deficit impact were unsuccessful.

Instead, Senate Republicans questioned the timing of the analysis’ release on Thursday, and a spokeswoman for the Senate Finance Committee released a statement saying the findings are “curious and deserve further scrutiny.”

That sentiment was repeated over and over, before and after the vote. “We think they lowballed it,” Senator John Cornyn of Texas, the majority whip, told reporters on Thursday. On Sunday, Senator Tim Scott of South Carolina said on CNN that “there’s no doubt that the J.C.T. has been consistently underestimating the activity in our economy.”

In the final hours before and after the bill passed, party leaders insisted that the tax plan would produce enough economic growth to pay for themselves with additional tax revenue from growing businesses and higher-paid workers. “I’m totally confident this is a revenue-neutral bill,” Senator Mitch McConnell of Kentucky, the majority leader, told reporters early Saturday morning after the vote. “Actually a revenue producer.”

Yet there was no data to support those claims, despite promises by the Trump administration that such an analysis would be forthcoming. The Treasury, whose secretary, Steven Mnuchin, has said repeatedly that his department was working on an analysis to show how the tax cuts would not add to the deficit, has not produced any studies that back up those claims. Last week, the Treasury’s inspector general said it was opening an inquiry into the department’s analysis of the tax plan.

The attack on the joint committee and its analysis is a change from the praise Republicans have long heaped on the body, which is staffed with economists and other career bureaucrats who analyze legislation in depth.

“The people who prepare our cost estimates are the best in the business,” Republicans on the House Budget Committee said on a page that has since been removed from their website, “and they’ve been working on this issue for years.”

The critique is the latest example of Republican lawmakers muddying the waters on empirical research in an effort to boost their policy agendas. During the debate over repealing and replacing the Affordable Care Act, lawmakers lashed out preemptively at the Congressional Budget Office over how many people would lose health insurance.

Read the entire article here.

Risky GOP tax cuts won’t trickle down, may lead to economic disaster in future

From today’s Politico News:

Republicans are on the cusp of passing the biggest corporate tax cut in American history, betting it will ignite an economic boom that creates better jobs and fatter paychecks for middle-class Americans.

That boom may never trickle down.

Some economists and corporate executives are already warning that simply lowering tax bills won’t necessarily cause companies to hire more people and pay them better. Instead, they could just wind up returning the extra cash to shareholders.

That could leave President Donald Trump and congressional Republicans celebrating a short-term legislative win that hurts them in the long run, with bigger deficits and little to show for it. And an already deeply unpopular bill — one that includes immediate hikes on some individual taxpayers — could become a serious political headache in 2020 and beyond.

“Frankly, I think they are bonkers,” David Mendels, former chief executive officer of software firm Brightcove, said of the GOP banking on a lower corporate rate to generate bigger worker paychecks. “It really doesn’t work that way. No CEO sits there and says, ‘When my tax rate goes down, I’m going to hire more people and pay them more.’”

Tax legislation cleared a key procedural hurdle in the Senate on Wednesday ahead of a formal vote as early as Thursday. House and Senate lawmakers will need to convene in coming weeks to hash out a compromise between their two bills.

Even some Republicans seem deeply unconvinced by predictions from members of the Trump administration and more aggressive budget forecasters that slashing the top corporate rate from 35 percent to 20 percent will generate enough economic growth to offset the additional $1.5 trillion in debt the Senate tax plan envisions over the next decade.

Read the entire article here.

Sexual harassment claims in Congress have been buried from public oversight

From today’s Buzzfeed by P. McLeod and L. Villa:

Michigan Rep. John Conyers, a Democrat and the longest-serving member of the House of Representatives, settled a wrongful dismissal complaint in 2015 with a former employee who alleged she was fired because she would not “succumb to [his] sexual advances.”

Documents from the complaint obtained by BuzzFeed News include four signed affidavits, three of which are notarized, from former staff members who allege that Conyers, the ranking Democrat on the powerful House Judiciary Committee, repeatedly made sexual advances to female staff that included requests for sexual favors, contacting and transporting other women with whom they believed Conyers was having affairs, caressing their hands sexually, and rubbing their legs and backs in public. Four people involved with the case verified the documents are authentic.

And the documents also reveal the secret mechanism by which Congress has kept an unknown number of sexual harassment allegations secret: A grinding, closely held process that left the alleged victim feeling, she told BuzzFeed News, that she had no option other than to stay quiet and accept a settlement offered to her.

“I was basically blackballed. There was nowhere I could go,” she said in a phone interview. BuzzFeed News is withholding the woman’s name at her request, because she said she fears retribution.

Last week the Washington Post reported that the office paid out $17 million for 264 settlements with federal employees over 20 years for various violations, including sexual harassment. The Conyers documents, however, give a glimpse into the inner workings of the Office of Compliance, which has for decades concealed episodes of sexual abuse by powerful political figures.

Read the entire article on Congressional coverups here.

House Republicans Are Trying to Pass the Most Dangerous Wall Street Deregulation Bill Ever

From Mother Jones, June 7, 2017 by Hannah Levintova:
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From the earliest days of his campaign, Donald Trump has opposed the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Obama-era financial reform law passed in response to the 2008 financial crisis.  Trump has characterized it as a “disaster” that has created obstacles for the financial sector and hurt growth. In April, he repeated his promise to gut the existing law.
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“We’re doing a major elimination of the horrendous Dodd-Frank regulations, keeping some, obviously, but getting rid of many,” Trump said in a meeting with top executives during a “Strategic and Policy CEO Discussion,” which included the leaders of major companies like Walmart and Pepsi. He added, “For the the bankers in the room, they’ll be very happy.”
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The Republican Congress shares Trump’s dislike of Dodd-Frank and this week, the House plans to vote on the Financial CHOICE Act, a Dodd-Frank overhaul bill that will, as promised, make banks and Wall Street “very happy” if it becomes law, while undoing numerous financial safeguards for regular Americans. (CHOICE is an acronym for “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.”)
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The bill, sponsored by Rep. Jeb Hensarling (R-Texas), takes aim at some of Dodd-Frank’s main achievements: It guts rules intended to protect mortgage borrowers and military veterans, and restrict predatory lenders. It also weakens the Consumer Financial Protection Bureau’s ability to oversee and enforce consumer protection laws against banks around the country—upending a mix of powers that have helped the CFPB recover nearly $12 billion for 29 million individuals since opening its doors in July 2011. The bill also weakens or outright cuts a number of bank regulations enacted through Dodd-Frank to keep risky investing behavior in check in order to avoid the economic devastation of another financial crisis or taxpayer-funded bailout.

Read the entire article here.