Thursday, April 27, 2017

Merry tax cut? Not so fast -- April 27, 2017 column


It’s beginning to look a lot like Christmas, but don’t spend your shiny new Trump tax cut just yet.

To update an old saying: There’s many a slip ‘twixt the lip and the cut.

President Donald “Santa” Trump promises “the biggest individual and business tax cut in American history.” So far he doesn’t have a plan or even a bill in Congress.  

The one-page outline the White House handed out Wednesday read more like a campaign flyer than a legislative blueprint. It’s hard to argue with any of these goals: 

“Grow the economy and create millions of jobs. Simplify our burdensome tax code. Provide tax relief to American families – especially middle income families. Lower the business tax rate from one of the highest in the world to one of the lowest.”

Briefing reporters, Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn were short on details but long on -- irony alert -- hope and change.

“We have a once-in-a-generation opportunity to do something really big,” Cohn told reporters.

“Under the Trump plan, we will have a massive tax cut for businesses and massive tax reform and simplification,” Mnuchin said.

The lack of details gives Trump room to negotiate with reluctant members of Congress. Democrats predictably blasted Trump’s proposal for mostly helping himself and other wealthy taxpayers,

although he won’t release his tax returns so we’ll never know how much. He’ll need support of Republicans in Congress who traditionally have been wary of inflating the federal debt.

One provision left off the outline was a “border adjustment” tax on imports pushed by House Speaker Paul Ryan, R-Wis., to help pay for tax cuts. Putting the best face on the situation, Ryan said the White House was “basically along the same lines that we want to go,” and Congress and the White House were “moving and getting on the same page.”

Trump’s big idea is to cut the corporate rate more than 50 percent to 15 percent, reduce the number of individual tax rates from seven to three, raise the personal deduction and eliminate most other deductions -- and pay for it all through accelerated economic growth of 3 percent.

As Popeye’s friend Wimpy would say: “I’d gladly pay you Tuesday for a hamburger today.”

We’ve seen this movie before. Presidential candidate Ronald Reagan endorsed supply side economics and big tax cuts in 1980, promising economic growth would pay for them. His rival George H.W. Bush mocked Reagan’s plan as “voodoo economics.”

President Reagan got his tax cuts and the economy did boom for a while, although economists still argue whether Reagan’s tax policies were responsible. Eventually Reagan raised taxes several times.

After President George W. Bush cut taxes in 2001 and 2003, the economy never achieved liftoff, bumping along at an average growth of 2.1 percent annually for eight years. The 9/11 terrorist attacks were partly to blame for the sluggish economic growth.

Estimates of the cost of Trump’s tax cuts range from $3 trillion to $5 trillion over five years and up to $7 trillion over a decade. Maya MacGuineas, president of the Committee for a Responsible Federal Budget made the first estimate, The New York Times the second.

While tax reform is a worthy goal, said Robert Bixby, executive director of the Concord Coalition, a nonpartisan group dedicated to fiscal responsibility, “it is inconceivable that a tax cut of this magnitude could pay for itself through economic growth.”

The White House predicts “trillions” of dollars in new revenue through growth. It’s worth remembering that Trump is unencumbered by fear of more debt.

“I’m the king of debt. I love debt,” he said during the campaign.

No doubt Republicans and Democrats alike would love to redo the huge, complicated tax code with its Swiss cheese loopholes, and many people would love to file their taxes on a “large postcard,” as Mnuchin put it.

But getting there won’t be easy.

Trump’s goal of eliminating deductions except for mortgage interest and charitable donations faces stiff opposition from Democratic members of Congress from high-tax states like New York, New Jersey and California.

Plus, it’s too early to know how Trump’s tax plan will affect most Americans.  

“We will be back to you with very firm details,” Cohn told reporters. He didn’t say when.

©2017 Marsha Mercer. All rights reserved.


Thursday, April 20, 2017

Trump, GOP will own shutdown, if it happens -- April 20, 2017 column


President Donald Trump took credit for a Democrat’s failure to win a special election outright in Georgia’s 6th Congressional District, forcing a run-off in June. 

“Glad to be of help!” he tweeted Tuesday night.

But if you want a true gauge of presidential clout, watch Congress as it wrestles with the prospect of yet another government shutdown. 

Americans have learned not to count on Congress to do much, but keeping the government open is a modest expectation. That goal, however, challenges Trump’s and congressional spending priorities.

Democrats have said no to Trump’s $1.4 billion request to build a border wall. They’re also fighting his proposed $18 billion in cuts to domestic programs to offset huge increases in defense spending.

Conservative Republicans still want to cut funding to Planned Parenthood, but saving it is a Democratic priority.

All this matters because Republicans likely will have to work with Democrats to avoid another government shutdown. Trump should help make a deal, but, as we know, he’s unpredictable.  

We’re here because Congress was unable to get its act together last December and passed a continuing resolution or temporary spending measure to avert a government shutdown. That spending authority expires Friday, the day before Trump’s 100th day in office, which he’d rather spend talking up his accomplishments than explaining why national parks are closed.

Congress went on a two-week spring break without dealing with the spending issue. The Senate returns to Washington Monday and the House on Tuesday, leaving a few days to negotiate. 

The last government shutdown, in October 2013, dragged on for 16 full days, and the one before that lasted 21 full days before it ended in January 1996. Each cost taxpayers billions of dollars and caused major disruptions in services.

“There’s not going to be a shutdown,” Senate Majority Whip John Cornyn, R-Texas, assured reporters the other day. These are the same people who promised to repeal and replace the Affordable Care Act on Day One.

Congress could punt again and pass another temporary extension for a week, pushing the crisis into May, Politico reported.

Meanwhile, Republicans and Democrats are preemptively blaming each other.      

“Our Republican colleagues know that since they control the House, the Senate, and the White House that a shutdown would fall on their shoulders, and they don’t want it,” said Senate Minority Leader Charles Schumer, D-New York.

Republicans need eight Democratic votes to overcome a Senate filibuster, so Democrats are trying to use their leverage to stop Trump’s agenda.

“I think Chuck Schumer and the Democrats want a shutdown,” Sen. Ted Cruz, R-Texas and architect of the last shutdown, told constituents in Texas the other day, the Texas Tribune reported.

This is rich coming from Cruz, who kept the Senate floor for 21 hours in 2013 in a vain attempt to kill the Affordable Care Act, a stunt that led to a budget standoff and then to the last shutdown.

Cruz’s antics demonstrated a truth about budget brinksmanship and government shutdowns: They don’t work. An omnibus spending bill passed, the ACA still stands, and Congress’ approval rating is a dismal 20 percent.

The cost of paying furloughed federal workers for not working during the 2013 shutdown was $2 billion, according to the Office of Management and Budget, which also cited such additional indirect costs as uncollected fees, halted IRS enforcement measures and additional interest on payments that were late, due to the shutdown.

No matter how they spin it, Republicans would suffer political fallout of a shutdown. The stars haven’t misaligned to bring on a funding gap under single-party rule since the troubled presidency of Jimmy Carter.

Even if Congress manages to keep the government open this time, another crisis looms in the fall, when the debt ceiling is reached.

The potential shutdown is a test. Trump could demonstrate he cares more about governing than electioneering and support a compromise. Congressional Republicans could show they have more aptitude for governing than squabbling.

It shouldn’t be a big ask to keep the government’s lights on.

©2017 Marsha Mercer. All rights reserved.

Tuesday, April 18, 2017

Food trucks get a break in some states -- STATELINE, online news service of Pew Charitable Trusts, April 18, 2017

To Keep on Trucking, States Streamline Food Truck Licensing

  • April 18, 2017
  • By Marsha Mercer
Food truck
Customers line up at food trucks near the Washington state capitol. Washington is among a handful of states to establish some uniform regulations governing the mobile vendors.
© The Associated Press
As food trucks started rolling onto American streets a decade or so ago, states set health standards for them but left specific rules for mobile food vendors to cities and counties.
Now, faced with a complicated and sometimes conflicting system of local regulations, permits and inspections, some states are stepping in to cut the red tape.
In Utah, a new law that allows food trucks to move among localities with a single license goes into effect next month.
“As far as I know, we’re the first state to take this step,” said state Sen. Deidre Henderson, a Republican, who led the push for the statewide law. “Unlike most issues, this was difficult in that there were no states to model after.”
In Maryland, the Legislature passed a less-sweeping bill that is being reviewed by Republican Gov. Larry Hogan. A new law in Washington state requires all mobile food trucks to have a state permit and inspection. The law removed a previous exemption for trucks used outside the state for six months or more. Other state measures are more targeted, such as allowing mobile food vending in commuter lots in one planning district in Virginia.
In all, 13 states have considered 37 bills involving some aspect of food truck regulation since 2015, according to the National Conference of State Legislatures (NCSL). Only a handful of the bills became law, but none were controversial, said Doug Farquhar, NCSL’s program director for environmental health.
Some 4,130 food trucks operate in nearly 300 American cities, with each truck averaging almost $291,000 in revenue, according to the U.S. Chamber of Commerce Foundation.
“As we get more and more food trucks, we get to the point where states need to regulate this industry,” Farquhar said. Every state extended existing state health department rules for restaurants to food trucks, he said. But food trucks raise new questions.
For example, while ice cream stands, hot dog carts and lunch wagons serving pre-made sandwiches and snacks at construction sites are nothing new, gourmet food trucks that cook raw food on-site presented new food safety challenges, such as access to hot water for hand-washing and sanitary food preparation.
“If you’re constantly out, where does the wastewater go and the trash? Those are novel problems you don’t have with a stand-alone restaurant,” Farquhar said.

A Booming Business

The U.S. food truck industry is one of the strongest food service areas, the market research firm IBISWorld reported in November. The industry grew nearly 8 percent a year from 2011 to 2016. But it is reaching its saturation point in many cities, the report said, with annual revenue growth expected to slow to 3 percent through 2021.
As the industry has grown, the lines between food trucks and stand-alone restaurants have blurred. Food truck operators often move to bricks-and-mortar locations while established restaurants add food trucks, according to the National Restaurant Association.
Still, restaurateurs worry about competition from mobile vendors parked close to bricks-and-mortar establishments, and some municipalities set parking time and location limits. Some, like a 30-minute parking rule in Sacramento, California, were later lifted.
In North Carolina, the Charlotte City Council last month revised its food truck ordinance, reducing permitting rules and allowing the trucks to stay open later and park closer to homes. But it added a rule that food trucks not be located within 50 feet of a restaurant without the owner’s approval.
Food truck owners complain that complying with myriad local rules is costly and time-consuming and hampers their ability to do business in multiple jurisdictions.
“We had very different regulations, often conflicting fire and safety regulations, and fees from county to county and city to city,” said Utah’s Henderson, who was approached by the Libertas Institute, a think tank in Utah that promotes free market policies, about the need for a statewide food truck law.
Utah has 29 counties and about 300 cities and towns. In West Jordan, a food truck license costs $1,400 and is good for only six months. The truck is prohibited from operating in the city the rest of the year. North Salt Lake requires license renewal four times a year — $800 in all.
Under the new Utah law, localities retain some control over when and where food trucks can operate, but they cannot ban food trucks entirely or charge high fees to generate revenue, Henderson said.  
She conceded the law may need tweaks. One concern is how localities will collect tax revenue from mobile vendors operating in different locations.
“I hope we hit the mark, and I think we did,” she said. “We may make changes, but we’re off to a good start.”

‘There Should Be One Law’

Dave Pulford spent 30 years in the mortgage business before he started selling sliders from his UpSlideDown Dave food truck in Maryland five years ago. He expanded his menu to include full-size sandwiches, bought a second truck and is building out a third.
“Trucks like mine go to five different jurisdictions — Montgomery, Howard and Ann Arundel counties, the District of Columbia and Baltimore City,” said Pulford, who is also the president of the Maryland Mobile Food Vending Association. “I’d like to go to eight.”
But every license renewal “takes me off the road for a day, and I have to make up $2,000 in lost revenues and the $1,000-plus in fees,” he said. Each jurisdiction charges a different fee.
“Get a license in each locality? I get that. But there should be one law everybody has to follow,” he said, adding that caterers or restaurants in Maryland can operate statewide with one license.
“Am I a mobile vendor, a restaurant on wheels, a caterer? I think I’m all of the above,” Pulford said.
Last year, he talked about his business challenges with Maryland state Del. Warren Miller, a Republican whose grandmother happened to operate a lunch wagon at construction sites in Howard County after she retired from a school cafeteria.
“She made simple lunch stuff,” Miller said. “Food trucks now are sophisticated.”
Miller sponsored the bill requiring county health departments to issue a reciprocity license to any mobile food truck that holds a valid license in its home county and is operating within 90 miles of its base. The bill also limits the fee for the reciprocity license to $300.
“This changes the way food trucks are regulated. It puts the responsibility on the home county,” Miller said. “This means there are a lot more days in the year that the operator is out selling food rather than getting permits.”
The Maryland bill focuses on licensing and does not limit localities’ regulation of food trucks on their streets as Utah’s law does. For example, Annapolis, the state capital, can continue to ban food trucks.
Miller’s bill failed last year, but after a rewrite, the new bill sailed through both houses, slowing only so that more legislators could sign on as co-sponsors.
Both Miller and Utah’s Henderson said they worked with restaurateurs, food truck owners, local officials and health and fire departments in writing successful bills.
But reciprocity laws mark a new approach. And in Maryland, some officials worried that food truck operators will choose as their home county one whose rules are less stringent, but the bill allows local inspections.  
Maryland bases its regulations on federal food safety law, meaning standards for food trucks are consistent in localities statewide, said Dr. Clifford Mitchell, director of the environmental health bureau of the Maryland Department of Health and Mental Hygiene.
The goal, he said, was to ensure all trucks in the state “operate in a safe fashion, follow the same procedures, and are equipped and appropriately managed.”

Thursday, April 13, 2017

Regrets, they have many -- April 13, 2017 column


This is the apology spring.

Not since President Bill Clinton went on his mea culpa tour in 1998 to atone for Monica Lewinsky have so many politicians, public figures and corporations done indefensible things for which they’re oh-so-sorry.

“I’m having to become quite an expert in this business of asking for forgiveness,” Clinton commented at the time.

In the last month or so, White House Press Secretary Sean Spicer, Alabama Gov. Robert Bentley, United CEO Oscar Munoz, Fox News host Bill O’Reilly, and Pepsi, among others, have had to make public apologies.

Circumstances varied greatly, but the wave of apologies shows the power of social media to record and broadcast misdeeds and arouse anger. More telling, the need for apologies shows that even in our seemingly anything-goes culture, words and actions still count.

Standards of decency and behavior still exist, and public figures and companies cross some lines at their peril.

Exhibit A is Spicer’s preposterous comment at a press briefing Tuesday that “even Hitler didn’t use chemical weapons” as Syrian President Bashar al-Assad did. Spicer also referred to Nazi death camps as “Holocaust centers.”

Amid calls for him to be fired, Spicer offered a full-throated apology the next morning, calling his remarks “inexcusable and reprehensible.”

“It is really painful to myself to know I did something like that. I made a mistake; there’s no other way to say it,” he told MSNBC’s Greta Van Susteren.

His quick and abject apology for an abysmal choice of words may allow Spicer to move on and save his job.

Personal misbehavior often leads to prolonged apologies by politicians trying to survive, a la Bill Clinton. But nothing focuses the mind like potential jail time.

Bentley’s latest apology and resignation as governor Monday came after he entered a plea deal in which he avoided jail in return for pleading guilty to two misdemeanors involving campaign funds. The deal came as impeachment proceedings were to begin and at the conclusion of a sex scandal involving a top aide.

After videos of a passenger being manhandled on an overbooked United plane went viral, CEO Munoz first backed up the airline and blamed the passenger. Then, he apologized in email and on TV, saying he felt “shame” and promising refunds to those who witnessed the “horrific” incident.

It’s possible Munoz felt shame before lawsuits loomed, before calls for a boycott spread, and before United got hammered in China because the mistreated passenger was Asian. But the tone of the response certainly changed when the PR crisis worsened.  

Apologies have to be done right or they can backfire. In the 2006 Virginia Senate campaign, Sen. George Allen attempted to make amends for using an ethnic slur to an Indian-American student who was videotaping Allen’s rallies for opponent Jim Webb. 

“I do apologize if he’s offended by that,” Allen said of the student. The apology was seen as tepid at best, if not insincere. The incident wasn’t the only flub in Allen’s campaign, and he narrowly lost the election.

Fox’s O’Reilly ran into a buzz saw last month when he made a crack that Democratic Rep. Maxine Waters’ hair looked like a “James Brown wig.” It was hardly the worst thing O’Reilly is accused of saying and doing, but going after a congresswoman’s looks is out of bounds. The comment reverberated on the Internet.

“That was stupid. I apologize,” O’Reilly said.

O’Reilly, whose sponsors deserted him in droves after several women accused him of sexual harassment, has gone on vacation.

And then there’s Pepsi’s ad starring celebrity Kendall Jenner defusing a stand-off at a generic protest by offering a police officer a can of Pepsi. The ad was widely seen as insensitive and trivializing the Black Lives Matter movement.

Pepsi first stood by the ad but pulled it hours later.

“Clearly we missed the mark, and we apologize,” said the company, which apologized to Jenner as well.  

Saturday Night Live mocked the ad as tone deaf. A non-controversial ad would never have received the attention, which goes to show confession is good for the soul, and an apology can be good for business.  

©2017 Marsha Mercer. All rights reserved.


Thursday, April 6, 2017

Ka-ching! National parks get only Trump change -- for now -- April 6, 2017 column


You’d have thought the National Park Service won the lottery.

The photos of Interior Secretary Ryan Zinke holding an oversized check with Tyrone Brandyburg, superintendent of Harpers Ferry National Historic Park, looked like shots of a lucky lottery winner with a gazillion-dollar bonanza.   

But this check to the National Park Service was chump change – or Trump change -- $78,333.32.

That’s how much salary taxpayers have paid Trump since noon Jan. 20. To compare: Taxpayers have shelled out an estimated $10 million on Trump’s visits to Mar-a-Lago.

Candidate Trump vowed he wouldn’t accept a salary as president, but the Constitution requires a president to be paid. The framers thought compensation would keep the president independent and free of corruption.

Until now, only Herbert Hoover and John F. Kennedy gave their presidential salaries to charity.

Trump initially planned to make a splash by giving away his entire $400,000 salary at year’s end. But the White House changed course and staged the photo op Monday in the press briefing room.

Trump gave the first installment of his salary to the park service, nearly everybody’s favorite federal agency. The money will go towards repairing infrastructure, Zinke said. 

But the sum will hardly make a dent in the $229 million backlog in deferred maintenance on the 25 national battlefields. Overall, the park service has a backlog of $12 billion in deferred maintenance on more than 400 parks and historic sites around the country.

Trump’s budget proposes a cut of $1.5 billion, or 12 percent, from the Interior Department’s budget. It doesn’t specify how much will be cut from the park service.

So, Trump came across not as a generous benefactor to the park service but as a latter-day John D. Rockefeller, handing it a few shiny dimes.

Visits to national parks have been growing over the past decade to a record high of 330 million visits last year during the service’s centennial celebration.

Most park facilities were built in the early and mid-20th century and need updating or replacing. These include rest areas and visitor centers, wastewater treatment and electricity plants, staff quarters and campgrounds.

Congress has long preferred to create new parks rather than take care of existing ones, but addressing deferred maintenance may be a rare area of bipartisan cooperation in the fractured Congress.

Last year, Congress authorized an additional $90 million for non-transportation maintenance and an additional $28 million for roads and bridges in the parks, with funds rising every year for five years.  

That’s not nearly enough to tackle the enormous backlog, park service officials and fans say.

Sens. Mark Warner, D-Va., and Rob Portman, R-Ohio, introduced on March 28 the National Park Service Legacy Act, which would direct $50 million annually in 2018, 2019 and 2020 for deferred maintenance at the parks.

The Legacy Act would authorize increasingly larger sums until $500 million would be available annually from 2027 through 2047. Costs would be paid through revenues from government oil and natural gas royalties.

“Virginia ranks fifth in the list of states with the greatest need for maintenance, with a backlog of $800 million,” said Warner. Democratic Sen. Tim Kaine of Virginia is a cosponsor.

Republican co-sponsors include Sens. Susan Collins of Maine and Lamar Alexander of Tennessee, who wants to help the Great Smoky Mountains National Park, which has a $232 million maintenance backlog.

“The Great Smoky Mountains National Park is one of America’s greatest treasures and it has a tremendous economic impact on East Tennessee,” Alexander said.

The park service does have its critics.

Sen. Rand Paul, R-Ky., chairman of the Homeland Security subcommittee on federal spending and oversight, has called out park service projects in Pennsylvania and Alaska as wasteful.

While congressional action is slow, there is something you can do: make a gift directly to the National Park Service, or, if you prefer, to your favorite national park. 

Shenandoah National Park has a $90 million maintenance backlog, for example, and Gulf Islands National Seashore has a $21 million maintenance backlog.

Your gift, like Trump’s, comes with a bonus. It’s tax deductible, if you’re among the 30 percent of taxpayers who itemize.

©2017 Marsha Mercer. All rights reserved.